• Leadership Development

Transforming Leadership Development: Why Potentializing People Is the New Employee Engagement

Ellen Bailey

September 20, 2024

In July, the International Monetary Fund released a report showing that global growth is facing some serious headwinds.¹ The impact of demographic trends on the workforce and supply chain health continues to weigh on economies around the world. People feel replaceable and perceive greater instability in the workplace,² putting productivity at risk. And despite the promise of AI, technology isn’t expected to fully solve these challenges in the near term.

The Productivity Problem

What does this mean for leaders? There is intense pressure to increase productivity to boost profits and enable growth. Leaders need to create an environment where their people and teams are showing up to work ready to bring their best selves, give their all, and achieve results. That’s exactly what decades of employee engagement efforts were supposed to deliver, but reports suggest they have fallen short.³

As employees calculate their willingness to commit discretionary effort to work, the math has changed for many. And incentives to increase discretionary effort don’t always move the needle on engagement. It’s time to move beyond employee engagement to potentializing people, which involves a genuine commitment on the part of employers to proactively help individuals enhance their skills and reach their full potential. This demand on leaders was identified as one of four key objectives for leadership development in our recent study.

Unleashing Employee Potential to Achieve Discretionary Effort

Employee engagement typically measures employees’ willingness to stay with their employer, recommend it to others as a place to work, and give their best efforts. While these outcomes are clearly beneficial to the employer, they don’t measure value for the employee. Gaining that elusive “discretionary effort” of people and teams is a complex leadership challenge. It requires a leader to create an environment where it happens naturally because people want to give their best—not because they are pressured to do so.

An alternative way to strengthen employees’ commitment to their organization is to encourage leaders to understand how work can contribute to each employee’s needs for emotional, physical, social, financial, spiritual, environmental, intellectual, and occupational dimensions of wellness, something we have explored in our research “Fulfillment at Work Requires Real Human-Centered Leadership”. By striving to make work a positive contributor to people’s overall well-being and fulfillment, leaders can deepen trust and change the way people feel about their jobs.

In an article in Harvard Business Review, Hubert Joly writes about the turnaround he led as CEO of Best Buy, where several factors had to come together to create what he calls “human magic”—the unleashing of creativity and productivity across the workforce. “What we had done was create an environment where employees were excited to express their untapped individual and collective potential. It’s in that environment that Best Buy’s purpose of improving lives through technology has been able to materialize and blossom.”⁴

Six Elements of Creating “Human Magic”

Joly says there were six elements of the Best Buy culture that his leaders needed to establish for human magic to become a reality there, and links between these elements and the dimensions of wellness mentioned above are easy to see.

1. Meaning

While having a clear organizational purpose or mission is important, it is critical that leaders help their people make a personal connection to it—seeing a clear link between the company’s purpose and their individual aspirations.

2. Authentic Human Connections

People who feel seen and have a sense of belonging connect with their work and their teams in a deeper way. Employees want to work for organizations that see and care about them as individuals. With the increase in remote and hybrid teams, leaders need to be intentional in fostering connections across their teams, starting with themselves.

3. Autonomy

A clear purpose gives a north star for performance, but people need to have some freedom to choose what they do and how they do it to realize that purpose. At Best Buy, this meant pushing the authority for decision making as close to the work and the customer as possible.

4. Psychological Safety

Leaders need to drive out fear to unleash top performance. “No one will risk being themselves and being vulnerable unless they trust that they won’t be penalized or ridiculed for showing their true selves, speaking up, or making mistakes.”⁵

5. Learning Environment

To be their best selves, people need the opportunity to learn. Progress on a career path provides a sense of agency that can help offset the feelings of instability that pervade many workplaces—and our world. Leader activities that create an environment that fosters personal mastery can range from the personal and informal, such as ongoing coaching, to rewiring systems and structures like rewards and performance management processes that may be hindering real learning.

6. Growth

Organizational growth creates opportunity and energy. At Best Buy, they had to break out of a fixed mindset in their industry and expand their thinking about their markets to create more business growth opportunities.

Beyond Perks: Cultivating True Discretionary Effort in the Workplace

Near-term productivity gains depend on employees’ willingness to contribute discretionary effort. Some organizations attempt to increase discretionary effort by offering additional compensation, perks and other workplace amenities, and while this approach may result in keeping people longer, it is unlikely to potentialize employees and unleash their best performance. True quality discretionary effort is only achieved when there is a genuine connection and alignment with the organization’s values and culture—what can be described as the “human magic.”

Unleashing the full potential of people is a deep and multifaceted leadership challenge that must go beyond traditional employee engagement efforts. It is both the hardest work and, in many ways, the most rewarding work a leader can do. The same can be said for the task in front of us as learning professionals to equip our leaders with the tools, skills, and mindset to meet the challenge. To learn more about how, download a copy of our report, “Time to Transform Leadership Development.”

Explore Further

This is the fourth post in our series on transforming leadership development. If you haven’t yet read the previous posts, you can find them below:

• Why Widening Skill Sets is Crucial for Today’s Leaders
• Why Leaders Must Challenge Their Patterns and Paradigms
• How to Manage Polarities and Paradoxes
• Building Leadership Capacity to Manage Polarities and Paradoxes
• Building Leadership Capacity to Change Paradigms and Patterns

1. International Monetary Fund World Economic Outlook Update, July 2024. ︎
2. Medaris, Anna, “What do people really want in their work? Meaning and stability,” American Psychological Association, March 4, 2024. ︎
3. Gallup, “Twenty Percent of The World’s Employees Experience Loneliness While Global Employee Engagement Stagnated and Employee Wellbeing Declined,” June 12, 2024. ︎
4. Joly, Hubert, “The Secret Ingredient of Thriving Companies? Human Magic,” HBR.org, January 10, 2022. ︎
5. Ibid. ︎

The post Transforming Leadership Development: Why Potentializing People Is the New Employee Engagement appeared first on Harvard Business Impact.

The Modern Leader’s Greatest Balancing Act

Ellen Bailey

September 1, 2023

In today’s technology-driven world, the expectations placed on leaders have evolved, creating a need for more tech-savvy leaders at all levels. But even as the latest trends and innovations captivate our attention, a fundamental truth remains unchanged: leaders still lead people.

And although the pandemic brought authentic, empathetic, and inclusive leadership to the forefront, leaders haven’t nailed this balance yet. According to our research, the reason may rest with leaders who are still uncomfortable with the new expectations their teams have of them when it comes to demonstrating genuine interest and concern for their personal lives and wellness.

Leaders now balance the personal with the professional

“Not long ago, leaders were trained not talk to employees about personal issues. There were boundaries between personal life and professional life.
Employees now expect their manager to care about them personally…They will share that they are emotionally struggling, which rarely happened before.
One of the changes is being able to more holistically engage an employee appropriately… but many leaders still don’t know how to do it.”

— Chief people officer at a global technology company

Employees also expect real inclusion, not only when it comes to gender and racial diversity, but also as it applies to their ideas and perspectives. ​What’s more, many seek to live their purpose through the work they do.

Herein lies the balancing act modern leaders must navigate: An increased pressure to handle conflicts, exchange feedback, provide meaning, demonstrate empathy and inclusion, and have tough conversations without making people feel devalued or excluded—all while moving their businesses forward in innovative ways as technology makes inroads into every element of organizational life.

How can people leaders and those in charge of developing them gracefully walk this tight rope? We outline two primary areas of consideration and the related human-centric leadership capabilities to hone within each.

Tried-and-true skills refined for today’s workplace

The good news for leadership development practitioners is that interpersonal competencies are still relevant for modern leaders to thrive in today’s environment—but how they play out on a day-to-day basis may require fine-tuning.

Managing conflict among team members

According to a recent Gallop poll, over half of the respondents surveyed felt “a lot of” stress on the day before the poll.¹ And that stress can lead to tensions, which, if unaddressed, can turn into conflict. By one estimate, managers spend an average of four hours a week dealing with conflict,² so this is an essential skill to develop. In today’s increasingly diverse and dispersed workforces, managing conflict with an open mind and acceptance for everyone’s unique experience is critical.

Exchanging feedback

Although it can feel very uncomfortable for a leader to offer constructive feedback to an employee, it’s critical to helping employees grow.³ And without consistent feedback, they tend to create their own interpretations of events which can lead to misunderstandings and sometimes a decline in performance (“no news is good news, so I must be doing ok”).⁴ According to our research, developing leaders’ capabilities in communicating feedback remains a top priority for organizations in the coming year. To do this effectively in today’s environment—where difficult conversations may be happening virtually—modern leaders must create a safe environment for healthy, two-way dialogue. This also means that leaders proactively seek feedback from their team members and show genuine respect and appreciation for the input.

The enhanced role of empathy, compassion, and inclusion

Two factors have accelerated the need for deeper human leadership practices.

• First, as it has become more acceptable for employees to bring their whole selves to work and talk about their personal lives in the workplace has become more common.
• Secondly, with the rise of virtual team meetings, both leaders and their teams have had glimpses into people’s “private” realms—inside their homes, with kids and pets often making appearances.

This integration of work and personal lives has given rise to an increased need for modern leaders to exhibit the skills of empathy, compassion, and inclusion so that they can create an environment that allows employees to feel safe and to do their best work.

1. Empathy’s role in leadership

Our research with organizations across the globe supports the business impact of empathetic leadership. Top-performing companies (as measured by exceeding expectations in growth, customer, and employee expectations) were far more likely to say empathy is emphasized in their organizational culture.⁵

Further, we found that executives recognize the value of empathy, but it’s not uniformly applied in their organizations. While 78% of senior leaders feel strongly that demonstrating empathy is highly important in their own role, only 47% say their organization’s culture emphasizes it, and just 54% of individual contributors say their immediate manager consistently exhibits empathy.⁶ It appears that there is ample opportunity to develop this most human of skills—the ability to understand and share the feelings of others.

2. Compassion accelerates human connection

As important as empathy is for creating genuine bonds with colleagues, compassion, the ability to not only recognize and experience challenges or negative emotions of others but to act when needed, is an equally important capability that leaders are more frequently called on to exhibit. As Harvard Business School professor Arthur C. Brooks writes in an Atlantic article, empathy plus compassion equals a powerful duo. He cites research being trained in exercising compassion benefits not only the person who is suffering but also the person offering support.⁷

At a time when manager burnout is at an all-time high,⁸ understanding when to take action while also becoming more mindful of one’s own feelings and potential limitations to help may ease some managers’ emotional tension and exhaustion at work.

The benefits of compassion multiply

3.  Inclusion and belonging

Given that a typical employee may spend a third of their waking time at work, it makes intuitive sense that feeling they “belong” at their organization is extremely important. Modern leaders who create a culture where employees feel they can safely bring their authentic selves to work are laying the foundation for an inclusive workplace. According to research think tank Coqual, employees feel a sense of belonging when they are: (1) seen for their unique contributions (2) connected to their coworkers (3) supported in their daily work and career development and (4) proud of their organization’s value and purpose.⁹

Employees today expect their organizations and leaders to embrace their human selves more fully. It’s a tall order for leaders and those in charge of developing them. To set the organization up for success, senior L&D leaders must consider the capabilities needed for their leaders to strike the right balance, as well as the nuances of honing and practicing these skills in today’s dynamic work environment.

Learn more

For additional insights on how organizations are responding to this imperative, download the 2023 Global Leadership Development Study: Ready for Anything report.

Research Report

2023 Global Leadership Development Study: Ready for Anything

Download

1. Harter, Jim, “Globally, Employees Are More Engaged — and More Stressed,” Gallup. June 13, 2023. https://www.gallup.com/workplace/506798/globally-employees-engaged-stressed.aspx ︎
2. The Meyers-Briggs Company, “Conflict at Work: A Research Report,” August 2022. https://www.themyersbriggs.com/en-US/Programs/Conflict-at-Work-Research ︎
3. Santos, Stephanie, “How to Help Any Employee Grow,” Harvard Business Publishing blog, July 27, 2022. https://www.harvardbusiness.org/how-to-help-any-employee-grow/ ︎
4. Riegel, Deborah Grayson, “Assumptions Employees Make When They Don’t Get Feedback,” Harvard Business Review, June 24, 2019. https://hbr.org/2019/06/the-assumptions-employees-make-when-they-dont-get-feedback ︎
5. Harvard Business Publishing Corporate Learning, “Leadership Reframed for the Workplace of the Future: 10 Capabilities and 7 Superpowers,” 2022. ︎
6. Leadership Capabilities and Superpowers Global Study, Harvard Business Publishing Corporate Learning, 2022. ︎
7. Brooks, Arthur C., “What’s Missing From Empathy,” The Atlantic, September 8, 2022. https://www.theatlantic.com/family/archive/2022/09/developing-empathy-into-compassion/671368/ ︎
8. Klinghoffer, Dawn and Kirkpatrick-Husk, Katie. “More Than 50% of Managers Feel Burned Out,” Harvard Business Review, May 18, 2023. https://hbr.org/2023/05/more-than-50-of-managers-feel-burned-out. ︎
9. Julia Taylor Kennedy and Pooja Jain-Link, “What Does it Take to Build a Culture of Belonging?” Harvard Business Review, June 21, 2021. https://hbr.org/2021/06/what-does-it-take-to-build-a-culture-of-belonging. ︎

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