Do leaders work or do they sit back and supervise others? Where you stand on that issue depends upon where you sit in the leader versus led relationship. From the bottom up, leading doesn’t appear to involve much work. The “real” work happens at the bottom of the organization chart – on the front lines. The higher you go in the hierarchy, you’ll see less “real” work and more talk about real work.
If you’ve led people, however, you have a different perspective. Once you’ve been in a leadership role, you realize leadership doesn’t magically happen. A leader’s work can be thought of as a range of “leadership services” provided to team members. Providing these services takes time and energy. The same way organizations don’t have unlimited financial capital to invest, leaders don’t have unlimited time and energy to invest in leading their teams. That dynamic requires leaders to be deliberate in their approach to allocating this limited “leadership capital.”
Methods for allocating leadership capital
Because leadership capital is finite, leaders must invest it intelligently. Unfortunately, however, leaders spend their scarce financial capital much more carefully than they do their precious leadership capital. Because the financial capital budgeting process is competitive, a great deal of thought is put into decisions about how to allocate funds.
Compared to the budgeting process, the way that leaders decide how to invest their time and energy in their teams can seem arbitrary. Some leaders spread it evenly across their team members to achieve equality. By using this approach, leaders can avoid being seen as “playing favorites.” But spreading your leadership capital this way isn’t strategic.
Some leaders allocate their leadership capital by giving more to the loudest requestors. This method is all about achieving peace – the “reactive” approach. Instead of proactively determining where to invest their time and energy, they distribute it on a first come, first served basis.
Leaders may allocate their leadership capital where it’s easiest to do so – the “path of least resistance” approach. In this case, leaders find it easier to work with certain team members than others. This approach minimizes their stress by limiting their interactions with more difficult team members. That approach is risky. Not only will other team members feel their leader is playing favorites, but the leader isn’t getting the return they should for their leadership capital investment. The person who is fun to work with might be the lowest performer on the team.
These three approaches have benefits, but they’re not likely to be the best way to get the most efficient and effective output from the entire team.
How are you investing your leadership capital in your team members?
The notion of investing in areas generating the highest return applies the same way it does in financial investing. If your organization is deciding between investing in one project that will generate a 5% return and another generates a 15% return, which do you think they’ll invest in? To make this simple, assume the risk and the amount invested are the same. The answer is clear. Your leadership capital works the same way. Determine how much you’re investing, where you’re investing it, and what return you’re receiving. Armed with that knowledge, you can then shift your leadership capital investments into higher return activities.
Assessing how you’re investing your leadership capital
We recommend using a tool called the Leadership Matrix to see if you’re making wise leadership capital investments. Placing your team members on the Leadership Matrix requires you to compare where you’re investing your leadership capital and the return you receive from those investments in the form of team member results. Their placement on the Leadership Matrix defines a performance pattern that will likely be familiar and requires specific leadership techniques to get the best performance out of that individual.
The way to conduct this evaluation is through a simple assessment. The first axis you’ll assess will be the “input” axis – leadership capital invested. Your investment comes in the form of twelve “leadership services” you provide to your team members. Those services are ways you’re investing time, energy, and effort in your team members. They are:
- Directing — Planning, Prioritizing, and Coordinating
- Doing — Deciding, Motivating, and Clearing
- Delivering — Monitoring, Correcting, and Repairing
- Developing — Training, Coaching, and Promoting
Ask yourself if you’re investing a lot or a little in your team member. That dictates their position on the horizontal axis of the Leadership Matrix. The vertical axis is defined by the results they deliver from high to low. The full online version of the assessment is available here.
Once you’ve assessed your people, you’ll have a much better sense of the performance patterns you’re dealing with — from Slackers to Rising Stars — and a clearer picture of how you can more effectively invest your limited leadership capital.
Mike Figliuolo is the co-author of “Lead Inside the Box: How Smart Leaders Guide Their Teams to Exceptional Results” and the author of “One Piece of Paper: The Simple Approach to Powerful, Personal Leadership.” He’s the managing director of thoughtLEADERS, LLC – a leadership development training firm. He regularly writes about leadership on the thoughtLEADERS Blog and writes SmartBrief’s weekly leadership poll question and analysis.
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