Dear Mr. CEO

COPL: Cost of Poor Leadership
As we know, leadership is nothing but leading from the front so as to achieve the objectives, not pushing from the back as some so-called corporate leaders do. In this article, let’s discuss about the cost of poor leadership. The consequences of poor leadership always carried forward too many years. Therefore, the organizations need to be more careful in choosing a leader. Dear readers, before analysing the COPL let’s brief about what is poor leadership. You might have seen many articles on Good leadership, excellent leadership so on and so forth.

What is a poor leadership?

Poor leadership is defined as the kind of leadership style/intent/actions that are deviating the organization from the direction and path towards achieving the business.

• Goals
• Mission
• Vision

Poor leadership as everyone knows, is detrimental to the organization. If you nd the following symptoms, then you can conclude that the organization is suffering from the poor leadership Organization is not able to achieve the target for more than three years continuously More hierarchies No accountability among the leadership team No conviction about the business goals Communication break down No integrity Recent survey in UK says that more than one third of UK employees are leaving the organization due to poor leadership £ Though everyone talks about this there is no formula for calculating the cost of poor leadership.

I have come across a story about writing off a big acquisition done earlier by the leadership of an organization. The amount of the acquisition was billions of dollars. It was a wrong decision by the management and they closed it silently. Like this there are many decisions made by the leadership that played havoc to the entire organization. Many of us know, CTC-Cost to Company, COPQ-Cost of Poor Quality, where as we may not know the COPL-Cost of Poor Leadership. Through this article I am trying to nd a way to calculate the COPL.

I am not claiming that this is the only way of calculating the COPL, yet, this could be evolved to be a matured way of calculating the COPL in the future This COPL is a complex one and not so easy to calculate as there are multiple factors involved and it is a long-term exercise, minimum three years required to judge about a leader. As we know, sometimes the policy enacted by the leader will fructify only after some years. Therefore, we need to be more cautious about this. However, if we do it then this can quantify the cost of the poor leadership and any decision taken based on this will be a fact based not opinion based.

Before moving to the calculation of COPL, let’s look into three types of Leaders.

• The King
• The Manager
• The clerk

I. The King:

This is a leadership category where the person will control every aspect of the organization. The gain/loss may be very high. He/she has full authority of all the facts and grues of the organization in his/her tips. They know the details of every employee of their needs and capabilities. This type of leadership will be successful if most of the people in the organization support them. There should be more authorities given to this leader by the Board of Directors.

The advantages of this leadership are

• Quick Decision making
• Trust able
• Leading from the front

The disadvantage is that this person may be perceived as authoritarian by others

II. The Manager:

This type of leaders is not leading from the front, rather they push from the back. They simply manage the status-quo. Highly conservative and not taking any risks. Tries to be amiable to all. These manager-leaders will succeed in a monopoly organization where the business orders are coming consistently without much effort by the leadership. In the current world these types of manager-leaders cannot survive as there are stiff competition prevails in the market. An organization that is aiming at growing faster should not have manager-leaders as they will spoil the organization culture.

III. The Clerk

This is the worst type of leadership style. These clerk-leaders will only execute the orders. He will not make any big decisions nor will he take risks. The victims are the high performers who will suffer under this leadership as they may not get any rewards for their hard work, whereas the low performers and the coterie will have hey days under this leadership as they can simply survive without doing any work. For an example, if you look at some govt organizations, this type of leadership will be a norm. The govt will appoint an o cer as MD of the public sector organization. This guy will somehow pass the time smoothly without any controversial decisions so that he can retire peacefully to get his retirement bene ts. Imagine, the destiny of any organization that has clerk-leader as their CEO. COPL applies to all the above leadership styles. Therefore, COPL will consider the parameters such as attrition also. Decision making is also a parameter in this COPL as a wrong decision is costly so as not making timely decision also costly.

Now let’s look at the factors that impact the COPL below:

• Cost incurred due to wrong policy/concepts
• Cost incurred due to not implementing the right policy/process
• Cost incurred due to not implementing the Automation
• Cost incurred due to attrition because of the policy/process/style of leadership
• Cost incurred due to communication failure
• Cost incurred due to delay in making a decision

These costs can be collected in terms of money/effort. All these above parameters can be called as L Collect the data of total costs in the respective unit/SBU/vertical/enterprise depends upon the COPL for the position that is held by the individual.

The criteria are COPL is < 10%= Good 10% to 20%= Alarming >20%= Dangerous
If the leadership is collective, then collect all the individual data together and arrive at COPL It is better to find the COPL every three to five years as the leadership needs that much time to see the impact of their policies on revenue I am concluding this article by saying that this is at conceptual level and is not tested with organizations. Therefore, please be cautious while applying this. This will evolve by time. I tried my best to bring the leadership activities under the financial scanner. How far this will be useful, only the time will tell Thank you for reading, please give your feedback /comments in the respective section here.

Author:

The author of this article has vast experience in HR Process implementation and HR data analytics and was instrumental in implementing the PCMM in Top Tier organizations across globe.

Pazhanikumar R
Director,
IZAAKI Consulting
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