If you’ve followed the saga of the GameStop video game retailer and its stock prices, you know what happens when technology increases diversity, transparency, and the speed of information sharing in a market. You get democratization — the process of making something accessible to everyone.
Apply this concept to the job market, though, and we see flashing red warning signs.
The power has shifted to the people. People share information about current and past employers on such websites as Indeed and Glassdoor. They share their bad boss moments and culture horror stories on social media. They submit entries to worst boss of the year contests that tell tales of managers who throw tantrums, tape people’s mouths shut in meetings, and order employees to install spy software on computers.
“Oh, please,” you say. “I would never tape someone’s mouth shut during a meeting.” Me neither, although I’ve been tempted.
But if we could live outside our bodies and were forced to witness our every word and action, we might discover other ways we undermine trust, erode engagement, and guarantee our employees share their juicy stories on Facebook. Even if we have good intentions, we no longer control the story.
Fortunately, the problem is also the solution. The same democratic forces that can destabilize organizations also can boost our reputations and transform the tale of who we are in ways that motivate people to wait in line to apply for jobs and stick around for the long haul.
What’s the fuel for such stories? People-first leadership.
In my column in January, I proposed building people-first organizations in which we put the well-being, development, and engagement of people before profits because it’s not only the right thing to do but also good for business. People-first leadership shifts away from the old transactional mindsets and methods of the industrial age to the new transformational values and practices that have emerged in the information age.
Consider these differences between transactional and transformational leaders:
Underlying assumptions about people: Transactional leaders assume people are rational and self-interested. Transformational leaders assume people often sacrifice their own interests in pursuit of human connection and common goals. Transactional leaders believe people must earn the right to be trusted. Transformational leaders believe they must earn the trust of their people.
Methods used to motivate people: Transactional leaders rely on their ranks and status to compel people to act using external rewards and punishments. Transformational leaders tap into human needs by describing a clear vision of the future and earning heartfelt commitment through authenticity and trust.
Leadership practices: Transactional leaders practice one-way, top-down communication. Transformational leaders promote open, 360-degree communication. Transactional leaders define tasks and short-term objectives. Transformational leaders define desired outcomes and encourage others to determine the steps to get there. Transactional leaders make most decisions. Transformational leaders empower others to make decisions. Transactional leaders evaluate people. Transformational leaders develop their people. Transactional leaders tell. Transformational leaders ask. Transactional leaders focus on the work in front of them. Transformational leaders focus on changes and innovation that affect the future of the organization.
When considering these leadership differences, which best describes your style? If you lean toward transactional, take heart. Some situations clearly call for it — when a team member lacks basic competency or commitment, for example. In the long-term, though, people-first organizations rise to the top through transformational leadership.
If your knee-jerk reaction is to think transformational leadership is fine for unregulated, knowledge-centric, or touchy-feely businesses but not for a business like yours, consider Nucor, a steel company based in North Carolina.
Nucor puts its faith in its people by promoting creativity, cultivating employee expertise, and building trust. According to founder John Ferriola, “Nucor doesn’t have a chain of command, it has a chain of trust.” Nucor believes managers derive their authority from employees. In other words, Nucor operates a people-first organization with people-first leadership. And it works. Nucor has grown into one of the largest steel producers in the United States.
Consider joining Nucor and other forward-thinking organizations by embracing the reality that people hold the power. If a steel producer can find a way to do it, perhaps your organization can, too.