The Balance Sheet Of Leadership
"The most important thing in communication is hearing what isn't said."
~Peter Drucker
Imagine running a business without a balanced budget. It would be like trying to navigate a ship without a compass - directionless and destined for trouble. Yet, when it comes to leading and developing people, we often take an unbalanced approach, focusing solely on either strengths or weaknesses. But what if we treated our leadership like a balance sheet, where both assets and liabilities are crucial for a true and healthy picture?
In financial terms, assets represent what's working well - the resources and strengths that contribute to success. In leadership, these are akin to grace - recognizing effort, celebrating achievements, acknowledging potential and effort. Liabilities, on the other hand, represent areas for improvement or challenges to address. In leadership, this parallels candor - honest feedback about shortcomings and areas for growth.
Just as a financial statement requires both assets and liabilities for accuracy, effective leadership demands a balance of grace and candor.
Grace and Candor as Assets and Liabilities
Grace-Only Leadership (All Assets, No Liabilities): A leader who focuses solely on positivity and encouragement might create a warm, friendly environment. But without addressing areas for improvement, this approach can lead to complacency and stagnation. It's like a company that only looks at its revenue without considering its debts - a recipe for trouble and sustainability.
Candor-Only Leadership (All Liabilities, No Assets): Conversely, a leader who only points out flaws and areas for improvement, without recognizing strengths and efforts, can create a demoralizing, fear-based culture. This is akin to a company obsessing over its debts without acknowledging its valuable assets - a path to demotivation and potential bankruptcy of spirit.
Balanced Leadership (Assets and Liabilities in Harmony): A leader who balances grace and candor creates a culture of growth, trust, and continuous improvement. They recognize strengths (assets) while also addressing areas for development (liabilities). This approach fosters psychological safety, where team members feel valued for their contributions yet are also challenged to grow. Perhaps even more importantly, this approach fosters inspiration and great engagement for people. Visionary leaders keep a compelling future of what can be out in front of their current reality (where we are both in liabilities and assets) that pulls their organization forward (read more about Creative Tension here).
So, how can we achieve this balance in our leadership?
Here are some practical steps:
Regular "Balance Sheet" Reviews: Schedule regular individual and team discussions where you discuss both strengths and areas for improvement. This ensures a balanced perspective. Don’t let the strengths, breakthroughs and wins get skipped or skimped. There is a human tendency to downplay these and want to just focus on the “real” stuff, by which we tend to mean the bad stuff that needs to be fixed.
Use the "Yes, And" Approach: When giving feedback, acknowledge the positive ("Yes, your report was thorough") and add the area for growth ("And, it could be more impactful with a clear executive summary").
Create a Culture of Reciprocal Feedback: Encourage team members to provide feedback to you and each other. This normalizes the give-and-take of both positive and constructive input.
Celebrate Growth, Not Just Achievement: Recognize not just end results, but also effort and progress. This balances the focus between current assets and the reduction of liabilities.
Practice Self-Reflection: Regularly assess your own leadership "balance sheet." Are you leaning too heavily on grace or candor?
Remember, just as a healthy financial statement shows both assets and liabilities, a healthy leadership approach embraces both grace and candor. It's not about sugarcoating or harsh criticism, but about painting a complete, honest, and supportive picture that promotes growth.
My Challenge To You
Take a moment to reflect on your leadership "balance sheet." Are you accounting for both assets and liabilities in your interactions with your team? Are you creating an environment where both strengths are celebrated and weaknesses are addressed constructively?
By striking this balance, you'll not only develop more resilient, growth-oriented team members, but you'll also create a culture where people are committed to self-improvement, open to giving and receiving coaching, and feel psychologically safe to take risks and innovate.
In the end, balanced leadership, like a balanced budget, is the key to long-term success and sustainability. It's time to make sure your leadership accounting is in order.
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