Seven deadly sins of leadership: Greed

In the final part of his seven-part series, Nick Humphrey looks at the seventh deadly leadership sin, Greed.



What is greed?

An intense and selfish desire for something, especially wealth or power.

Many leaders make the mistake of thinking that making profit is their purpose. Profit is an outcome, not a purpose. When CEOs talk about a mission of increasing profits, they inevitably fail to motivate their employees. Making more money for the boss is simply not a powerful motivator for employees. Your team are thinking “WIFM” – what’s in it for me? It is key to find a purpose that resonates with your employees and articulates the mission from their perspective.


There is a joke about a partner from a law firm who has his team for dinner at his mansion. He gives them a tour of his house with its palatial grounds, swimming pool, tennis court, and acres of gardens. He shows them his collection of exotic cars and art work. He pats one of them on shoulder, “If you keep working 7 days a week, 20 hours a day for another ten years, then … I can buy another Bentley.”


Why is a purpose other than money important?

When you ask someone why they want to hold a leadership position, you will invariably get a broad spectrum of answers. Some will point to extrinsic or external motives such as better pay and conditions or enhanced career progression. Others may point to intrinsic or internal factors such as a sense of obligation to serve their firm or organisation. While perhaps others feel an engrained identity as a leader. Some may also point to a combination of both internal and external factors.


There are several surveys that explore the impact of motivation on performance:


Teresa Amabile and Steven Kramer: Researchers conducted a survey of 669 managers from dozens of companies and a range of industries to try and better understand what motivates employees.[1] The managers were asked to rank five workplace factors and the perceived impact on employee motivation and emotions:

  • Recognition

  • Incentives

  • Interpersonal support

  • Support for making progress

  • Clear goals.

The view of nearly all managers was that their staff, were primarily motivated by making financial incentives (salary rises and/or bonuses). However, as part of the study, they reviewed over 12,000 employee diary entries and found that the single greatest motivator was actually the emotional feeling of making daily progress toward a meaningful goal (not financial incentives).


West Point Leadership Survey: A recent study assessed the impact of motivations on the performance of leaders (intrinsic, extrinsic and a combination of both). A common assumption is that those leaders with a combination of both internal and external motivations had the most reasons to lead so would be the most committed, high performing leaders.[2] The study tested this assumption, with some unexpected results.


The researchers examined career progression of over ten thousand graduates from the US Army Officer training academy, West Point. They reviewed the officer’s motive to attend the academy and become a leader and their performance as leaders in the years following graduation, including an appraisal of their potential as leaders.


In the US Army, annual performance appraisals include identification of early promotion potential for that officer to lead at higher levels. The study found that those with internal rationales performed better than those with purely external motives for their service.

One of the researchers, Tom Kolditz reported:


“We were surprised to find, however, that those with both internal and external rationales proved to be worse investments as leaders than those with fewer, but predominantly internal, motivations. Adding external motives didn’t make leaders perform better - additional motivations reduced the selection to top leadership by more than 20%. Thus, external motivations, even atop strong internal motivations, were leadership poison.”[3]


As a leader, this study implies that how well you lead will be significantly driven by why you lead. If you want to be a better leader, don’t be distracted by the extrinsic motivations of better pay, title or promotion, instead focus on the intrinsic drivers (such as service to others). Ironically, those leaders who perform better will by implication be more likely to be rewarded with pay rises and promotions.


Strategies for finding purpose

Understanding your why: Every organisation knows “what” they do (the products or services offered). Most know “how” they do it, the process behind the creation of the product or service, some also know how they are differentiated, their “unique selling proposition” (USP) or their value proposition. How their products or service are better or different. Simon Sinek, author and management theorist, argues that very few organisations know “why” they do what they do.[4]


The “why” is the purpose of the business. What is its raison d'être? The French saying, which translates into “reason for existence”. The “why” of your business should be the greater mission that justifies the very existence of your firm and the reason why its stakeholders leap out of bed in the morning energised to face the day.[5]


David Packard in a speech to HP employees in 1960 said: “I think many people assume, wrongly, that a company exists to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reason for our being.”[6]

Sinek explains the purpose of Apple Inc:


“If Apple were like everyone else, a marketing message from them might sound like this: ‘We make great computers. They're beautifully designed, simple to use and user friendly. Want to buy one?’ ...


Here's how Apple actually communicates. ‘Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user friendly. We just happen to make great computers. Want to buy one?’


Totally different right? You're ready to buy a computer from me. All I did was reverse the order of the information. What it proves to us is that people don't buy what you do; people buy why you do it.”[7]


Jim Collins and Jerry Porras in their book, “Built to Last”, tell the story of the foundation of Sony in post-war Japan. Masaru Ibuka rented a room in the burned out remnants of an old department store in Tokyo. He started the business with only $1,600 of personal savings and seven employees.[8] Less than a year after he started, he published Sony’s “purpose of incorporation”:


“To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content. To pursue dynamic activities in technology and production for the reconstruction of Japan and the elevation of the nation’s culture. To apply advanced technology to the life of the general public.”


Purpose-based leadership: To be effective, purpose-based leadership requires:

  • Alignment: It needs to have alignment between your own individual purpose as a leader and that of the firm. The purpose also needs to be aligned with the values, beliefs and strategy of the firm.

  • Aspirational: The purpose will need to inspire your stakeholders and drive performance. It needs to provide an energising mission.

  • Authenticity: It needs to be genuine. Your clients and other stakeholders including employees and partners will react poorly if they believe the stated purpose is “marketing fluff”.

About the author

Nick Humphrey is the managing partner of Hamilton Locke. He is the Chairman of the Australian Growth Company Awards and author of a number of best-selling books on business and leadership. His latest book is Maverick Executive: strategies for Driving Clarity, Effectiveness and Focus, published by Wolters Kluwer.


Sources

1. Amabile, T. M. & Kramer, S. J. (2010) “What really motivates workers (#1 in breakthrough ideas for 2010),” Harvard Business Review, 88:1, 44-45

2. Tom Kolditz, “Why You Lead Determines How Well You Lead,” Harvard Business Review, 22 July 2014, pg 1 https://hbr.org/2014/07/why-you-lead-determines-how-well-you-lead/

3. Kolditz, pg 1

4. Simon Sinek, “How great leaders inspire action,” TED talk, http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action/transcript?language=en

5. Sinek, TED

6. Jim Collins, Jerry Porras, “Built to Last”, Random House, Chapter 3, Page 50

7. Simon Sinek, “Start with why: how great leaders inspire everyone to take action,” Portfolio Penguin, 2009, pg 41

8. Collins, Porras, ibid

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