What Senior Leaders Won’t Tell Middle Leaders they are Doing Wrong

    

Having the opportunity to work with thousands Senior and Mid-level leaders from leading no-feedback-business-acumenorganizations around the world to refine their Business Acumen and Business Leadership skills provides me with insights and perspectives that are unparalleled.

I recently completed an engagement at a large Fortune 500 company that had me deliver a training and development session around a new business strategy and the leadership skills required to execute it successfully.

At the urging of the client, we decided to start in the middle and work up as opposed to a top-down training design.  What occurred was startling in terms of the disconnect between the middle-level leaders who thought they had been doing a great job and the senior-level leaders who thought the entire group of mid-level leaders were incapable of delivering on the new strategy and the value proposition to customers.

During this engagement – and my back on forth between the client, the executive sponsor, and some of the more vocal mid-level leaders – one significant theme stood out; the senior leaders had no confidence in the mid-level leaders’ Business Acumen skills required to get the job done.  Interestingly enough, the senior leaders trusted their “Business Leadership” skills such as giving feedback, coaching, having difficult conversations, etc. but of course as we all (hopefully) know, feedback out of context to the business strategy and the acumen required to execute is a complete waste of time and money and could potentially derail the entire company.

So, I formulated a hypothesis to take back to the senior leaders about this observation and they all agreed that something significant was missing.  We talked about the concept of “Business Acumen” and we were able to define it as:

  • Understanding the strategy from the big picture perspective
  • Understanding how the company makes money through revenues, expense management, and driving profit
  • Understanding how shareholder value is created
  • Understanding how customers make money
  • Understanding how the products sold to customers impacts the customers’

The next part of the conversation was the big question, why? Why would senior leaders not tell the mid-level leaders that their Business Acumen skills were weak and getting in the way of doing a great job and accomplishing the goals and objectives of the organization?

After deep probing and significant self-reflection, the answer finally came out; there was an unconscious bias that only senior-level people should have Business Acumen skills and that mid-level leaders were there only to execute.

When we explored this interesting issue we further discovered that organization power can sometimes be contained and controlled by information – especially complex financial information – that provides the insights into understanding and analyzing the business.  The realization that the senior leaders of this organization were hurting their own performance by not creating an environment where mid-level leaders can have access to the Business Acumen skills to do their jobs more effectively was a true “wake-up” call.

In other words, the senior leaders wouldn’t and could have open and transparent conversations about performance because they didn’t have a “language” to deliver the feedback in.  For example, this conversation was not happening:

Senior Leader: “Listen, we need to talk about margins of the product called ‘Bright.’  I don’t know if you realize it but over the past two quarters, the price has dropped by 2.3%, the COGS have increased by 3.4%, and our administrative overhead due to increased inventory levels has gone up 14%. This squeezing of the margins has resulting in a negative impact on share price because our Free Cash Flow is also down significantly.”

If you don’t think this conversation is happening in your company, you should be very worried.  If it is, you should also be worried because your organization needs the skills and tools to fix it.

Effective leadership is equal to the execution of your people; if they don’t have the skills and tools to execute and understand the business from the Business Acumen perspective, your company will be limited in success.

Why Business Acumen Matters

Robert Brodo

About The Author

Robert Brodo is co-founder of Advantexe. He has more than 20 years of training and business simulation experience.