What's the true cost of poor project leadership?

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If you were wondering just how much damage could be done by poor project leadership, then it may come as little surprise to discover that it is estimated that it can cause many companies to have a productivity “drag” that is anywhere from 5-10%.

If a leader is lacking in the ability to offer direction and motivation to their staff, then there is a good chance that the moral and organisational culture of a company will suffer. Poor leadership can also be linked to reduced productivity. Plus, high levels of employee turnover.

Whilst some of these costs might be something that a company could overlook in the short term, perhaps whilst a project manager is completing their project management accreditation, in the long term accepting them is simply not a viable option. If someone simply doesn’t have the right project management skills to undertake a project management role, then no amount of additional training is likely to help them. They would likely struggle to overcome this, and the losses to a company will be too great.

How is workplace culture impacted by poor leadership?

Unfortunately, poor leadership can have a negative impact in a number of different ways. It can negatively affect the culture that you would find within a company. This can occur in a number of ways:

Lack of vision

Where there is no direction, employees are all too often at a loss. It can be difficult to know what the goals are and even why they are working in a particular way. When this happens, employees are far more likely to simply work in a mechanical fashion rather than using their own initiative when the occasion arises. This can lead to issues along the way.

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Lack of synergy

When there is poor leadership at a departmental level, it can reduce the development of synergy. This means that departments can become fractured with employees neglecting the importance that their work might play in the wider objectives of the organisation.

 A trait of a good leader is that they are someone who will communicate with their employees on a regular basis. They’ll do so in order to offer them information and to develop synergy. It is important to ensure that employees are able to share their ideas and get involved in open discussions that will be of benefit to the company. Plus, they’ll ensuree that everyone is trying to pursue the same end goals.

Creating a culture where mediocrity is the norm

When there is poor leadership at the top, this can reduce the rate at which managers in the business as a whole can make improvements. When there is poor leadership at the top, middle managers will follow this example. This can flow down the chain of command until it is the norm within an organisation. The end result is that this can eventually lead to low morale amongst employees.

Low morale

When employees are uncertain about remaining within a company and unhappy with their roles, this can often be a result of poor leadership. Poor communication can also contribute to this. It is often the case that where there is a failure to address any poor performance or negative attitudes, any low morale that already exists can be increased. Those employees who are disciplined enough to set their own pace and complete their work will end up picking up the slack.

Any tensions that exist between the management and employees will play a part in affecting performance, productivity and even wellbeing. When employees feel criticised or let down, they will feel demoralised and disillusioned.

To put it simply, poor leadership can lead to higher costs and lower profits associated with the inability to retain a workforce.

Higher turnover of staff

It shouldn’t be any surprise that poor leadership can lead to higher levels of employee turnover. When employees are not motivated, a poor culture can cause burn-out, and they start to look for employment elsewhere. When a company loses their top performers, they may need to replace them with less experienced staff.  Plus, the recruitment process and subsequent training of these employees with less experience can increase costs. There may also be high costs associated with employing temporary agency contractors to fill the void whilst recruitment is ongoing.

Failure to meet goals

The truth is that where there is poor leadership, employees are less inspired to go all out, and this can result in them not meeting their goals. Of course, the results that are delivered resulting from this are not the best. If you want the best results from employees, then you need to ensure that everyone, at every level, is committed when it comes to achieving their best, both in terms of financial and timescale goals.

Customer satisfaction is reduced

Better leadership can create a significant increase in customer satisfaction, and this, in turn, can help to increase revenue. The reverse of this is, of course, that poor leadership can have a negative impact on the satisfaction of your customers and therefore reduce revenue.

Reduction in productivity overall

Leadership can either help or hinder productivity, it is the driving force in this area. Poor leadership results in negative employee satisfaction, and this reduces overall productivity.

Employees cannot be productive 100% of the time, every day, all day, but with the right leadership, overall productivity will be higher.

Conclusion

There are a number of significant costs that can be attributed to poor leadership within an organisation, and none of them are great for an organisation. Productivity, profits, employee satisfaction and employee retention are all issues that can arise from poor leadership, and the longer this type of status quo remains in place, the greater the losses can be to an organisation.

Poor employee retention, in particular, can make it difficult for a company to not only retain staff but also find new employees who have the experience they need. This is not least because continually advertising for new staff is bound to have people asking questions.

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