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The Employee Experience Platform | Culture Amp
Jason McPherson, founding scientist at Culture Amp

Jason McPherson

Founding Scientist, Culture Amp

We all intuitively know that there is a link between leadership and culture. Leadership has a significant impact on the morale and feelings of employees and we know that leadership drives retention. It is the cornerstone of engagement - everything else depends on it.

When I’m talking about the connection between leadership and culture, there are three things that I find particularly interesting:

  1. If people’s perception of their leaders starts to decline, you can expect a quick ~10% drop in overall engagement levels. 
  2. This decline can take a long time to turn around.
  3. There are early indicators that can show you when leadership perceptions are starting to decline or are on the rise. These can help you address an issue before it becomes a much larger problem.

Nothing makes engagement fall faster than when people lose confidence in leadership

It’s rare to see any single factor have a more substantial and rapid impact on engagement than leadership perception. If there’s a perception that leadership is not connected to your people you can generally expect a quick double digit drop in engagement.

It may take just days for people’s perception of leadership to fall, but it can take three to six months for these perceptions to recover (even if immediate action is taken). This is similar across every industry - leaders need to re-establish trust and that requires people need to see their leaders in a range of situations.

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Whilst this is the general pattern, there are some interesting situations when engagement can go up rapidly which may be counterintuitive at first. One of the most profound things I've seen is engagement rising when a company encounters some bad or challenging events. When we dig into the data we often find that the leader hasn’t been very communicative when things were going well, but they start using more honest communication and explaining what’s happening when times are bad. Engagement scores go up because people are really impressed that their leaders are communicating and telling them what’s happening.

Indicators can help detect changes in leadership perceptions

There are leading indicators that can show a decline or increase in how leaders are perceived. These can be found in the answers that people give in employee feedback surveys. In a typical engagement survey, there are perhaps four to six questions that directly ask about the senior strategic leaders of the organization. There are then another 25 to 30 questions in diagnostic feedback surveys that focus in on the broader leaders of the organization.

One of the most telling engagement survey questions on leadership perceptions is “Do your leaders demonstrate that people are important to the organization?” If the answer to this is negative (and increasing) it’s a strong predictor that churn rates will start to increase and engagement scores may drop.

It’s when you see a quick drop in a leadership measure like this that the overall engagement score is likely to fall rapidly and substantially by 10% or more. Whilst it can be hard to predict leadership disasters that will trigger this kind of response, you can often see clues in text analytics. Looking at the extent that people are qualitatively forgiving can often provide clues as to whether a breaking point is on the horizon.

For scores to increase, people need to see their leaders as strong and feel connected to the organization. The question that can indicate the tide is turning is “The leaders at [Company] have communicated a vision that motivates me.” This looks at the ability of leadership to communicate a vision that resonates with people.

We often see a positive connection when a new leader comes in and they are able to quickly and effectively communicate their vision. Once people feel connected to the vision and aligned with the organization's direction confidence rises. They believe they're on a winning team. That's one of the fastest ways for engagement scores to go up.

Leadership has a significant impact on overall engagement in any organization. If perceptions are negative it can be sudden and drastic, and it can take time to turnaround. By focusing on leading indicators you can identify potential problems and turn around how your people perceive leadership. The key is in your employee feedback data.

The top five things associated with good leadership

We know that good leadership is associated with higher levels of Engagement, less churn and higher Glassdoor ratings, but what are the specific things that good leadership is associated with inside organizations?

To understand this we looked at data from over 200,000 people who rated leadership as well as their feelings about a range of other workplace factors. From this we could determine the top five things that were linked to good leadership.

  1. People recommend company as a great place to work
  2. People can make a positive difference
  3. People go above and beyond for company
  4. There is open and honest two-way communication
  5. The right people are rewarded and recognized

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