Over the years, I’ve been positioning the idea that building a strong leadership culture can be the ultimate differentiator for any company.
In the end, an organization with stable, sustainable leadership creates confidence in customers, employees, investors and the market.
On the flip side, weak leadership creates uncertainty and undermines the ability of a company to be successful.
This is being played out in real time with Angie’s List, an online membership service that connects consumers with professional services.
Angie’s List produces recommendations based on thousands of consumer ratings of carpenters, electricians, auto mechanics and other service providers. Since it was founded nearly 20 years ago, it has proven to be a popular destination for browsers.
Recently however, Angie’s List has run into a ton of trouble. Now a publicly traded company, the company’s share prices have nose-dived, and many market pundits have soured on its future prospects. What is going on at Angie’s List?
It seems that no one is entirely sure. However, the recent departure of two high-profile leaders has not helped.
In June, CFO Robert Millard stepped down. In October, Chief Technology Officer Manu Thapar also left the company.
Were the departures just part of the normal ebb and flow of executive talent, or is there some other issue with leadership at Angie’s List?
In the absence of fact, investors have made up their own minds and started abandoning Angie’s List in droves.
The Angie’s List story is a cautionary tale for any organization that suffers from ineffective or unstable leadership. If not addressed head on and left unattended, leadership uncertainty can and will be viewed by investors and clients as a sign of dysfunction. It undermines confidence and will ultimately affect a company’s profitability and long term growth potential.
When top executives begin to flee a company, you can bet that the trouble has been brewing for some time.
It is very rare for top executive talent to flee on a moment’s notice; these are problems that take months, if not years, to build up. The reason why investors and clients react negatively to the loss of executive talent is that it implies bigger problems have taken root in the company.
In other words, if you wait until top executives begin to leave your company, then it’s probably already too late.
Organizations with strong, effective leadership culture are rarely abandoned by their leaders. Top talent can be fluid, and there will be a natural turnover as good people move on to new challenges, and new leaders come on board. But when the flow of executive talent seems to be predominantly outward, that is a pretty clear sign there are bigger concerns.
The moral of the story is pretty clear: the most successful organizations have a leadership culture that helps them retain and recruit the best executive talent. These organizations focus on building a strong community of leaders which acts as the ultimate differentiator.
In contrast, those organizations that are constantly losing their leaders, often without any warning, are demonstrating the telltale signs of a leadership crisis.
And that, ultimately, is very bad for business.
Here’s my video on building a strong community of leaders. Let me know what you think.
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About the Author
Vince Molinaro is the Global Managing Director of Strategic Solutions at Lee Hecht Harrison. He is also the author of The Leadership Contract – a New York Times and USA Today bestseller. Vince has spent more than 20 years as an adviser to boards and senior executives looking to improve leadership in their organizations.Follow on Twitter More Content by Vince Molinaro