How Leaders Can Boost Productivity and Reduce Turnover

I was recently asked to contribute to a new leadership book. The author first asked how leaders can boost productivity “apart from salary increases.”

Numerous studies show that money can demotivate, but rarely does it motivate. The highest productivity levels come from a good balance of management and leadership. Management is planning, organizing, controlling, strategies, technologies, etc. It’s the intellectual, rational, and headspace. Leadership is feelings, inspiration, values, caring, etc. It’s the emotional or heart space.

Many organizations are techno-managed. “Human resources” are factors of production. They’re dehumanized with AI, automation, and technical optimization to increase productivity.

Decades of research find the most productive and effective organizations connect the heart, head, and hands of people to focus on their larger purpose of serving their customers, communities, and society. This means developing both leaders and organizational culture. The two create upward or downward reinforcing spirals. Highly effective organizations make people stronger for organizations and organizations stronger for people.

The goldfish analogy illustrates the impact of people-centered values focused on growth and development. If you buy a little goldfish and keep it in a small bowl, it will grow a few inches for the rest of its life. Move that same fish to a large aquarium, and it will double or triple in size. Put the goldfish in a large pond, and it can grow up to a foot long. The key factor determining the size of the fish is the size of its environment.

Less effective managers see people as they are and treat them according to what they see. He or she would take a small goldfish and keep it in the little bowl because it would be inefficient and wasteful to put it in a larger environment. Strong leaders see people as they could be and coach them to grow their potential.

Leaders provide a bigger environment by delegating autonomy. Strong leaders are strong coaches (see chart for illustration of coaching’s impact). They clarify performance targets, develop skills and abilities, reinforce progress, and build on strengths.

Are you a small fishbowl manager or large fish tank leader? How do you know? You can use this Fish Tank Factor mini quiz for a quick self-assessment

What’s the best way for an employer to lower employee turnover?

In three words, strengthen leader effectiveness. Many studies of turnover and engagement show that people join an organization and quit their boss. Some quit and leave. Many others quit and stay. They disengage and reduce their efforts.

Research on attracting and retaining people shows that 60% – 70% of the time people quit is because of their immediate boss. Zenger Folkman has a database of over 125,000 leaders assessed by over 1 million direct reports, bosses, peers, and others. This chart shows the impact of leadership on employee engagement and turnover.

Many leaders keep searching for programs and systems to increase productivity and reduce turnover. Some of them are helpful. But leaders can find the biggest factor by looking in the mirror.