In this episode: How does poor leadership affect a business? Jon Peyton covers three areas: the taskmaster versus the coach, succession planning, and culture. He draws on four books every leader should read and on his own experience working for both kinds of managers.
Key insights
- A coach asks how to replicate a top performer. A taskmaster asks why they aren’t following the activity metrics.
- Before you let someone go, see whether a different seat suits them better. Retraining often costs less than rehiring.
- Promoting from within usually costs less than hiring from outside, and a succession plan keeps every key role covered.
- A sound succession plan reassures employees and buyers alike, which supports enterprise value.
- People don’t work for people they don’t respect. Culture starts at the top, and turnover shows where leadership is failing.
Episode timeline
- 0:00 How poor leadership affects your business
- 1:08 Everyone has been shaped by a leader
- 2:12 Three parts: taskmaster versus coach, succession, culture
- 3:07 Good to Great: the right people in the right seats
- 6:56 Emotional Intelligence: EQ versus IQ
- 8:07 Execution: people, strategy and operations
- 10:38 The Effective Executive
- 12:23 Jon’s story: results versus activity
- 16:58 Succession planning
- 18:11 The cost of hiring from outside
- 21:54 Succession planning and enterprise value
- 23:27 Culture starts at the top
- 28:16 What Undercover Boss reveals
- 30:20 People don’t work for people they don’t respect
The episode in brief
Everyone has been shaped by a leader. Parents, a first boss, a commanding officer: we’ve all been influenced by someone in charge, for better or worse. Jon looks at what poor leadership does to a business and to the people inside it, in three parts.
Taskmaster or coach. Jon recommends four books. In Good to Great, Jim Collins describes the business as a bus. Sometimes a good person is simply in the wrong seat, and moving them is cheaper than losing the training you’ve invested. In Emotional Intelligence, Daniel Goleman explains why understanding and managing emotions matters as much as raw intelligence, at work and at home. In Execution, Larry Bossidy and Ram Charan cover people, strategy and operations. In The Effective Executive, Peter Drucker lays out the practices that keep a team working in harmony.
Results versus activity. Early in his finance career, Jon regularly hit or exceeded his results with less activity than his managers required, and he was criticized for it. A taskmaster sees missed activity targets. A coach asks what the person is doing differently and how to teach it to everyone else. Jon now leads that way.
Succession planning saves money. Training from within is easier than training from outside. Jon gives an example. An internal promotion might mean a raise the employee is thrilled with, while hiring the same role externally could cost noticeably more, plus onboarding time and a new personality to integrate. Every role, including leadership, should have someone being developed to step in when there’s a promotion, a departure or a loss.
It also protects value. In a sale, employees worry about what will change. A clear succession plan and training program tell them there’s still a path forward. It tells a buyer that loyal people will stay and keep delivering, which supports the value of the company.
Culture starts at the top. Employees copy what successful leaders do. Jon recalls one manager who made him want to transfer offices, and another who coached him through a difficult time, giving him leeway with clear limits. He only appreciated that months later. Leaders should check in with skip-level employees, ask for candid feedback and watch turnover by team. If you need to go undercover to hear the truth, the culture already has a problem.
Don’t fail upward in leadership. Fail fast and often early in your career. A poor leader at the top doesn’t fail upward; the negativity follows them and costs the business.
Key action items
- Find what your top performers do differently. Ask them how they get results, and turn the answer into training for the team.
- Try another seat before letting someone go. Ask whether a struggling team member’s strengths fit a different role.
- Name a successor for every key role. Identify who could step in and what training they need.
- Review turnover by manager. Look for patterns, then coach or make changes where leadership is the cause.
- Ask for upward feedback. Hold regular skip-level conversations and keep them confidential.
Listen next: Episode 17: Company Culture and Entrepreneurship: It Begins With You
This episode is educational and isn’t legal, tax or financial advice. Speak with your own attorney and advisers about your situation.