Leadership is important in determining the course of a firm’s success. Leadership style determines a firm’s overall culture, how it positions itself in the world, how it will face down difficulties. In addition, the true, long-term ramifications of leadership style become evident during periods like the last two years, when the economy is racked by recession.
The challenges presented by the recession reveal the essence of a firm’s leadership by laying bare all the dormant weaknesses that were most likely put in place when times were good. What are these weaknesses? They are primarily related to the culture of a firm’s day-to-day operation, how its personnel are managed, classified, and compensated.
Keep reading after the break.
Is the culture of your firm like Libya or like Brazil? North Korea or the United States? The distinctions determine long-term outcomes for everyone across all levels and mark the divide between ultimate success or failure. One instructive way of looking at his is through Stephen R. Covey’s “Principles of Interpersonal Leadership” as defined in his book, The 7 Habits of Highly Effective People.
The culture of success is determined by a leadership style that is collaborative, positive, and guided by listening and feeling. Borrowing Covey’s terms, we may call this a win/win leadership style. The culture of failure is set in place by a leadership style characterized by isolation, suspicion, pessimism, and dogma. This could be termed a win/lose or lose/lose style.
In difficult times like these, the win/win leadership style can give a firm a crucial edge that will propel it to greater success as the economy begins to improve. Conversely, a win/lose style can significantly limit a firm’s recovery—largely because this style is intrinsically based on enforcing limits. If you were win/lose before the recession, chances are it will be extremely difficult to transform yourself and put yourself in a stronger position after the recession. Conversely, if you were a win/win firm before the recession, you will probably come out ahead because you have a culture based on mutual strengths and rewards that will see you through the difficult times.
A firm characterized by a win/win style demonstrates a high level of trust and confidence in all employees. Collaboration that emphasizes listening, contributing, problem solving, as well as personal and professional growth is valued. The matrix of decision-making is transparent. Most importantly, leadership values staff by investing in them, offering higher, competitive salaries that help elevate and empower.
This last one is crucial to a firm’s long-term success. To the win/lose leader this would seem counter-intuitive because such leaders obsess about reducing costs as a way to increase fiscal performance. The win/win leader would be correct to increase investment in her staff because by doing so she fosters increased productivity and performance. By enriching employees she empowers them to be stronger, bolder, and more confident. When employees are not distracted by financial instability they are psychologically more available to throw their talents into their work.
As studies have shown, employees who feel they are valued for their contributions and who are paid well out-perform those who are not. This doesn’t mean you simply throw money at employees by paying them exaggerated salaries. It means you pay them at a higher scale. You spread more of the firm’s resources across all staff levels and pay them what they are worth. This does three things: 1) it makes people happy; 2) happy people are happy employees and thus more productive; and 3) happy employees feel a more meaningful and mutually enhancing connection with their firms and are more dedicated to help them succeed.
Here is another secret. Firms characterized by the more enlightened win/win style have stronger and more cohesive cultures than those exhibiting the win/lose approach. The win/win firm is more likely to come through the recession in a stronger position because its employees, having been happy for so long during the good years, were more than willing to make sacrifices to help the firm weather the storm. People willingly give more of themselves in the bad years when they have memories of being valued during the good years.
These firms are also socially progressive and open to new ideas. They don’t waste time and resources on meaningless and oppressive office policies like enforcing a dress code. When a firm’s culture is perceived as supportive of individuals, people generally perform at their highest levels and are motivated to always put their best foot forward.
The win/win firm also embraces social media as an extension of its own internal collaborative transparency. This is why some firms are successful at using social media while others appear awkward and inexperienced. For instance, one well-known firm has mastered the art of Tweeting meaningful and informative information about design and business culture. They also encourage their employees to contribute by allowing them time to research and write about ideas that can benefit not just the firm but the profession. They actually invest in their employees to become “thought leaders”.
In contrast, a well-known win/lose office resisted social media for years out of fear that its employees would waste time or write negative things. There was great paranoia on the part of the leadership that employees would get out of control on Facebook or Twitter, that productivity would plummet, and that leaders would have no way to monitor or control it. This firm actually had a full-time internet snooper in the office to police and record people’s internet trafficking during work hours. They even monitored emails. You can imagine what this did for morale.
In the end, the proof of which style works best will be in the economic outcomes and, I believe, in the design outcomes as well. What sort of firm would you want to hire? I would willingly pay more for the services of a firm that empowered its employees and entrusted them with the responsibility of helping me succeed as a client.
To conclude, the win/win firm will succeed beyond the win/lose one because, as Mr. Covey states, “Win/Win is a belief in the Third Alternative. It’s not your way or my way; it’s a better way, a higher way.” After the last two years, the business of architecture could certainly benefit from a higher way.
The Indicator, a weekly column focusing on the culture, business and economics of architecture, is written by Guy Horton. Based in Los Angeles, he is a blogger for Metropolis and frequent contributor to GOOD, Architectural Record, The Architect’s Newspaper and Architect Magazine. He is also a contributing architecture critic for The Huffington Post. Follow Guy on Twitter.
The opinions expressed in The Indicator are Guy Horton’s alone and do not represent those of ArchDaily and it’s affiliates.