Washington is great at generating deficits, most notably the budget deficit and the trade deficit. Both are bad, but I want to talk about the “leadership deficit.” John Kotter first coined the term in 1990s. Here’s my take on it.

For an individual, a leadership deficit occurs when negative behaviors (those that detract from effective leadership) exceed positive behaviors (those that promote, or display, effective leadership).

For instance, you can have the eloquence of Barack Obama–a very positive behavior- but if the rest of your performance is terrible, you’ve got a leadership deficit.

We can also apply this to the organization. Identify all the positive leadership behaviors we see in an organization, and compare them to all the negative leadership behaviors. Or simply compare the number of leaders with leadership deficits to the number with leadership surpluses.

The Story: A client inadvertently developed a way to do this. After a long afternoon strategy session with the two top people in this organization, we were discussing management and leadership in the organization. Just an informal discussion over beer and sandwiches.

The top guy said, “You know, when you look at the managers we have, most of them are pretty bad.” His deputy disagreed, “No, we’ve got some bad managers, but most are pretty good.”

The top guy said, “Oh yeah? What about John Smith?” The deputy said, “Yes, he’s pretty bad. But we’ve also got Marge Jones and she’s great… ” They proceeded in this fashion, and I started keeping score.

Of the forty managers, 23 of them were pretty bad. They had a leadership deficit-more bad leaders than good.

The funny thing is, they’d never really had this kind of open, detailed discussion with the bad leaders during performance reviews.

And, they discovered that their leadership deficit involved some deficit spending: They weren’t dealing effectively with the negative behaviors, so they were actually rewarding those bad leaders with pay increases and favorable ratings.

Only when they revamped their performance review system did they get rid of this leadership deficit (and some of the bad leaders), and turned their leadership deficit into a leadership surplus.

The Lessons Learned

Lesson 1: You must periodically do an “audit” of your personal leadership to determine whether you have a surplus or deficit.

1. Simply identify the leadership attributes you think you need to be successful.
2. Compare those to the leadership attributes you currently have,

Lesson 2: You must also do the same with your organization. Use one of the 2 methods above.

1. Compare leadership behaviors needed vs. those actually displayed; or
2. Assess which managers in your organization are “good” managers vs. “not so good.”

Lesson 3: You need to know how much these deficits cost the organization.

Lesson 4: You must develop and implement a plan to improve leadership. Without a plan, it just doesn’t get better.

Lesson 5: Measure results, and adjust your plan accordingly.

What are you doing to make sure you’re running a leadership surplus, individually and within your organization?

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Terry Wall–Accelerating Organizational Excellence through: Leadership Development, Facilitation & Strategic Direction, Team Building, Executive Coaching, Assessments & Surveys

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