In their forthcoming book Ego Free Leadership to be released in mid-March, Brandon Black, former CEO of Encore Capital Group, a debt recovery firm, and Shayne Hughes, president of Learning as Leadership (LaL), a culture change firm, describe how they worked together to root out unproductive ego habits from Encore. Black himself was a reluctant participant. But slowly, as the team started collaborating, Encore’s profits rose by 300 per cent. Excerpts from an interview with the authors on how they introduced this change:
In the beginning you highlight the difficulties in getting Encore executives to cooperate. A lot of them poke fun at the exercise. Is this a common problem? How do you overcome it?
The larger problem at the beginning of our partnership was the lack of engagement from the CEO. His refusal to engage gave his team permission to do the same.
We address this challenge by conducting an in-depth interview-based 360º feedback for team members. Each leader is coached through their defensiveness to recognise the behaviours most in need of attention. Deep down, everyone wants to grow — but sometimes it’s uncomfortable, initially. Creating a safe environment for leaders to acknowledge the consequences of their derailers helps them take ownership for their own development.
Is it guaranteed that if the leader buys in, the others will too?
There is no way to guarantee that everyone will engage. For some people, working on themselves is simply too uncomfortable. We mix leaders from different companies so that they can begin to talk through their leadership dysfunctions with people they don’t work with, which can greatly diminish their fear of opening up.
Unfortunately, over time, those individuals who don’t learn to work on their ego tend to have a hard time performing at a high level in the organisation. If we don’t look at our weaknesses, in time our roles outgrow us.
Among all the cultural dysfunctions that you find in firms, which is the most common and which is the toughest to overcome?
Conflict avoidance is the most widespread dysfunction in large organisations. Even leaders such as Brandon who love to aggressively debate business topics often struggle to give feedback on behavioural or performance issues. Those who don’t avoid err to the opposite: harsh steamrollers who don’t listen well. A caring yet direct executive is rare.
This communication shortcoming contributes to one of the toughest tendencies to overcome: our visceral fear of — and compulsive tendency to — judge. Our constant judgement of others erodes trust in our teams.
Is coaching needed only when companies are facing major turmoil?
We actually work more often with leaders and teams who are doing well. Companies send individuals with high potential to groom them for the next level. Newly formed teams come to start on the right foot. Most often, companies in growth mode send executives who are stretched in new roles, managing more people and greater complexity.
There is as much, if not more, bottom-line performance to reap from making a functional team outstanding than there is in making a struggling team functional.
Do you think startups such as Encore are more receptive to coaching and personal growth sessions rather than old corporations?
At the time Encore engaged with LaL, it was a public company with revenues of around $100 million and a workforce of more than 1,000. While not a start-up, it was trying to build a new business line from scratch and integrate an acquisition along with opening an international operating center. It was those challenges that drove the leadership team to engage with LaL. We believe every company has challenges similar to Encore, regardless of size.
The challenge larger organisations face when dealing with cultural transformation is that they have more layers of leadership that need to embrace the change. Smaller firms can be more nimble and drive change more quickly.