Some time ago, I watched the film “The Way of the Winner”. There is a scene in which Coach Murphy talks to the captain of the rowing team – a young lad who is completely unable to cope with this role and is lost somewhere between his own ambition and responsibility for the rest of the people in the boat. In their conversation, the following sentence is uttered:
Leadership skills are measured in the hearts of the people who follow us.
When I heard it, it resonated strongly with me. Probably because it hit on something I had been carrying inside me for a long time. I always wanted to work with people in such a way that their presence in the team was a choice, not a necessity. I wanted them to come because they wanted to, not because they had no better option.
And that sentence stayed in my head for so long that I started to wonder – what is the indicator that shows that our teams are working well? What will show you that people are not only doing their job, but actually want to do it? With us, not despite us.
A leader who wins on paper
To better illustrate why hard skills alone are not enough, just look at Steve Ballmer. A Harvard graduate with a degree in applied mathematics and economics, he joined Microsoft as its 30th employee. During his tenure, the company’s revenue grew from $25 billion to over $70 billion. On paper, he appeared to be an outstanding manager. In practice, he introduced a “stack ranking” system, in which even in the best team, someone had to receive the lowest rating, which turned cooperation into internal competition. As a result, the best engineers began to leave for Google. How did his own employees rate him? Only 46% approval. Tim Cook had 97% in his first year as Apple CEO. And Microsoft’s share price stood still for fourteen years.
And this was not the only such case. Bob Nardelli, after a failed succession battle at GE, moved to Home Depot. Although he increased revenues, the stock fell 8%, while at the same time, competitor Lowe’s doubled in value. At the 2006 annual general meeting, he was the only board member present in the room and gave shareholders one minute per question. He left with a severance package of £140 million. Carly Fiorina at HP hung her portrait next to those of Hewlett and Packard and used company money to order a £30 million jet for her exclusive use. She laid off 30,000 people and the shares lost 52% of their value. When she ran for president, none of HP’s 302,000 employees donated to her campaign. Not one.
You might think that these are just stories of “bad” managers.
However, when Daniel Goleman analysed competency models from 188 companies, he concluded that at the executive level, nearly 90% of the factors that distinguish outstanding leaders from average ones are emotional competencies.
Not intellectual or technical, because those are merely a ticket to the door.
The price of subordination
Let’s move on from these big names to something that is probably closer to you. To your everyday work.
You probably know a team where people come to work, do exactly what they have to do, and leave. They don’t sabotage or complain loudly. They just don’t give an ounce more than their contract requires. Organisational psychologists call this compliance, formal subordination. And while at first glance it looks like a normal job, the difference between compliance and truecommitment comes at a price. Much higher than you might think.
Leadership and commitment
According to Gallup data for 2024, only 21% of employees worldwide are truly committed to their work. 62% are quiet quitters, people who do the minimum. The remaining 17% actively work to the detriment of the organisation from within.
The decline in engagement in just one year cost the global economy £438 billion. What if all companies achieved the level of engagement of the best organisations? The global economy would gain £9.6 trillion per year. 9% of global GDP.
Gallup’s latest meta-analysis, covering more than 112,000 business units, paints a clear picture: engaged teams achieve 23% higher profitability, 18% higher productivity, up to half the turnover and 78% less absenteeism.
What determines which side of these numbers your team ends up on? To a large extent, one person. The immediate supervisor. Because managers are responsible for 70% of the variance in their people’s engagement.
Self-determination theory
In their Self-Determination Theory, Edward Deci and Richard Ryan identified three psychological needs that drive people at work: autonomy, competence and relatedness. When the environment you create satisfies these needs, people engage naturally, from internal motivation. In control-based environments, this motivation dies away and leads to poorer results, especially where creative thinking is needed. Anyway, quiet quitting is not laziness. It is the body’s response to a place that gives no reason to give more of oneself. I once wrote about something similar – quiet cracking, the quiet breakdown of leaders who continue to give their all, but whose mental resources are quietly depleted, unseen by those around them.
What people look for in a leader
Now that we know how much disengagement costs and how important the direct supervisor is in this, what exactly do people look for in their leader? What makes them want to follow someone of their own free will?
Two models of leadership
James MacGregor Burns once described two models of leadership. Transactional: do this, you will get that. And transformational, referring to something deeper than exchange, to a sense of meaning and belonging. This classification is almost half a century old, but it still accurately shows the line between obedience and commitment. Transaction breeds obedience, but it is relationship that breeds commitment.
4 things people value most in leaders
Tom Rath and Barry Conchie from the Gallup Institute surveyed over 10,000 people, asking them a fairly simple question: “What do you value most in your leader?” The answers revealed four needs that recurred regardless of industry or culture: trust, compassion, stability and hope. Not charisma. Not visionary presentations at quarterly team meetings. People want to know that their leader is honest and that they are treated as people, not resources on a spreadsheet. That they are building an environment where they can plan for the future. And that they can show the direction worth going in.
7 competencies that distinguish the best leaders
Zenger and Folkman, analysing over 300,000 360° assessments, came to the same conclusion, albeit by a completely different route.
Of the seven competencies that distinguish the best leaders, six were related to relationships and emotions: inspiring, building relationships, courage, developing people, collaboration and integrity. Only one – results orientation – belonged to the realm of “hard management”.
You might think it’s a coincidence that these teams simply studied the same thing. But when independent researchers across different decades and populations come to similar conclusions, it’s hard to dismiss it as a coincidence.
How does this look in practice?
But enough theory. Let me tell you about three leaders who showed how this works in practice. And I deliberately did not choose CEOs of large corporations. I want to show you that it works regardless of scale.
Leadership in a crisis
Rich Sheridan worked for years as vice president of software at a public technology company where the culture was so toxic that he deliberately took scenic routes to work. In 2001, he founded Menlo Innovations, a 60-person software company in Ann Arbor, Michigan. When the company lost several key customers and revenues fell dramatically, fear paralysed the team. People stopped taking risks. Then two developers spontaneously collected an anonymous list of fears from each team member — and shared it back with the whole group. Sheridan describes: “Once our fears were exposed, our humility increased and our energy improved.” Sheridan did not have to create this space himself – his culture produced people who did it spontaneously. Because you don’t have to be appointed to be a leader. You become a leader the moment you decide to do something for the people around you. The company survived the crisis without laying off a single person. It has been in business for over 20 years, has won five Inc. Magazine awards for growth, and has welcomed over 20,000 visitors from around the world who have come to study its culture.
Leadership in sport
After losing in the quarter-finals of the 2016 Rio Olympics and failing to win any medals at the 2017 European Championships, Polish volleyball entered a crisis. Vital Heynen, a Belgian, was chosen as the team’s coach. He submitted a detailed strategic plan and promised the committee that he would learn Polish and, after a few months, would conduct training in that language. He kept his word. He replaced rigid warm-ups with “silly games” – the players danced with chairs and raced on shopping trolleys. Instead of locking the players in hotels before matches, he took them on city tours. His philosophy: “I don’t believe in punishing anyone. I believe in rewarding.” Seven months after taking over the team, Poland won gold at the 2018 World Championships. In three years, they won six medals in major international tournaments, after a period when the team had not won any. Heynen did not change the line-up. He changed the atmosphere.
Leadership in a technology company
Joel Gascoigne, CEO of Buffer, expanded his team from 34 to 94 people in one year. Revenues were not keeping pace with costs. On 16 June 2016, he published a post on the company’s blog in which he took full personal responsibility for bringing the company to the brink of bankruptcy. He didn’t just give a general overview – he provided every single figure. He laid off 10 people, cut his and his co-founder’s salaries by 40%, and they both contributed $100,000 in personal loans. He wrote: “This is the result of the biggest mistake of my career so far. What’s worse, it was entirely self-inflicted.” The company became profitable within a few months. In 2018, Buffer bought out its investors, a rarity in the startup world. Today, it operates with about 70 people, on a four-day work week, profitably and without external funding.
Psychological safety
What do these people have in common? Amy Edmondson of Harvard calls it psychological safety, which I have discussed many times in my publications. It is the team’s belief that you can say “I’m afraid,” “I was wrong,” or “it’s my fault” and not be punished for it. At Menlo, two programmers created a space to name fear from the bottom up. Heynen replaced pressure with fun. Gascoigne published his mistakes down to the dollar.
The Aristotle Project at Google (over 180 teams, 250 variables) showed that psychological safety is more important for team effectiveness than its composition or the competencies of individual members.
The heart is not a metaphor
When you hear that leadership “measures itself in hearts,” it’s easy to dismiss it as poetic simplification. However, not only do the stories of leaders confirm this, but so does neuroscience.
Magnetic resonance imaging
Richard Boyatzis and Anthony Jack of Case Western Reserve University put people’s heads in an MRI scanner as part of their research.
A 30-minute conversation based on positive emotional resonance, such as vision and possibilities, was enough to activate the parasympathetic nervous system and areas of the brain responsible for openness, creativity and motivation in the subjects. The effects lasted 5-7 days.
Corrective coaching, focused on what someone is doing wrong, had the opposite effect: it activated the sympathetic nervous system, generating anxiety and narrowing attention. This means that as a leader, you are literally programming your people’s brains. Either towards openness or withdrawal.
Oxytocin and the daily behaviour of leaders
Another researcher, Paul Zak of Claremont Graduate University, described in the Harvard Business Review how oxytocin, the neurotransmitter responsible for trust, responds to the daily behaviours of leaders. Recognition, listening, transparency, empathy. The top 25% of companies in terms of trust have 74% less chronic stress and 50% higher productivity than the bottom 25%. Zak summed it up in one sentence: “Trust is a biological response to the belief that someone cares about our well-being.” It’s hard to find a better scientific explanation for what Coach Murphy said to his captain.
Level 5 leaders and organisational development
Then there is Jim Collins in “Good to Great,” who studied 1,435 companies over five years. Only 11 went from good to great. Each had a “Level 5” leader at the helm, a person who combined personal humility with unyielding professional will.
None of them were charismatic stars. Darwin E. Smith of Kimberly-Clark? A quiet, unassuming company solicitor. Ken Iverson of Nucor? A modest home, dogs from a shelter. Collins noted that charismatic “stars” brought in from outside more often harmed companies than helped them.
A question worth asking
Finally, I would like to leave you with a question that I believe is one of the most important questions a leader can ask themselves.
Robert Greenleaf, the creator of the concept of servant leadership, once asked a question that I consider to be one of the most important questions a leader can ask themselves:
“Are those you serve growing as individuals? Are they becoming healthier, wiser, freer, more autonomous?”
Greenleaf is not asking about quarterly results or satisfaction measured once every six months in a survey. He is asking whether the people you work with every day are growing as a result of that collaboration.
My thoughts return to that coach from “The Winner’s Way” and his words. He wasn’t talking about being nice or giving up on requirements. He was talking about something that will outlast a quarterly report. Something that people will feel and remember, even when they change companies or industries.
If you think back to what we talked about – Goleman with emotional intelligence, Zak with the neuroscience of trust, Collins with the humility of Level 5 leaders – you can see that these completely independent studies point to the same place. Coach Murphy called this place the heart. It’s not about sentimentality or giving up on requirements. It’s about making the people around you feel that you really care about them. And that they don’t have to guess that. It’s about something that will outlast the quarterly report. Something that people will feel and remember, even when they change companies or industries.
I haven’t quite mastered this myself yet. I don’t manage to be the kind of leader I would like to be and that these studies describe every day. But I know that the question I asked myself in front of the screen that day changed the way I think about my teams. More and more often, I wonder if the people who work with me want to be here tomorrow.
And that question turns out to be extremely difficult to measure. But it is also much more important than anything that can fit on a KPI sheet.
