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Energy of Business Leaders Rises, But Productivity Declines

Latest research from USC Center for Effective Organizations explains findings.

by USC Marshall School of Business
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Image courtesy of University of Southern California Marshall School of BusinessThe energy of business leadership — their ability to do work--is on the rise. While this might sound like good news, the fact that too many business leaders are working above or below their optimum energy level actually translates to a loss of productivity all around. Theresa Welbourne, an affiliated researcher at the Center for Effective Organizations (CEO) at the USC Marshall School of Business, explained this unexpected finding in her latest research.

The quarterly Leadership Pulse research found an overwhelming 82 percent of business leaders are not working at their best energy level — where they maximize productivity, meet challenges head on and look for opportunities to accomplish more.

Of the 540 business leaders who participated in the study, 61 percent reported working below their optimal energy level, while 21 percent are working above their best energy level. Only 18 percent reported working at their most productive energy level.

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“These findings are a cause for concern,” said Welbourne, who conducts Leadership Pulse quarterly in partnership with CEO, human resources consulting firm Mercer and technology partner eePulse. “We have over 15 years of research from hundreds of thousands of individuals showing that optimizing and directing energy positively drives high performance and growth.”

As Welbourne explained, working above your best energy level is counter-productive. Mistakes are made more frequently, and small obstacles easily become big problems. Working at this level for too long can lead to burnout.

On the flip side, when leaders work too far below their optimal energy level, they avoid challenges and boredom sets in easily. Among the leaders surveyed, this was particularly a problem for senior managers, vice presidents and CEOs more often than executive vice presidents and CFOs.

So how can organizations improve energy and productivity?

“Leaders need to measure and understand their own energy and that of their employees,” Welbourne said. “Most organizations know their employee engagement levels, but that’s only a start. Energy changes on a regular basis; thus, to optimize and direct it, more frequent measurement needs to be taken. Once an organization knows what the energy levels are, then leaders, managers and employees can focus on how to make improvements that directly drive positive energy.”

Fortunately, the answers are often not complex, Welbourne added. In many cases, small and quick changes can have lasting and substantial impact on employee energy at work.

Related to sub-optimal energy scores is a change in confidence. The study revealed that leaders are losing confidence in their abilities to take advantage of improving economics and talented employees. The annual audit of confidence showed declines in leader confidence in themselves, their leadership teams overall, their ability to change and their ability to executive on their vision.

According to Welbourne, the current models of business management and leadership are not working.

“The pace of change is higher than today’s leaders are equipped to handle, and they need simple, fast and lean ways of doing business,” said Welbourne, who is also FirsTier Banks Distinguished Professor of Business at the University of Nebraska-Lincoln. “We talk a lot about moment management, energy trending and recovery — because things go wrong. The new leadership tool kit is being developed, and training in these tools is critical for success.”

The research also noted that there is a very clear correlation between leadership confidence and an organization’s financial performance and rate of change. The highest confidence levels are seen in leaders in organizations that reported high to very high financial performance and in organizations with a moderate rate of change.

“There’s a lot of talk today about wellness and mindfulness. An awareness that we cannot continue to burn out employees is growing; however, it’s time to move toward doing something about the current work environment,” Welbourne said. “The best solution may be working with employees directly; teach individuals about their own energy and help them learn how to start the right conversations needed to make small changes to improve performance one person at a time.”