The age of humanistic leadership is here to stay.

No one ever liked having an authoritarian boss (unless they liked to suffer), yet for decades, this type of leadership has been tolerated and even promoted in certain cultures.

I can already hear some old-timers groaning as they read this: “Why can’t things stay like they were! My style of leadership worked before, why not now? Younger employees are entitled and spoiled. They have to pay their dues like I did and comply with what I want them to do.”
Here’s why that no longer works.

If you make people fear you, or resent you, the last thing they are going to do is give you their support and ideas. In today’s tight employment market, talented people have a choice of who they want to work for and with. Innovation and creativity along with hard work are more valuable than ever before. Competition is fierce in almost every industry vertical, and change is a constant. Therefore, holding on to talented people and reducing churn is critical to remaining competitive and viable as a business.

What’s interesting is that younger generations are not as motivated by money as past generations. Research shows that the work environment, how one is treated, and if one is allowed to speak up and be heard are most important. Unless someone is in pure survival mode, you can’t hold on to them by throwing more money at them. A churn rate of 15%-25% is common at many mid-to large companies. Most companies experiencing a high rate of churn have employees complaining about authoritarian bosses, lack of acknowledgment for their work and their ideas, and not having a clear career path going forward.

I brought all of this up to a 55-year-old CEO the other day. His response was: “So what? They’re spoiled. I can always get someone else. If they don’t like working here, they can leave.” I told him that’s exactly why I was brought in to coach him. He was constantly giving orders and, not listening to younger managers, so they were leaving the company. He wasn’t happy with my saying that, but (to use his own words) so what! There is always another CEO to coach.

Here is a metric that I have found to be true: If an employee feels stifled or mistreated, they become very unhappy. As a result, they spend approximately 60%-70% of their time actually doing their job and the remaining 30%-40% of their time complaining and/or looking for another job. This not only kills productivity, but it increases costs by 40% because you are still paying them 100% of their salary or hourly wage.

There is another cost as well, and it’s a big one: low morale. A negative employee can drag down the morale of an entire team, which can negatively affect everyone’s productivity. This greatly increases the cost of having just one unhappy employee.
Authoritarian management can cripple an entire company’s profitability in a very short period of time. It can also severely affect the ability to recruit good talent. If you have several, negative employee reviews on a site such as Glassdoor, you can have recruiters seeking potential hires all day long and have little to no success.

Thankfully, this type of leadership isn’t tolerated by younger generations today. When your employees complain about an authoritarian manager, listen to them. Some of what they say may be exaggerated or unreasonable, but from my experience, there is usually a real problem that needs to be addressed. The damage an authoritarian boss can cause can eventually become irreparable as it becomes part of a company’s culture.

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