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Why Past Practices are Essential to Embrace in the New Economy
So much of the traditional conversation surrounding leadership in organizations today is really off base. Like so many other things in our modern society much of the discussion around leadership is very ego based and is focused upon self promotion and/or creating one’s professional brand. 
In fact, according to Dave Logan, best selling author of Tribal Leadership, approximately 85% of all leadership books are written from what he calls the Stage 3 leadership perspective. He defines Stage 3 leadership as being one that is ego based and ego driven. 
For instance, you will see many books on leadership promoting the individual who wrote them; promoting an industry tycoon or suggesting one acts as a fighter pilot or even as a ninja when leading others. The latter of which was clearly written by an individual who clearly never studied the ancient Japanese martial art of Ninjutsu. I spent four years studying that discipline and I can tell you he had no clue what he was talking about. But he is selling books.


But that is the nature of Stage 3 leaders and leadership models. They are based upon more fluff than substance and designed to get you to buy into to some “fantasy” instead of actually giving you tools that work under fire. And lets face it, real, in the trenches leadership, on a day to day, human to human and incident by incident basis is always a trial by fire. So these folks, while perhaps well intentioned, are actually doing you more harm than good and are taking your money in the process. 
Dave’s research also reveals that 49% of all organizations operate under a Stage 3 egocentric leadership model. Another 25% of organizations are being run by apathetic leaders and another 2% by “vindictive” leaders. 
This means that 76% of all organizations operate under leadership models that empower the wants and needs of a few and which enforce authority as opposed to ones that respect, mobilize and maximize the potential of everyone in the organization. 
This is not good news because the modern era of business demands we maximize our human capital resources. Just as machines and repetitive processes generated the most financial capital in the 20th century the human attributes of creativity, communication and collaboration are the dominant drivers of profits in this century. And egos restrict access to these critical resources.
Since the world has changed forever so too must our leadership models. To not adapt to the modern conditions will prove disastrous. Because study after study has proven, without a doubt, that people simply do not respond well to egotistical managers. And a company hemorrhages money when leadership is weak and the workforce is non-responsive.
The Return of the Elders
If you look up “elder” in the dictionary you get several bland and technical definitions. But if you ask yourself, or others around you, to define an elder I bet what comes out are words that have a sense of reverence about them. People naturally have positive associations with elders. And even if they don’t know how to describe one perfectly, they know one when they see one. 
I submit the reason for this is because the essence of what a true elder is touches upon our souls first, then the mind. And since dictionaries are written by and for brains they do a poor job of describing a word that actually connects to our anthropological tribal DNA. This speaks to the true power of, and the amount of influence, elders have on us, and by extension, our organizations.
One of the sources of their power is the fact that elders are not appointed by those in power. They are anointed by their peers. Elders are also not ego driven and therefore, are not viewed as a threat by anyone other than those who are ego driven. 
Elders are just comfortable being who they are; nothing more or nothing less. 
Who they are reflects wisdom, authenticity and integrity. How they act expresses inner strength and peace. Their words teach and heal. Their actions build and repair. They are in the tribe but are not controlled by it. They hear and listen to a higher power than typical human consciousness. And they help others to connect, or at least benefit from, that which benefits them.
People sense this and trust this. As a result they allow these special people to influence their thinking and to even enhance it. So far removed from any desire for power are elders that many don’t realize they are one. If they do realize it, they don’t allow it to affect them, other than to perhaps make them more committed to consistently acting responsibly.  
They don’t look for followers and as a result they have them. And they are loyal. 
The Importance of Engaging Elders in the Management Process 
By now it is clear why elders are so influential in the organization. They hold leadership positions whether management knows it or not. They are trusted and respected; their advice and insights are sought after and are listened to. Often people will ask elders whether or not to trust, or follow, management decrees. This means their influence often times exceeds management’s.
While this may unnerve some in management they have nothing to fear as long as they operate with the best interest of the tribe and the culture in mind. It is only if leadership becomes too self centered and begins abusing their authority or feeding themselves at the expense of the tribe that they might find themselves in a political conflict with the elders.
If that happens the elders will always win the hearts and minds of the tribe while those in authority will only get that labor which they can force from people. Since we are in a human capital driven economy this loss of employee engagement will result in losses of productivity, profits and possibly even people. 
So it is in the best interest of management not only to know identify the elders but to have healthy relationships with them as well.
To be effective a modern manager must have the tribe’s trust. This is where the elders can help. They must effectively communicate with the tribe. This is where the elders can help. And they must be able to motivate and mobilize the tribe. And once again, this is where the elders can help.
Simply put: Elders mobilize tribes. And it is through tribes that most work gets done. In fact recent research done by the McKinsey Group reveals that 67% of all work done in an organization is done through informal networks (tribes) that operate outside of the org chart. 
Since profitability is tied to accessing, mobilizing and leveraging the human capital of their tribes it is crucial that you find a way to include the input and insights of elders.
When you combine this additional leadership resource with a healthy management team you significantly increase your ability to maximize your profits. 
An Ethos that promotes Elders over Egos is a formula that simply cannot fail.
The following are traits of Tribal Elders.
  1. They are humble
  2. They seem to lack ego because they are comfortable with who and what they are.
  3. They have opinions but never push them on others
  4. They don’t care about titles or prestige but they don’t exhibit false or unnecessary modesty either
  5. They are committed to principles but are detached from outcomes 
  6. They live the “Serenity Prayer”
  7. You trust them, unless you are a troublemaker. Then they unnerve you
  8. They don’t insist upon being heard yet are willing to speak if you are willing to listen
  9. They support growth 
  10. They don’t sweat the small stuff. But they seem to see “everything” and understand most things.
  11. They are kind. But don’t mistake their kindness for weakness. Few are stronger in spirit or character.
  12. They listen more than they speak and understand more than they show.
  13. They are committed to creating the next generation of elders but do not seek followers.
  14. They have strong, steady moral compasses that are not affected by the “group consciousness”
  15. They are, at all times, students, teachers and learners about life.
  16. They believe in a power greater than themselves.
  17. They are wise enough to be forceful and powerful when it is in the best interest of the greater good
  18. If they had a motto it might read something like: I am what I am and I will be that with as much honor and grace as I can muster.

If your organization has the benefit of having one or more elders in it then consider yourself fortunate. If you are one, you probably don’t identify yourself as one but others do. So thank you for your service. 
Jeffrey Deckman is the founder of Capability Accelerators, a consulting firm that specializes in developing resilient leadership teams and organizations...One human at a time. If you have questions or comments he can be reached at   YouTube Channel Link
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Transforming Human Capital into Financial Capital.

Jeffrey S. Deckman, Founder, Capability Accelerators


   EE = EBITDA is an obscure but interesting formula that, once I came to understand, revealed an exciting new source of increased profits that any business can realize.

The “blow up” of this formula is:

Employee Engagement = Earnings Before Interest Taxes Depreciation Amortization

Before going any further I want to say that Employee Engagement (EE) is certainly not the only factor that impacts EBITDA but it does have a significant impact on your bottom line. It just also happens to be one of the easiest ways to increase profitability you will ever come across. 


Because, of all the ways to increase profits such as increasing prices; decreasing costs and generating more sales increasing your levels of EE is almost completely within your control. This is because EE is largely determined by the leadership culture of your organization. And you get to control that.

In fact, a recent Melcrum Employment Engagement Survey of over 1600 HR professionals found that “The actions of senior leaders and direct managers are the most important drivers of employee engagement by a factor of between 400% and 700%.


So not only is this “silent profit driver” largely in your control but the financial impact of increasing the levels of EE in your organization is undeniably real.

In fact, I doubt you could find a single CEO of a Fortune 500 company who even questions whether increasing EE increases EBITDA. 

The Numbers behind the Science: 

In an effort to be as informative as possible as quickly as possible let me get right to the math. 

A recent study done by the Gallup Group in October of 2011 involving thousands of participants revealed that, on average, 71% of people are “disengaged” from their work. Within this group 55% are considered “not engaged”. These people do their jobs but not much more. The other 16% are considered “actively disengaged”. These are people who are actually working against the best interests of the organization. 

This leaves only 29% of the workforce who are considered “highly engaged”. These are the ones who put in extra time; think about their jobs during off hours and are energized. They are the ones who generate the most per capita profit.

This means that 7 out of 10 people in organizations are not engaged in their work. Imagine the lost productivity and profits that represents! And in today’s economy this can spell death to an organization.

The High Cost of Low Employee Engagement

Lets look at how the level of EE in your organization affects your profitability.

The following EE vs Productivity numbers are generally accepted throughout the industry, give or take a few percentage points: 

• “Highly engaged” workers are 90% productive 

• “Not engaged” workers are 60% productive 

• “Actively disengaged” workers are 40% productive. 

When you combine the EE and the productivity numbers the impact on profits becomes clear:

• 29% are highly engaged and are 90% productive.

.29 * .90 * 100 = 26.1% productivity level

• 55% are not engaged and are 60% productive.

.55 * .60 * 100 = 33% productivity level

• 16% are actively disengaged and are 40% productive

.16 * 40 *100 = 6.4% productivity level

This means that your overall productivity levels are:

26.1% + 33% + 6.4% = 65.5%

To make this real lets assume a company spends $2 million on employee compensation. Under this scenario their ROI on that investment is: 

2,000,000.00 * 65.5% = 1,310,000.00. 

This represents a $690,000 “payment vs. performance” gap.

The Big Difference of a Small Adjustment



Now lets look at the impact to your bottom line that will occur if you simply increase the


highly engaged numbers by only 5% and decrease the actively disengaged numbers by the same amount. And if your company is like most, and if you decide to make EE a
priority in your organization, moving your EE numbers 5% in this fashion is not unrealistic at all. 

WARNING: These numbers are almost un-believable!

• 34% are now highly engaged @ 90% productivity.

.34 * .90 * 100 = 30.6% productivity level

• 55% are still not engaged and still 60% productive.

.55 * .60 * 100 = 33% productivity level

• 11% are now actively disengaged and are 40% productive

.11 * 40 *100 = 4.4% productivity level

New productivity levels = 30.6% + 33% + 4.4% = 68% 

New Profitability Calculations: 2,000,000.00 * 68% = $1,360,000.00

This represents a $50,000 improvement in the “payment vs. performance” gap in only one year!

What is also important to realize is that as long as you keep your management teams fine tuned and your culture healthy this $50,000.00 continues to flow to the bottom line year after year. Imagine the impact to your Retained Earnings and the vaule of your business that this will have in just a few short years.

All of a sudden investing in developing solid management teams with excellent leadership skills becomes one of the most important and easy ways to drive significant profits right to your bottom line.

In Closing

If you are like I was when I first started looking at these figures, your initial thinking may be that they can’t be right. But I can tell you that study after study from organizations ranging from the Harvard Business School to the McKinsey Group prove them out.

So while we have all been trained to increase profits by cutting costs; capturing more clients and negotiating for higher prices few of us have been taught how to activate one of the most significant profit drivers available to us: increased Employee Engagement.

And at a time when profits are very tight, competition is tough and the market is demanding it should be very comforting to realize that with just a few internal adjustments you can uncover a source of profits that will not only increase your bottom line but will also increase company morale.

During economic times such as these understanding the EE=EBITDA formula can be a real life saver.

Jeffrey Deckman is the founder of Capability Accelerators, a consulting firm that specializes in helping clients convert human capital into financial capital. If you have questions or comments he can be reached at


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