The Leadership Gap

By Brad Federman

“Team. Everyone has heard that gas prices continue to rise. The advantage this has for us is that it will increase application flow and has the potential to lower our average wage. How, you ask?”

What follows is a memo full of reasons why this company can take advantage of those without disposable income living paycheck to paycheck. This memo is from a real executive that sees the labor pool as desperate and at times seems giddy about it. At the end of the memo, he talks about being an employer of choice by getting schedules completed early.  

The memo is more than tone deaf.  The executive is so far removed from his employees that he almost describes them as pawns on a chess board. You might be thinking this is an isolated incident, but it is more common than one might think.

The CEO of Neiman Marcus Group, shortly after emerging from bankruptcy, was featured in a magazine targeted to high-income earners. He and his husband were photographed sitting on a “custom sofa . . . upholstered in silk velvet.” Unfortunately, the article was published just as many Neiman Marcus’ employees were facing pay cuts or job loss. 

Goldman Sachs’ CEO, David Solomon, demanded all employees return full-time to the office. But on the day the investment bank had set to reopen its U.S. offices, only 50%, or 5,000 of the building’s 10,000 workers, showed up to its New York headquarters.  

No wonder we are seeing lower employee engagement numbers and a lack of trust in our leaders. In one recent study, 85% of employees said they were unhappy with their employer’s support. Another study found that less than 25% felt their employers care about them and their well-being.  And in a third study, 54% say leadership is completely out of touch with employees.  

I am not suggesting that companies are evil. In fact, many companies treat their employees well and give back to the community. What I am suggesting is that we have a big gap, or gulf, to address.  Leadership generally lives in a different world from their employees, with different circumstances and pressures. Many managers, leaders, and especially executives are far removed from their people on a daily basis at work and it is compounded with the differences in their home lives. It is simple to see how one can lose a sense of empathy. Comparing everyday situations – such as the ability to afford quality childcare, having reliable transportation, being able to choose where you want to live, having help around the home such as a housecleaner and more – it is easy to see how one can lack understanding. There are a number of reasons why this chasm has gotten worse over the years.  

Income stratification.  In economic terms, income stratification reflects the great difference in how income is distributed between individuals, groups, and populations. It is a significant part of how we recognize socioeconomic statuses, meaning the upper class, middle class, working class, and the poor.  Over the last several decades, the difference in wage growth between classes has been significant. For instance, CEO pay has grown 940% since 1978, while the average worker pay has only risen 12% during that time. What that illustrates is that back in 1978, there were at least some commonality between executives and workers. Today? They live in completely different worlds.

Space.  We live in a world where executives have private bathrooms, dining rooms and even separate buildings. I once worked with a CEO that was on his own separate floor, behind a false wall that only his receptionist could open with a special hidden button. When you went to that floor, you would not even know he was on it. Hidden away from view, never having to interact with the populace, the commoners.  It is almost like we are going back in time to the days of the aristocracy.  

The Grind. Time is one of the hottest commodities today. When you lack time and must save it, what do you do? You cut out small talk and interactions with those that you do not report to, or need in the moment, instead of prioritizing and cutting out tasks. Innocent enough, but it leads to less management by walking around, skipping or limiting town halls, losing your cadence on team meetings and one-on-ones. Relationships pay the price and connections, relating and understanding fall by the wayside.   

Shareholder value.  Companies always existed to make money. I have never seen a legitimate organization want to consistently lose money. However, in the last couple of decades stock price and shareholder value have taken on a much larger role, overshadowing other goals and responsibilities.  There were days when most companies had doctors on staff, and offered more stable employment among other things. In the last several years, we have seen full-time jobs become part-time, benefits cut, and a variety of other tricks to produce a higher profit at the expense of the worker.   

This gulf has only been exacerbated by technology. Technology has the capability to create connections. Technology can bring people together and make the world a smaller place. Unfortunately, we have seen technology used to reduce the human connection because it is more efficient and cost effective. We have also seen the need technology has created for clicks and followers. Technology has warped the behavior of people and companies all vying for attention and creating more extreme stances or superficial efforts to fit in with the next trend. What does all of that amount to? Distrust and divisiveness.  

All of that changed when COVID-19 wreaked havoc on our nation. Covid-19 temporarily has improved our leadership skills. In many ways, it sharpened the key leadership skills necessary for success in today’s workplace:  Empathy and Emotional Intelligence.  

For the first time, company leadership is heavily focused on the health and well-being of their employees. You are probably asking, ‘’How could a virus give us such a gift?” The virus stripped away a great number of privileges that leaders in companies took for granted every single day. High-level executives are dealing with the fact that their cities and towns have shut down and their kids are going to school virtually. It is difficult for them to get certain supplies at times such as toilet paper or disinfectant wipes, and many of the special services they have grown accustomed to are no longer available. They struggle on Zoom calls with pets jumping across the screen, how to change the virtual background, or children coming in with questions. And when they see their employees going through the same things, there is a sense of connection, camaraderie, and understanding. Leaders have gotten a glimpse into their employee’s lives and have experienced some of their challenges as well. It has created an evolvement in their empathy and their emotional intelligence when it comes to working with their people. In other words, it leveled the playing field. Think about it: as perverse as it may sound, for many, COVID has been a great equalizer.  

Unfortunately, this spike in leadership skills was a sugar high. It did not last long. Higher level executives have found themselves under more manageable circumstances; they want to go back to the way things were. We are seeing out of touch and tone deaf headlines made by people who don’t really understand the impact of their directives and pronouncements, which is why over 50% of employees feel they have no one to turn to when there is a workplace issue. There is a lack of trust between employers and employees.  

We must change our approach. We must lead more intentionally. We must cultivate a culture that gives voice to all walks of life. Leaders must serve others, listen to what is important to their people not when it is convenient, but when it is inconvenient. Our job as leaders is not to push, but pull. We must offer purpose beyond making money. We must create real meaning in people’s work. And we must inspire our talent along the way. We can only do those things if we create the space and level the playing field. The leadership gap is based on proximity or the lack thereof.