Understanding the essentials of team leadership: the cost-benefit analysis

As your professional career progresses, your job will be directly or indirectly focused on managing other people. Barring very (rare) specific cases, that is a fact. The reason is simple: once you’ve proved to be good enough at your job, you’re expected to scale it up and take it to the next step.  And that means leading other people to do so.

Precisely the acceptance that your performance review will be essentially based on what you’re able to get out of your team, and no longer on how good your personal job, is turns out to be  a big impact for most new managers. In fact, a fair number of them will never accept it entirely. They’d act as such, but, deep inside them, simply keep working exactly as before. The reason is twofold:

  • Inability or lack of training: up to that moment,  most of these new managers have devoted a huge percentage of their time developing a specific set of skills, entirely related to technical or operating topics. From this moment on, however, all this knowledge is taken for granted and, as such, of secondary importance. On the other hand, the total amount of time dedicated to learning how to properly do what will be the core part of their daily job (managing people) is, comparatively, tiny. And that’s true even for those of them holding an MBA. As a result of this, the fresh team leader will have to face his/her new duties with a  feeble theoretical background and a field experience typically inspired (limited) by former bosses. That’s called the golden trap of a vertical promotion, and we’ll have an specific post devoted to it further on.
  • A wrong approach to his/her goals as team leader. The ultimate goal for every team leader should be clear and straightfoward: take the best out of your team at the minimum possible cost. That’s to say: a cost-benefit approach (check this Cornell’s paper on the matter if you’re interested in a deeper look at this concept) Don’t take it wrong: all criteria may and should be included in this definiton: employee well-being, work-personal life balance, economic factors..everything. Investing too little in a potentially outstanding employee is a failure, assuming a disproportionate investment with an unclear return is equally irresponsable. Remember that input factors for these types of investment are, just as any other, two: time and money.

This approach will help us identify our team member’s shortfall and needs and take further action. We’ll use a taylor-made approach for that in another post.

About the author Marc Sansó

Ph.D, MBA. Management Consultant, Professor and Researcher. Keen on competitive strategy, digital economy, FC Barcelona and horror movies

All posts by Marc Sansó →

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