Brandon Black, CEO of Encore Capital, loved a good debate. Strategic direction, market trends, personnel issues—it didn’t matter. Quick on his feet, intelligent, and supremely confident, he was ready to match wits with anyone on his executive team. Sound familiar? Do you know of anybody exhibiting this type of behavior on your senior staff?
Like Brandon, it is likely that these individuals do not see their behavior as particularly troublesome. Yet it is emblematic of a type of leadership dysfunction that undermines team dynamics and is absolutely impacting the bottom line of your company.
Debating, sarcasm, and being judgmental are all common behaviors that weaken emotional or psychological safety. Feeling unsafe is the fear of being criticized, ridiculed, or devalued. When Brandon spoke sarcastically or clashed verbally with his reports, it caused them to shut down and withhold ideas even when they were certain of their point of view.
Brandon at first could not tell the difference between arguing a point because it was really important, and debating for the sake of it. He ultimately learned that he often acted out of his ego’s unconscious need to be the smartest person in the room, maintain control, and not be wrong or perceived as wrong. He also avoided conflict with senior team members when he needed to lay out issues forthrightly with them. Intellectually, he understood the problem, but the costs didn’t resonate with him until September 2007, when he was forced to lay off 110 employees. It was in that moment where he truly recognized that his sarcasm and avoidance had contributed to the situation. People lost their jobs because of his inaction and counter-productive behaviors.
Building “A Climate of Openness”
Brandon took action and began transforming Encore’s culture around emotional safety. Encore set four specific cultural goals, including complete transparency around individual growth and development. It took several steps to achieve and started with Brandon’s commitment to change. First, he eliminated innocuous yet detrimental daily behaviors, starting with his own sarcasm. “It was powerful, and it changed the way we interacted,” said Jim Syrian, Encore’s SVP of operations. “We became more collaborative and honest.”
Instead of barbed remarks, Brandon started to draw his reports out. He gave them permission to express their fears and concerns openly by first revealing his to them. Although this felt vulnerable at first, he established what Harvard Business School professor Amy Edmonson calls “a climate of openness.”
Second, he began tackling performance problems openly, without judgment. He learned to separate his observations from his judgments. Over time, Brandon was able to hold a mirror up to his employees while still having their backs.
Finally, he grew enough to empathize with his employees even when his ego was triggered. It worked. As Brandon put it, “The more we got people’s real concerns on the table, the less we got spun up in personality conflicts. We didn’t have any dissension, so we went very hard, very fast, for a long time.”
Between 2009 and 2013, while the financial meltdown claimed 90 percent of their competitors, Encore’s revenues tripled and its stock increased 1200 percent. Their resiliency started with the high levels of emotional safety in their workplace. The time to build this safety is now, so the day your company is facing challenging business conditions, you and your team are ready to thrive.
Brandon Black retired as CEO and Director of Encore Capital Group in 2013. He holds an MBA from the University of Richmond and a bachelor’s of business administration from The College of William and Mary. He is co-author, with Shayne Hughes (President and Culture Change Partners of Learning as Leadership, a San Francisco-based management consultancy, where he specializes in creating corporate cultures of open communication and collaboration) of EGO FREE LEADERSHIP: Ending The Unconscious Habits That Hijack Your Business.
This article was penned by Brandon and Shayne to provide a glimpse of the lessons to be found in their new book. For more information, please visit LearnAsLead.com/egofree-leadership.
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