Leadership is Energy Management

Managers are responsible for maintaining control over processes and time management. Leaders are responsible for value creation and energy management. They lead people who are not units of time but energy and commitment. Time is not a critical reference point; rather, energy utilized and value created are more important.  

Sanjay Khosla, a former president of the developing markets of Kraft Foods (now Mondelez International), always suggested that his team not try to do it all but focus on just a few things, making them extraordinary, thus keeping their energy focused. His approach allowed the business to grow from $5 billion to $16 billion in six years while improving profitability and cash flow. 

In my latest book, Beyond Chaos: How to Create Clarity When Everything Falls Apart, I explore the nature of chaos and clarity and found that clarity is how you beat chaos by creating energy and mobilizing effort.  

For leaders, energy is the biggest asset, or maybe sometimes the only asset they have, when facing chaos. The number one job of leaders is to maintain energy.  

Success formula 

More than 76% of leaders have chaotic thinking, and they talk about mission statements, purpose, and ultimate goals without any clarity. Many pretend that they have clarity. Yet, if clarity doesn’t energize, it is not clarity.  

If chaos is a mess of diffused or diluted energies, then clarity is a focused and productive energy itself. Aslak de Silva, a Hoi Jeon Moo Sool (Korean Hap Ki Do style) World Champion with nearly 100 full-contact fights often applies lifelong learning from martial arts to leadership. He is the ex-CEO of Nordic Business Forum and Selfly Store. In leadership, for Aslak, clarity is not about the fine details in between but about the outcome – “Clarity allows optimal application of all your energy. Clarity is energy.”  

How to express energy most simply and practically so that leaders can apply it the next morning?  

If we look at the nature of the leadership energy that resides in clarity and is needed to create a positive vision, then we would come to the energy of leadership being equal to value for people multiplied by the effort squared, or El = V x Ef2, where El – energy of leadership, or leadership success 

The energy of leadership defines success or failure. A leader creates a vision that must be compelling and creates energy that powers the vision from the present into the future. Energy applied to vision instantly changes the future. This energy is not stable but fluctuates in accordance with how much effort is applied. 

V – value for people  

Value for people is a multitude of different things. Opportunity for growth, contribution to society, effect on the environment, customer value, and financial gain. When we think about a vision, we think about a much broader definition of value than just shareholder value or profitability. It is value delivered to the full spectrum of stakeholders. It is the value that radiates with energy, touching and impacting everything within its field. 

You can always scale the value, but you can’t scale the price tag.  

Think of the questions: 

• Can you clearly articulate the value that your employees will gain through achieving the vision?
• Can you clearly articulate the value that your customers will gain?
• Can you clearly articulate the value that all other stakeholders will gain?

Ef – Effort 

Effort seems self-evident. It’s the amount of energy applied. When we think of effort, we see Archimedes using a fulcrum to apply a minimal amount of effort for a massive output of energy. The effort must be highly leveraged. Every unit of effort should yield a substantially larger unit of value. Effort must be a force multiplier. If we look at value as a factor of energy, then the effort applied to the vision would equal a higher energy level of value.  

Think of the questions:  

• How do you ensure the effort of every team member in the execution of a vision? 
• What do you do to inspire people to act on your vision? 
• Do you engage all relevant stakeholders in the execution of your vision beyond formal arrangements?

The key question for today’s leaders is – Do you manage time or energy, and what do you communicate to your team?   

The answer to this question shows whether you are leading people or managing processes. This is where this simple equation helps. I use it while coaching and training large and small businesses, and it works so well. This approach helps shift a mindset to interact with the future and embraces its nature as energy, which is critical for future achievements. 

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Written by Dr. Oleg Konovalov.