THE LEADERSHIP EDGE Newsletter July 2025
Your Guide to Exceptional Leadership
JULY 2025 | 903 words = 4.5-minute read
FROM LAST MONTH'S EDGE
1. Start by Demonstrating Commitment and Vulnerability – Leaders of significant change start by doing what they want others to do. Show your commitment through actions, not just words.
2. Plan to Transform Your Culture – Advocate for comprehensive mental health benefits and expanded coverage as part of your cultural transformation strategy.
3. Get the "Start the Conversation" Program – Available from TiER1 Performance. Contact Meg Switala: m.switala@tier1performance.com
THIS MONTH’S FOCUS: The Engagement Crisis - Why Leadership Matters More Than Ever
Hello Leaders! This month, I'm diving deep into the factors impacting employee engagement and exploring how culture plays a critical role in low engagement, and why we desperately need better leaders.
2024 was a challenging year for employee engagement. Remote work dynamics, quiet quitting, and the lingering effects of the Great Resignation created perfect storm conditions for disengagement.
I'm opening my summer calendar to discuss this topic with leaders who want to drive real change. Schedule a time here.
Point #1: The Engagement Freefall
Gallup has tracked employee engagement for 25 years, and their 2024 findings are sobering: Employee engagement in the U.S. fell to its lowest level in a decade, with only 31% of employees engaged.
The decline was most pronounced among:
• Workers younger than 35 (Gen Z employees dropped five points from the previous year)
• Finance and insurance, transportation, technology, and professional services sectors
What's particularly revealing is that of Gallup's 12 engagement measurements, three items saw the most significant decline (three points or more in "strongly agree" ratings):
1. Clarity of expectations
2. Feeling someone at work cares about them as a person
3. Someone encouraging their development
Notice the pattern? These are all fundamental leadership responsibilities. If employees aren't receiving clarity, care, and encouragement from their managers, there's a leadership problem—and Gallup's data suggests this problem is widespread.
REFLECTION: How engaged are my employees? What if it's not as good as I think?
Point #2: Culture vs. Engagement—Which Comes First?
When examining business success, Harvard Business School's "Service Profit Chain" model reveals something crucial: Culture precedes everything else, including engaged employees.
The chain flows like this: Strong Culture → Engaged Employees → Innovation & Quality → Exceptional Customer Experience → Growth & Profit
If 69% of your employees are disengaged, you don't have an engagement problem, you have a culture problem. Creating the desired culture is fundamentally a leadership responsibility.
Here's the hard truth: Organizations that have chosen to over-manage and under-lead are plagued by rampant disengagement because their culture has become toxic. There's no easy button to fix disengagement once it's taken over your culture.
What won't fix your culture: External motivators like more time off, flexible work arrangements, higher pay, or bonuses. While not inherently bad, these have been proven ineffective at increasing motivation or fulfillment. Employees may ask for these things when surveyed about "satisfaction," but satisfaction and engagement are two separate things.
What will fix your culture: Focusing on intrinsic motivation—the internal drive that compels employees to choose engagement and go the extra mile.
REFLECTION: How do I successfully lead the culture I desire?
Point #3: The 10X Leadership Multiplier
Joe Folkman reveals a crucial finding: "The direct correlation between manager effectiveness and employee engagement shows that employees working under highly effective managers maintain high engagement levels, even in remote settings. Conversely, those reporting to less effective managers show significantly lower engagement."
I've witnessed this firsthand. One client transformed his organization in 18 months—culture and productivity improved dramatically as his leadership effectiveness increased tenfold. Outstanding leadership doesn't just improve cultures; when directly applied to enhancing culture for employee engagement, extraordinary results follow.
The formula is clear: Investment in leadership effectiveness + engagement initiatives = improved culture.
Extraordinary leaders:
• Take responsibility for culture and use consistent methods to assess its health
• Develop comprehensive action plans to enhance team engagement
• Implement strategies, measure results, and adjust their approach accordingly
REFLECTION: How can I enhance my leadership effectiveness and culture to ensure everyone is engaged?
Dive Deeper:
1. U.S. Employee Engagement Sinks to 10-Year Low by Jim Harter - Gallup
2. How Managers Drive Results and Employee Engagement At the Same Time - HBR
3. The Single Most Important Factor In Improving Employee Engagement in Today’s Workplace by Joe Folkman
The Leadership Edge - Sharpening your leadership skills, one insight at a time.