Great leaders, regardless of the arena they lead within, share one absolutely essential trait.
“I’ve got your back.”
It is, without a doubt, one of the most satisfying things to hear from one’s leader.
In a single phrase, a leader can differentiate him or herself from the managerially mealy-mouthed “we’re all in this together” to the semantically and substantively different “I’m backing you.”
Such is the embodiment of the single trait–and it is a trait–that differentiates great leaders from all the also-rans.
Great leaders underwrite the risks their people take.
It’s the essence of great leadership. It encourages, extends, and drives people to levels of performance that the individual would not have thought possible.
What it means to underwrite risks
In the financial world, the underwriter is the one who bears the residual risk of non-performance. Underwriters back insurance, loans, mortgages and equity offerings.
The word derives from the 17th century birth of the insurance trade. In those early days, members of the Lloyd’s of London insurance market would write their names under (therefore underwrite) the risks being undertaken by ventures (usually ship voyages) that they would insure.
The underwriters, in exchange for a premium, backed the risks they underwrote.
Because of this insurance, shipping companies were freer to engage in commerce individually than they otherwise would be.
That’s what great leaders do. They explicitly backstop the risks their people take.
Sure, they extract a premium from their teams in the form of performance and value.
And, sure they don’t underwrite all risks. That would be absurd.
But, they provide cover…protection…a backstop.
And, their people know it; because it’s explicit.
Great leaders underwrite the risks they ask their people to take. In doing so, they quite literally enable people to accomplish more than they could alone.
Why this matters
Why does the backing of a leader allow for out-performance by followers?
The reasons are many. Here are a few:
- It inspires confidence – Dwight D. Eisenhower, in his letter to the Operation Overlord troops prior to the D-Day invasions in Normandy in 1944, told each man of his “full confidence in [their] courage, devotion to duty, and skill in battle.” Confidence is a tremendous asset when pursuing risky ventures.
- It encourages action – Leadership underwriting allows people to try new things more easily. Think of it as the social venture capital of innovation and initiative.
- It encourages stretch – Like the safety net for an acrobat, leadership underwriting allows for a more complete exploration of one’s talents. It encourages people to take on stretch roles.
- It neutralizes doubt – Doubt can be healthy. Doubt can be paralyzing. A strong leader underwriting his or her people takes the doubt and bundles it up; like any good insurer does.
- It apportions risk appropriately – Great leaders own risks commensurate with those owned by those they lead. At the same time he drafted the words of confidence in his troops noted above, Eisenhower also drafted his “in case of failure” letter. Though it was never required, it famously ended with the words “The troops, the air and the Navy did all that Bravery and devotion to duty could do. If any blame or fault attaches to the attempt it is mine alone.”
Eisenhower knew the risks he had asked his troops to take, and stood ready to take the blame in the case of failure.
He did not equivocate.
That’s why this matters.
So, how do you know if the risks you take are being underwritten by your leader?
The answer to this one is easy. Ask yourself one question.
Do you feel that you are freer while within the sphere of influence of your leader, or do you feel that you have more freedom outside of it?
Because, put simply, it should not feel freeing to leave the sphere of a great leader.
It should feel risky.
Because they have your back.
One of the most important choices we all will make in our careers is the choice of risk sharing relationships between us and our people and between us and our leaders.
How we apportion risk between ourselves and our teams or allow it to be apportioned between us and our leaders essentially shows how much we respect our people and ourselves.
Try it today… Underwrite somebody’s risk.
I’ve got your back.