Devastating leadership failures hit social systems

In the wake of enormous increases in the mental and psychosomatic stresses of employees in the workplace, costs arise that are borne by all those who pay into social systems. "How long can and do we want to afford this gigantic waste?" asks Dr. Wolfgang Hinz, successful book author and expert on leadership culture and leadership behavior. According to Dr. Hinz, leadership errors resemble medical malpractice, which until a few years ago was untouchable. Such errors are not always easy to prove, but could no longer be suppressed and ignored in today's times.

According to Dr. Hinz's calculations, the consequential damage caused by management errors amounts to over 400 billion euros. First and foremost, he cites the economic damage that burdens companies and thus naturally also represents part of the economic damage caused by leadership errors: "At the top of the list are the productivity reductions due to internal layoffs and the fluctuation costs due to terminations that are carried out. The Gallup study of 2013, for example, states that a total of 50 percent of German employees are affected:

25 percent each in terms of internal termination and 25 percent in terms of fluctuation. The trend is expected to continue to rise.

Fluctuation costs

From the Gallup study 2014 we learn that the economic costs due to internal termination amount to a sum between 98.5 and 118.4 billion euros annually. The fluctuation costs are in the same order of magnitude. The consequential damage to the social security system, and especially to the health insurance system, caused by the enormous increase in mental and psychosomatic illnesses among employees at the workplace has also recently been published in Switzerland.

Under the title "Psychosocial risks - an accident risk?", the STAS 2014 (see also www. ekas.ch) addressed the senior management of companies, occupational safety and health stakeholders, and employer and employee organisations. Since 2000, mental illness among employees has almost doubled. Dr. Hinz: "The economic costs amount to billions of euros per year."

Corresponding figures are also available for Austria: The Wiener Zeitung of 11 July 2013 puts the economic damage caused by mental illness in the workplace at 10 billion euros in Austria in 2012, compared to 4.8 billion euros in 2007. Thus, there is a strong upward trend not only in Germany and Austria, but also in Switzerland.

Every year, management errors cause damage of around 400 billion euros in companies and organizations due to unsuccessfully implemented projects.

Dr. Hinz: "Based on the available figures, we have to assume that the economic consequential damage caused by management errors in the category 'mental illness at work' amounts to billions of euros per year in Switzerland - and continues to increase." In fact, the costs for the Swiss health care system are increasing from year to year. 67 982 million Swiss francs (bfs Statistik, 2012) was the last official total.

"This position is currently not allocated according to causation, but is charged to the contributors to the social systems. Should this fact become known to the contributors, one will probably have to expect considerable public discussions here." But that is not enough. Because per year management errors cause further damages by not successfully converted projects in the enterprises and organizations at a value of approximately 400 billion euro , estimate Dr. Hinz. Dr. Hinz' résumé: "If we consider the total economic and business damage caused by management errors, we are talking about an amount in the three-digit billion range for Switzerland per year. By way of comparison, this amount would have to be one third higher than Switzerland's federal budget. A problem of such significance cannot continue to be ignored, or at least suppressed. It is time to address the issue of leadership failures and their consequential damage."