What Is Your Leadership Overhead Rate?

by  Jon Mertz  |  Leadership Coaching


In almost every organization, there is a concept of overhead. provides a solid overview of overhead, but simply stated it is the “costs incurred to make something else possible.” This is a great definition, and it should be applied squarely on leadership.

Overhead costs on leadership should be low, meaning little burden on others. There are certain required overhead costs to leadership:

  • Mentoring
  • Coaching
  • Training
  • Setting direction
  • Listening
  • Communicating
  • Other enabling activities….

What kills a culture and team member spirits is a loaded overhead leader. The costs of a heavily burdened overhead leader can be very damaging. The costs to make something else happen, in bad leadership terms, are too high.

What are the characteristics of a high overhead leader?

At some point, we have experienced a high overhead leader. Some of our experiences may include the following.

A know it all. This is the leader who has all the right answers. One of two things happens. They pretend to listen while visibly showing their dissatisfaction with what is being said, or they interrupt while others are talking and take over the conversation. Yes, they are domineering. Yes, they are likely insecure, and they cover it up by exhibiting behaviors of a “know it all.”

Participation declines.

One way. Although related to the know-it-all, in this case, their way is the only way, and no dissent, advice, or other words are required. Even if a colleague or boss outlines a direction different from this type of leader, they will find a way to slip their way back into what really happens.

Distrust builds.

Bad processes and systems. Some leaders will keep bad processes and systems in place so they can maintain some type of control in how work is done. Making everyone suffer unproductively will give this leader satisfaction, knowing they can provide a better way… but won’t.

Frustration rises.

Unsupportive and ungiving. Leaders, who do not support their team members by doing the good overhead work, put their team members at a disadvantage. Without mentoring, growth has to be found elsewhere. Without direction, progress gets muddled. Support requires a giving leadership mindset, giving in a servant leadership way. Leaders who do not pass on insights and knowledge don’t really want others to rise up to take on more responsibility and accountability.

Morale declines.

In defining these types of high overhead leaders, there seems to be a similar thread. They are the type of leaders who need to be in high control at whatever the cost.

How do you know?

Leaders in this self-inflicted burdened position may be oblivious to it, but they probably have a suspicion. The unfortunate reality is the people around this type of leader all know. They know because the real burden is on them.

For the leader who is uncertain, if you recognize any of the following situations, then you may be a high overhead leader.

  • People avoid working with you.
  • People are rolling their eyes, visibly or not, when listening to you.
  • The only good idea is your idea. When was the last time you took someone’s idea and encouraged them to pursue it?
  • People spend time determining how to go around you rather than work with you.

There are others, but these deliver solid examples of what to look for.

What happens when leadership overhead rises?

Any leader knows the weight of a high overhead leader. It is an inverse relationship. The higher the leadership overhead, the lower the cultural health and organizational productivity. It is a line no one wants to cross, as it creates an environment that cannot survive.

Leadership Overhead Model

 The leader challenge.

Here is the call to action. For all leaders, what is your overhead cost? Are you at a tipping point of productivity decline, or are you at an inflection point of enhanced cultural health?

There are some required overhead leadership costs, as there is a cost to build people up to do great things. When the leadership costs grow oddly high, it is time to stop and determine why.

The problem is on the leader, especially when the focus turns to them and their ego rather than on what is best for the culture, customers, and team. It is about the character of a leader.

Leadership is about investing the right amount in people, enabling talented minds and abilities to make great things happen.

What type of leadership overhead costs would you add that drain an organization or build one up?

About The Author

Articles By jon-mertz
Jon Mertz is one of the Top 100 Thought Leaders in Trustworthy Business and author of Activate Leadership: Aspen Truths to Empower Millennial Leaders. At Thin Difference, Jon writes and facilitates a conversation on how to empower, challenge, and guide the next generation of leaders.  »  View Profile

What People Are Saying

Glen Gaugh  |  10 Sep 2012  |  Reply

Hey Jon- very thought-provoking post. The illustration of “leadership overhead” really puts perspective on the demands a leader makes of others- I want to trim back the fat I’m loading my team down with already, before I even start evaluating my overhead! Thanks for the post- I look forward to lots more!

Jon Mertz  |  11 Sep 2012  |  Reply

Thanks, Glen, for your comment and feedback. It is easy to load up our leadership overhead and lose sight of what we are really doing to our team and organization. This concept continues to run through my mind, so my post next month may continue in this theme. Thanks again! Jon

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