Loyalty or Competence: Which is more important for organizations?

For most of the organizations – especially family-run and entrepreneur-led organizations, there is always a dilemma: loyalty or competence? Both are important qualities for organizations, and given a choice every business owner and leader like to have teams with both these qualities.

In case of a practical scenario where both qualities are NOT prevalent together, the question arises: which is more important – loyalty or competence?

Of course, the answer can vary depending on the specific context and goals of the organization. However, we have seen that loyalty is often valued more because it fosters a sense of commitment and dedication among employees. When employees are loyal to an organization, they are more likely to go above and beyond their basic job responsibilities and act in the best interest of the organization. But we have also seen that loyalty is more often towards the leaders or promoter, not so much towards the organization. Leaders prefer to retain loyal employees because they can trust them better and their operating style matches. It works well in most cases in speedy execution. The challenge is when loyalty is preferred at the cost of competence.

Competence is crucial for the success and growth of an organization. Competent employees can contribute to innovation, problem-solving, and achieving organizational goals. Competence can also instill confidence in stakeholders, such as clients, customers, and investors.

What if the organization is majorly loyalty-driven and less focused on competence? The organization’s growth will be stunted and the business will soon lose its competitive edge. Also, leaders and promoters will never get to test their ideas because loyal employees will never challenge them.

Ultimately, striking a balance between loyalty and competence is ideal for organizations. While loyalty can create a strong foundation of trust and collaboration, competence ensures that work is done efficiently and effectively. Organizations should strive to cultivate a culture that values both; which means leaders need to insist on upgrading the competence and invest in developing the loyal employees. It is a win-win formula that helps loyal employees and growing organization!

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