The Leadership Relationship Audit

“It’s all about people. Focus on the people, because the people
are what drive the process. And then the process and the product take care of themselves.”

— David Yeaman  |  Snippets with Leon Goren [listen to episode here]

 

It’s a strong line that says a lot.

Over the past several months, from my time in Nashville to my Snippets conversations, peer advisory sessions, and one-on-one discussions with CEOs across Canada, I’ve been paying close attention to where leadership friction is showing up. What I’m learning is that the greatest friction in leadership right now isn’t in strategy, AI, or even growth. It’s in relationships.

It keeps bringing me back to the same truth: the quality of your leadership is often constrained by the quality of the relationships you’re not paying enough attention to.

It sounds simple but it isn’t.

Leadership has never moved faster than it does today. AI is accelerating decisions, markets are less predictable, teams want more transparency, more meaning, and more humanity, and geopolitical shifts are changing assumptions that felt stable only months ago. Most leaders I know are spending their time reacting, solving, deciding, and moving, but not enough are stepping back to examine the human relationships shaping everything.

In one of our peer sessions recently, a CEO said something that really resonated with the room:

“I’m not struggling with the business right now. I’m struggling with two relationships inside it, and they’re consuming more energy than everything else combined.”

I’ve heard versions of this same sentiment before. Most leadership friction isn’t found on the balance sheet. It’s found in the conversations we’re avoiding.

Gallup’s 2024 research found that only 31% of U.S. employees are engaged, the lowest level in a decade, costing an estimated $2 trillion in lost productivity. The primary driver was a drop in manager engagement and the quality of the leader-team relationship.

Before we talk about unleashing human advantage, we need to ask a harder question: where is human friction limiting it?

That starts with a relationship audit.

1. Your Leadership Team

This is where most of the signal lives.

Who on your team is thriving under your leadership? Who is surviving? Who has outgrown their seat, and whose seat has outgrown them? Where are you tolerating misalignment because the conversation feels harder than the problem itself?

Many leadership issues aren’t strategic. They’re relational. They show up in unspoken expectations, unclear accountability, and avoided tension. What goes unspoken compounds, and over time those small fractures become much bigger leadership problems.

Gallup research shows that 70% of the variance in team engagement is directly attributable to the manager, which means the most important relationships you manage are not with your board or your biggest client, but with the people who report directly to you.

A question worth sitting with: What conversation with someone on my team have I been delaying that would make a real difference?

2. Your Key External Relationships

Every business has a handful of external relationships carrying disproportionate weight – top clients, a strategic partner, an investor, a supplier. These relationships are treated as “business as usual” until something goes wrong, and then they become impossible to ignore.

Which of these relationships are you underinvesting in right now? Where has trust eroded, even subtly? Where have you become overly dependent?

Too often we focus on the transaction and neglect the relationship underneath it. But in uncertain times, relationships become strategic assets or strategic liabilities. The leaders who navigate turbulence best aren’t always the most analytically sophisticated. More often, they are the ones who have built deeper relational capital over time, long before they needed it.

In difficult markets, trust becomes a form of speed. Decisions move faster, partnerships hold longer, and problems surface earlier. That’s the hidden return on strong external relationships.

3. Your Truth-Tellers

This may be the most overlooked relationship in leadership.

Who can tell you the truth without consequence? Not the polished version, but the real version. Who challenges your assumptions, calls out your blind spots, and tells you when your pace is outstripping your clarity?

Leadership can become dangerously isolating, especially as success increases. Harvard Business Review has long examined how senior leaders drift into echo chambers, surrounded by people who think like them, agree with them, and protect them from the very friction they need most. Leadership development research firm Zenger Folkman found that as leaders rise, they hear the truth less and less often, not because the truth is hidden, but because fewer people are willing to offer it.

In an AI-driven world where answers can be generated in seconds, the value of human challenge only grows. Judgment really matters, and judgment sharpens through friction.

4. Your Relationship With Yourself

This is the one talked about the least, and the one that matters most.

How are you, not operationally, but personally? Where are you leading from clarity, and where are you leading from fatigue, ego, fear, or habit? What pressures have you normalized that may no longer be serving you?

Earlier this year, I spent time at Isha Foundation with Sadhguru exploring a question I think many leaders avoid: what inner state are you leading from?

Research from Harvard Business School found that individuals who spent just fifteen minutes at the end of the day reflecting on what they learned improved performance significantly over time. Not because reflection is a luxury, but because learning compounds when we create space for it.

Leadership isn’t just about how you manage others. It’s also about how you manage your own internal world, especially under pressure. In many ways that is the ultimate human advantage.

The Journey Ahead

This fall, we’ll continue this journey at our Annual Conference, Unleashing the Human Advantage.

As I prepare for the conference, I keep returning to one belief: the leaders who will navigate what’s next best won’t be the fastest or the most technologically advanced. They’ll be the ones willing to do the deeper human work, to repair what’s strained, strengthen what matters, and confront what’s being avoided.

The future may belong to those who move fastest, but it will be sustained by those who understand people best.

So I’ll leave you with this question: Who in your relationship audit needs your attention most right now?

Because in leadership, the conversation you’re avoiding is usually the one that matters most.

— Leon Goren, CEO, PEO Leadership | Innovators Alliance