Feature Consulting Matters
21
Leadership Matters: very much WHETHER IT’S THE LEADERS OF A COUNTRY, BUSINESS, SPORTING CLUB OR TEAM OR ANY OTHER TYPE OF ORGANISATION, THOSE RELATIVELY FEW ‘SENIOR’ PEOPLE WHO ARE AUTHORISED TO SET STRATEGY, ALLOCATE RESOURCES, AND WHO SIGNIFICANTLY INFLUENCE CULTURE, SUSTAINABILITY POLICIES AND A RANGE OF OTHER THINGS CLEARLY DO MAKE A HUGE DIFFERENCE TO OUTCOMES.
No matter the industry, the most important factor that underpins other causal factors of performance is regularly shown to be the quality of leadership. For consulting (engineering) businesses, readers will be able to trace the rise and fall of businesses and relate these to the leadership effectiveness of those businesses. Its everywhere: GE prospered for nearly twenty years under the leadership of Jack Welch, and has not been the same since then. In my new book, co-authored with business leader Don Argus, we examine evidence of just how and why NAB greatly outperformed the market for a decade (1990-2000), then abruptly fell to the back of the pack, and the only standout explanatory factor was the quality of senior executive leadership. It is the senior executives who set the standards and role model required behaviours on other key success factors such as customer focus, service levels, respect for all staff and stakeholders, and process quality and integrity, which have been shown by rigorous research to be other main factors of business success. BHP fared oppositely to NAB, from floundering in the 1980’s and 90’s to firmly implementing a new strategy in the new century of long term, low cost, high quality resources, exiting the complex and difficult steel industry, and contributing very greatly to Australia’s prosperity since then. The key changes within BHP all stemmed from changes to leadership, that led to changes in strategy, structure, governance, even leading to industry structure changes, for example the pricing of iron ore during the mining boom, that was greatly in BHP’s, and Australia’s, interests. A third Australian example of great corporate success through great leadership is CSL, that was transformed from a government agency into a global leader in its sector, with long term, consistent pursuit of technical, supply chain and marketing excellence underpinning its amazing journey of value creation for all its stakeholders. Overseas, we see a very similar relationship between leadership quality and business outcomes. Great leadership is the prime
reason that Toyota has consistently succeeded when others such as VW, GM, Nissan, Ford and Chrysler have faltered at various times. A succession of leaders at Toyota have promulgated the same set of core values for over 50 years. Those values are Respect for People and Continuous Improvement. In our research for our ‘Strategic Leadership’ book, and in the management development short-course I conduct for Consult Australia (linked here), we show and workshop how leadership qualities can be planned, developed and practised as a set of behaviours. These include: 1. E ffectively setting vision and strategy: deciding the longer term pathway for the organisation, and its value system 2. Building trust: with all stakeholders, especially employees and clients 3. P articipation: meaning being hands on and deeply involved in operational oversight, strategy setting, performance measurement, providing guidance and feedback. 4. L earning: we can never know all that we would like to, and the world changes almost every day, so driving the learning capability uptake, staying up with new technologies and market factors is a key attribute for senior leaders to undertake and demonstrate to others 5. Creating a winning attitude: based on the premise of positive psychology, this quality in leaders fosters motivation and discretionary work effort throughout. 6. E mbracing diversity: leaders can demonstrate their inclusivity for all people, of all diverse natures, that will link tightly to the universal principle of respect for everybody, that works so well. 7. Creativity: leaders who participate in finding creative ways to solve problems and pursue opportunities will set this in place as part of culture
8. Integrity: the standards, of ethical behaviour and integrity at both the individual level and in aggregate can be role modelled by leaders 9. C ommunity: leaders can ensure that their organisation is creating value for a range of stakeholders, and this includes being personally selfless in words and deeds While we should acknowledge that there might well be some degree of genetic predisposition within people, or at least that their upbringing has led them to be at certain stages of maturity on the above characteristics by the time they enter the workforce, they can clearly all be developed and practised, by anyone who wishes to be the best leader they can aspire to becoming!
‘Distributed’ leadership In my research involving studying the world’s best companies, it became apparent 30 years ago that leadership was not just what senior executives do, but was in place and paramount at all levels of excellent organisations. For example team leaders, project leaders, functional managers, and ultimately each of us is a leader in our own domain. In great organisations, this means being accountable and responsible for our actions and outcomes, and having the requisite decision making authority to achieve those ‘best outcomes’ at all levels. When the above characteristics and fully distributed and operating at all levels and in all corners of an organisation, the robustness and resilience created, as well as the productivity and service levels can be astoundingly impressive. Hence our goals should be twofold when it comes to leadership: first to make sure we have the right people with the maturity of characteristics operating in key strategic roles, and second to cascade those leadership qualities right throughout the business! Professor Danny Samson University of Melbourne Professor Danny Samson conducts shortcourses for Consult Australia, and he lectures and conducts research at the University of Melbourne. Comments welcome: d.samson@unimelb.edu.au
