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Effective Leadership for Your Business

Effective leadership is a must for any organisation to survive, however a large number of start-up businesses are not prepared for this role. For effective leadership to exist, managers and leaders must co-exist if a business is going to enjoy ongoing success.

James Michael, director of Leadership in Action explains how start-up businesses can have effective leadership with his training.

From innovator to entrepreneur to marketer and employer, and then, inexorably, to manager and leader. What a journey! And for many small to medium enterprises (SMEs), it’s a journey they aren’t necessarily fully prepared or trained for. What began for many as a good idea possibly kicking off in the garage or the spare bedroom, eventually becomes a living breathing organism (called ‘a business’) with as many demands as raising children.

Over the decade or so that I’ve been working with them, for many SMEs this ‘leadership thing’ can be a challenge. Where, in the early days, you may have been able to rely on yourself, once the business gets to a certain critical mass, sustained success means relying on others—the things that need to be done on a daily basis can no longer be handled by you alone. And so you have a new body of knowledge, skills and behaviours you have to be able to use, around securing results with and through others. And that of course means trusting and delegating: letting go.

The typical small or medium businessowner is often spurred into action as a subject-matter-expert; somebody that either had a stroke of creative genius around a new product or service, or somebody that was already in the area of expertise—probably as somebody else’s employee—and decided they could do it better in some way. Often as not passion, enthusiasm and dedication are the key ingredients in getting a new business to gather momentum. So now, when we fast-forward and there are four, 12, perhaps even 30 or more employees working around you, it’s easy to see that those early passions—even the business acumen you’ve picked up along the way—may not be enough. So what do you need to know?

The truth is, an article like this will never do the subject justice—I’ve been a student (and subsequently teacher) on the subjects of leadership and management for over twenty years and I wouldn’t lay claim to possessing all of the knowledge on the subject. But let’s start here: engage, enable, empower.

Most managers we meet with share a desire to foster a ‘high-performance’ culture within their businesses. A good number however are not entirely sure how. For in excess of tweny years It have been largely preoccupied with just how high-performing teams/organisations/cultures come to be—and endure. Over the last half-decade, we have surveyed thousands of employees working with dozens of client organisations using an online benchmarking tool. In almost every situation where the ‘culture’ results were sub-optimal there was a corresponding low to be found in the specific driver of ‘leadership style and behaviour’—the five-year average currently sits at only 53 percent effectiveness. Post-survey focus workshops conducted with hundreds of employees, across all business functions, revealed that many ‘managers’ were seen to be either a significant cause of poor overall culture scores, or, were failing to adequately address cultural issues within their teams or organisations.

The good news though has been that we have also discerned that the consistent theme found in every high-performing team is the fostering of what we have come to describe as a ‘culture of leadership’—where team-members are ‘self-actualising’, performing consistent ‘acts of leadership’ to the benefit of all stakeholders, without waiting to be instructed by management. For Australians to consistently operate at the high-performance end of the bell-curve and demonstrate a ‘culture of leadership’, our experience and research reveal that they need to be firstly engaged, next enabled and subsequently empowered. We call this ‘E To The Power of Three’ or, E3.


Engaging is focused on the need to first ‘win the hearts and minds’ of each member of the team—engaging them fully in the pursuits of the organisation, overcoming resistance to change and the natural cynicism which forms a deeply ingrained part of the Australian cultural psyche. This entails:

  • knowing and explaining ‘the situation’ which dictates the business’ current focus—giving them a clear sense of ‘why’;
  • creating ‘purposeful’ organisational objectives which respond to the ‘situation’—the ‘what’;
  • developing sound strategies and plans which give employees confidence—the ‘how’;
  • appropriately allocating initiatives, tasks and resources in alignment with all of the above;
  • acting with authenticity and competence;
  • creating a sense of worth for all members of the team; and ultimately
  • engendering a sense of purpose, confidence and action.


Enabling activities focus on developing the ‘environment’ in which operational excellence is attained. Specifically this requires:

  • personally pursuing excellence and encouraging your employees to do so;
  • maintaining a constructive workplace dynamic;
  • fostering teamwork and cooperation;
  • sharing information appropriately;
  • securing equipment and resources;
  • optimising policies, procedures and structure to give the team maximum agility;
  • facilitating collaboration between departments/teams, suppliers and customers; and
  • developing the professional capability of each individual within the team.


Empowerment in this context further focuses on enhancing the ‘environment’ in which operational excellence is enabled. It is also where a ‘culture of leadership’ is ultimately catalysed. Specifically this requires a focus on:

  • catalysing the full potential of each employee, each ‘situation’ and opportunity and ultimately the organisation;
  • encouraging ‘response-ability’ in our people, where they routinely look for opportunities and/or issues and respond appropriately to them rather than waiting for permission or, worse, ignoring them;
  • reinforcing performance standards and understanding that each employee’s performance is an outcome of what you are prepared to settle for;
  • driving continuous improvement—in both employee capability and in the processes you use in your business;
  • making sound and timely critical decisions; and navigating change.

In the last six months we have been measuring the levels of E3 which exist in businesses around Australia and New Zealand, using our E3 ‘Culture of Leadership’ Profile. The likelihood of employees ‘committing autonomous acts of leadership’ currently averages only 71 percent, with some organisations reporting scores in the 50 percentile band. Weh also measure how effectively leaders/managers perform the 22 competencies described above, through our online 360-degree feedback tool and the current average scores are 63 percent for engaging, 69 percent for enabling and 73 percent for empowering. Notably the consistently lowest factor is ‘Developing the professional capability of each individual within the team’, which currently sits at an average of only 51 percent. Sadly, it seems many managers believe it is somebody else’s responsibility to develop their people’s capabilities.

In Mind of a Manager, Soul of a Leader, author Craig Hickman poses the question: “What do we need more of today? Managers, or Leaders?” It’s not until around chapter 10 that he reveals that this was a trick question, because the truth is, the answer is ‘Yes’. We need both. Managing and leading are critical roles with distinct competencies that must coexist if any business is to enjoy ongoing success. In our leadership development programs we describe leadership as a series of considered actions and behaviours, an individual employs, in order to assist the organisation, through its people, to move to a place beyond where it is now; to catalyse and realise the full potential of the organisation and its people.

Management is described as a series of considered processes and methodologies, an individual deploys within an organisation, in order to ensure certainty, stability, order and continuity for the organisation.
Perhaps in simpler terms, we believe that management is the science of dealing with what is and leadership is about the art of ‘catalysing’ what can be. As was once described, ‘We manage things and we lead people.’
In either case, it is important to accept that both management and leadership are verbs not nouns and they are something we do for our people not to them.

In our experience we find business owners/operators tend to fall naturally into one or other ‘camp’. Some are natural visionaries and have the ability to catalyse people cand ircumstances—leaders. Others have a preference for organising and managing execution—managers. Businesses need both, so owner/operators must ensure they broaden their own skill sets, and/or hire people who are able to bring the necessary experience to the business.

Leadership and Management Development Programs

At some stage or other most business owners or managers will consider undertaking some form of leadership or management development program. The choices are overwhelming. We would suggest there are several factors that are important in considering which program to enrol in:

Does the theory translate into action? There are many courses available which will provide a deep and rich education… yet the key purpose of this has to be the implementation of the learnings. What process does the program use to ensure you receive return-on-investment and that you gain more than just a pretty certificate?

Whether it’s a training program, post-graduate program or a coaching process—what experience does the ‘teacher’ possess in implementing the subjects being ‘taught’? Theories and models can be compelling, but are they proven—and by the ‘teacher’?

Will the content be tailored for your circumstances? Your business, whilst possessing many similarities to businesses in general, will have degrees of uniqueness—any program of development ought to be able to take that into consideration.

Does the content take into consideration the Australian cultural norms? There are subtle yet noteworthy differences between the Aussie and other workplace cultures. In First XI: Winning Organisations in Australia, (by Cocks, Heap, Hubbard and Samuel) it was confirmed that Aussies do NOT respond positively to fanciful Vision and Mission Statements, ‘Big Hairy Audacious Goals’, ‘Breakthrough Ideas’, charismatic and evangelisitc leadership, focus on profits alone or internal competition—all of which are the hallmarks of many overseas origin leadership development programs.

Making an investment in any form of training is always fraught with the question of ‘Will I get a return and how will I measure that?’ And it’s a reasonable question. There are far too many so-called development programs which are little more than ‘events’. In simple terms, the objective of any leadership/development program ought to be increased leadership/management effectiveness and, in turn, increased productivity from employees as a result. Measuring the return on your investment, therefore, can be quite readily achieved by taking a before and after measure. This is generally done through the use of 360-degree assessments and organisational performance benchmarks. The key is to always understand what the ultimate outcome should be of undertaking the development and then discerning how to measure for that outcome.

If engaging a training or coaching organisation, it’s worth asking them to commit to delivering agreed key performance indicators (KPIs) and placing some of their remuneration at risk, based on the achievement of these. As an example, when my organisation worked with the senior executive team and management at Jaguar and Land Rover Australia, our KPIs were measured improvement in employee satisfaction; measured improvements in 13 of 22 ‘critical drivers’ in the ‘culture of leadership’ profile; measured improvement specifically in the ‘teamwork and co-operation’ driver; measured improvement, using our 360-degree tool, in each participant’s leadership effectiveness; and attaining specific ‘project satisfaction’ scores from the senior executive team. (Specific scores were required to be achieved for each KPI, not shown here).

So, can leadership or management development be conducted internally? Sometimes. The fact is, these subjects are deep and complex, and not everybody can master the art of assessment, training and coaching. We work with a number of larger organisations where an HR person who has the capacity to deliver some of the content required is utilised. In our experience though, SMEs don’t have the resources to dedicate to such an enormous task and will inevitably need to engage some sort of external resource to assist—even if it is to ‘write’ a leadership program to be implemented internally.

In their myth-shattering report, ‘Retaining Talent: A Benchmarking Study’, Development Dimensions International’s Bernthal and Wellins identified that a staggering 78 percent of respondents had left their last employer as a result of a ‘disconnection’ with their immediate supervisor! In today’s ‘skills-short’ environment, stepping up and becoming a more effective leader and manager has never been as important.

James Michael is founding director of training company Leadersp in Action (www.leadershipinaction.net.au)

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James Michael

James Michael

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