This year I’ve been vocal on why leadership is failing in Australia. In my recent interview with Dynamic Business, I drew a sharp contrast between fields of elite performance (such as sports, chess, science, music and the performing arts) and the mediocrity of business leadership.
My thesis was a simple one. In these elite fields, performance standards are continually lifted by measures such as:
- Deep, precise understanding of what excellence looks like;
- An investment of time in developing expertise that reflects the importance of that expertise to superior performance;
- Very high quality learning methods, built on empirical data and decades of improved insight into the drivers of superior performance; and
- An intolerance for mediocrity.
When we look across elite fields, we see these practices in abundance. From the New York Philharmonic to Nobel Prize winners, as well as sporting greats, from Michael Phelps to rugby’s All Blacks, the level of investment and the quality of capability development methods are responsible for the mastery that we witness.
Our average is well below average
In contrast, the average approach to improving the quality of business leadership in Australia looks more like the following:
- Patchy, inconsistent and vague identification of what constitutes excellent leadership;
- Miniscule investment, in terms of both money and more importantly time, in building excellence (as a percentage of a working year of a leader, the genuine capability development time is so minimal as to be meaningless);
- Utterly unscientific development methods, underpinned by sporadic, biased feedback (or none at all) provided on unrealistic situations by persons poorly equipped to do so; and
- Widespread tolerance for, and acceptance, of mediocrity.
This may sound damning and it is meant to. There is no driver of business performance that even comes close to the power of effective leadership. Nobody would genuinely doubt that the likes of Apple or Virgin would have done just as well with mediocre leaders rather than great ones, any more than we doubt the role of captain of a sporting team or the conductor of an orchestra in their performance. We know for a fact that leadership makes the difference. But the superficial or slapdash approach of most Australian businesses to improving their most powerful driver of superior performance makes hypocrites of them.
Not all companies are average
In my recent interview, my critique was of the average company. Compared to ‘average’ professional athletes, chess grandmasters or classical musicians, the standards of Australian businesses are ‘below average’ when it comes to developing leadership skills.
I’ve been asked by many people since that article: “So, who can we look to?”
Below are some organisations that are demonstrating the commitment to excellence I am describing. While I’m sure none of them are perfect (we can find flaws in every company if we wish to look), they show an approach to developing human potential that is a good deal closer to that shown in elite fields outside business. And in every case, the results bear out the value of the methods.
Take, for example, the Australian software company Atlassian. They have managed to become a multi-billion dollar NASDAQ-listed corporation, after being set up by two young entrepreneurs in 2001. This has been no fluke. Indeed, they have had few natural advantages – no massive balance sheet, no Silicon Valley HQ, etc. However, study of their culture shows how influential leadership has been in their success. Take this quote from founder Scott Farquhar: “From the beginning our goal was to build a long-term company. We want to build a company that will stand the test of time. That’s why we spend a lot of time on company culture.” In many ways, this company defies the stereotype of poor people skills in high-tech companies and makes important decisions about how managers interact with staff and develop their potential.
Another example is that of KPMG, one of the ‘Big 4’ CA firms. I recently had the pleasure of hearing the National Head of Advisory, John Somerville, explain the steps they have taken to elevate the quality of leadership. The firm shows its commitment to improving leadership in everything from the year-long selection and development process for partners to the intensive multi-modal management training that they provide all of their Performance Development Managers (anyone who has people reporting). It’s no coincidence that their financial results have been improving every year and that their business has become more entrepreneurial (take for example, their Innovation Labs).
I’d also like to call out the NSW Government and their recently launched Leadership Academy, strongly supported by the Premier. In a time where governments are often expected by the public to create better long-term futures for citizens while taking a short term approach to reducing costs, the Academy is notable for its dedication to scientific and meritocratic approaches to defining leadership, identifying emerging talent and providing accelerated development. The impact of this, and related initiatives, has been palpable – the culture of this entity (Australia’s largest employer) is improving and it is increasing attracting some of the best leaders from outside government to join.
Finally, the Australian arm of Bayer is another standout. Just last month, they won a prestigious global award for culture change. They’ve built more innovative leadership as a top priority and this has translated into everything from a more engaged workforce, to high client satisfaction and stronger top-line growth.
Where to from here?
There are many more I could mention but my point is simply that, despite the widespread leadership malaise, it is possible to do better and there are organisations that serve as the proof. Importantly, these organisations are also achieving better business results as a consequence of their methods.
My advice to other corporations is to consider whether the investment (as much in terms of time, science, communication and dedication as in money) they are making in better leadership is good enough, given its profound medium-to-long term impact on business performance. If you’re not, and your competitor is, I know which one I’d prefer to have shares in or to work for.
About the author
Anthony Mitchell, is a director and co-founder of strategic advisory firm Bendelta.