Lead to succeed

by 30 Sep 2008

Human Resources magazine constantly strives to bring its readers the best information in the world of people management and business. As such, Human Resources is introducing this new column, CEO Speak, to keep readers up-to-date on business issues from a CEOs perspective. Each month, the CEO Institute will look issues affecting CEOs and examine how HR can contribute to potential solutions

Autocratic leaders are the has-beens of modern organisations. But how should a democratic business work and be led?

Today’s confident, options-savvy workers won’t put up with autocratic leaders. They want to feel engaged, heard and as though they are making a difference. They want industrial democracy.

We have learned that productivity and worker satisfaction levels increase dramatically when leaders lead with emotional intelligence. But what does this mean in practise?

Good leaders reflect on themselves, refine how they work with others and use their personality effectively. They listen more than they talk. Great leaders know their staff and understand what makes them tick.

Adversity always sorts the leaders from the pack. Blaming others, throwing tantrums and sulking are the traits of corporate dictators. Democratic leaders –such as Winston Churchill during WWII – are realistic, motivational and optimistic. Honesty and optimism underwrite any leader’s capacity to inspire confidence and buy-in from staff.

Autocrats like to set their flunkies against each other (it keeps them from eyeing the top job and always leaves someone else to blame for failure). Callum Davidson – CEO of Medfin Australia and a member of The CEO Institute – tells a story about working in a financial markets dealing room 10 years ago where staff in different business units were pitted against each other.

Callum says that staff members were more worried about doing better than the next business unit and comparing their budgets than working together to look after clients. “It was just counter-productive. The clients weren’t being serviced properly and the staff were unhappy.”

As Medfin Australia CEO, Callum has a very different way of getting people working together productively. He says: “We used to have a huge divide between sales and support people. Salespeople were paid commissions while support staff (who were instrumental in generating the commission) missed out.”

Callum introduced a commission pool, which everyone shares. “Initially there was some push-back from sales. Getting the change through wasn’t easy. But nobody is worse off because salespeople are getting more out of the support staff who, in turn, are much more invested in helping salespeople. If you do it right you get a win-win situation.”

Bob Johnson, a CEO Institute syndicate chairman, says that HR departments can add value by being the catalysts for bringing information out into the open. “CEOs can’t respond to all issues. Good HR people can use their creativity to constantly seek out information artfully without interrupting the productive process too much.”

Bob notes a semantic difference in two ways of asking employees for their opinion. Asking “How do you feel about this?” invites a binary answer (good or bad); asking “What is important to you?” is subtle, inclusive and empowering.

Some bosses have always known how to treat staff well. As a young man, Bob worked at a business in New York that had an unusually harmonious working environment. He says: “Staff weren’t paid much and there was absolutely nothing glamorous about the workplace. There were certainly no perks such as complimentary gym memberships. But staff turnover was extremely low and the company never had to advertise for staff.” So what were they doing right?

The secret, according to Bob, was that management were tuned in to what was really important to the workers. Staff worked a four-day week and all religious and public holidays were observed, which meant employees had a lot more time off than most workers. There was an unwritten rule that if anybody was caught short financially, the owner would put his hand into his own pocket to help them through. In other words, management showed genuine concern for the workers.

Nobody is suggesting that all leaders should rescue their employees from every self-inflicted debt they run up. But at that company the boss created a culture of loyalty, trust and respect which produced a happy, productive workforce. What are you doing for yours?

By Ken Gunn, Chairman and CEO, The CEO Institute. Email: institute@ceo.com.au. Web: www.ceo.com.au.