So, what do top performing leaders have in common? They’ve all received some form of mentoring throughout their careers to get them where they are today.
In fact, Harvard Business Review surveyed 45 CEOs who had formal mentoring in place, and found that ‘71% said they were certain that company performance had improved as a result. Strong majorities reported that they were making better decisions (69%) and more capably fulfilling stakeholder expectations (76%).
While it’s certainly not a new concept in the business world, but it can be lonely at the top and many leaders find it challenging to know how they’re performing – and what exactly they need to do to be more effective in their role.
As a business leader you have to frequently make decisions concerning matters that have never before been undertaken. In such high-stakes conditions, leaders require wise mentoring with apparent rules of engagement to ensure total confidentiality.
Finding the right mentor can sometimes be the difference between success and failure. By working with a mentor, leaders are able to benchmark how they’re performing as well as be held accountable from a wise role model, someone with genuine guidance based on true-life experiences.
Here’s how some of our top performing members benefited in key areas of their business from having a mentor:
Transitioning into the C-suite
There are a number of challenges involved in transitioning from a functional executive into the C-suite. By engaging with a mentor who has personally experienced such transitions, new leaders can gain access to perspectives that are uniquely contextualised and personalised. These ongoing relationships are often one of the most important when it comes to giving leaders the confidence to tackle new issues as they arise, particularly in areas that fall outside their core expertise and experience.
This is exactly why Director of Save Sight Institute and Professor of Ophthalmology at the University of Sydney Peter McCluskey, was drawn to seeking an experienced mentor.
‘I look after a lot of people, a lot of students and do a lot of administration, plus working as an eye doctor, a researcher and a teacher. Moving to this role was a big, big change and involved a lot of learning on the fly.’
‘TEC has really been a fabulous sounding board for helping me make sure I understand what the problems are that I was facing with personnel, strategy and implementation,’ Peter explained.
As someone who transitioned into a Director role from a research and teaching background, Peter wanted to ensure he had the right skill set, outlook and thought processes to successfully lead the institute, which is where mentoring made a measurable difference.
Building and retaining top talent
One of the many challenges affecting businesses regardless of the industry in which they operate is building and retaining top talent.
Managing Partner of Marsh & Partners Bronwyn Condon found that both external and internal mentoring is essential for retaining and developing employees throughout the firm.
‘We have a mentoring program within the firm where we ensure accounting graduates are getting to whatever level they need,’ Bronwyn explained. ‘Beyond that is when I get involved directly. That means ensuring they can move from an accountant to a manager role and eventually a partner.’
Bronwyn has experienced firsthand the impact of this talent strategy in action, with a number of different employees advancing their careers within the firm. ‘We’ve got a lot of people who have been here for 10, 12 years who have worked their way up to the manager level. They wouldn’t be here if we didn’t have a strong mentor process in place.’
Having the right mentor that understands the importance of a talent strategy is crucial to business success, and leaders who can implement this strategy will set the organisation up for future growth.
Mentoring extends across the C-suite
Traditionally, mentoring is viewed as a one-on-one connection. While this is a still a valuable way to pass on insight, there’s also merit in extending this connection and bringing it into a group situation. Spending time with a group of senior executives, who share similar experience, insights and challenges associated with their respective industries helps to broaden and develop leadership perspective.
That was certainly the case for WBP Property Group CEO, Greville Pabst. Greville believes that the group connection is one of the most important parts of his mentoring experience. By attending both his monthly one-on-one mentoring session and meeting with his peer network of senior executives, Greville is able to project his ideas and refocus.
‘Not only do I have an experienced business mentor, I also have sixteen or seventeen other CEOs that I can talk to,’ Greville said. ‘We can all speak in trust and with confidence and I just think that is a really understated resource that TEC brings to its members.’
Greville explained that a key component of his mentoring experiences is the ability to help keep him grounded, ensuring his ideas and aspirations remain realistic for the future. On top of this, the members’ diversity means that no two opinions are the same.
‘We keep each other very accountable, that’s for sure. We have a vast wealth of experience from all walks of life. It’s been a great learning experience for me’ Greville explained.
Mentoring remains a valuable and versatile method of enhancing business success and ensuring leaders have the confidence, skills and knowledge necessary to make key business decisions. When business leaders fail to seek outsider input for support, their companies can suffer.
But the brutal truth is, more than often, our messages are ignored and our perspectives – no matter how valuable — are being missed. Australians are bombarded with thousands of ads and calls-to-actions a day and the fact is: people are becoming desensitised by information overload.
Predatory Marketing is the answer to being heard above the noise. It’s a development that challenges any preconceptions we may hold about how organisations can expand their client base. To get a better understanding of how Predatory Marketing is helping companies, we sat down with 2015 TEC Speaker of the Year, Ashton Bishop, Head of Strategy at Step Change, to learn how his new tool is affecting the way companies communicate.
The new marketing reality
The way marketing is taught has followed a typical pattern for decades now – that it’s about meeting the needs of customers. But this is changing.
It’s no longer enough to assume that your target audience has needs that require fulfilling. The business world is advanced enough that most of your target audience is likely to be at least satisfied with the goods and services they already have access to. Today, the only predictable need that customers have is a need for less corporate ‘noise’ – communications that are overwhelming customers with too much information.
The challenge is now for business leaders to stop thinking about simply meeting customer needs and to target the weaknesses of their competition (more on this later). In other words, companies need to embrace Predatory Marketing.
Predator or prey?
Now that companies can no longer think solely about satisfying needs, they have to start asking, “Who has my money?” It’s a zero-sum game that businesses are operating in, and organisations now have to tailor their marketing practices to ensure they accommodate this new reality.
Failing to keep up with these changes will ultimately make it harder for companies to grow, especially as their competitors actively start trying to poach customers from their brand.
Cutting through the noise
In Australia, we spend roughly $13.3 billion on marketing per annum – translating into around a million branded messages that each of us see every year. That’s 3,000 every single day.
Of those 3,000, we will only notice 80 and react to 10. And of these 10, we instantly treat half as unwelcome intrusions into our lives – leaving only five messages a day we actually notice, react/respond positively to and absorb.
When crafting a message that can qualify as one of that handful, you also have to remember the five-ninths law. This law states that five-ninths of marketing messages will be misattributed to the leader of a market segment, rather than the company paying for the message.
For organisations that aren’t in this leadership position, they are essentially cementing the position of their leading competitor with their own marketing budget. Overcoming this gap, and crafting messages that actually move market share away from competitors is therefore key to building a successful Predatory Marketing campaign.
What does Predatory Marketing look like?
Whenever we work with clients who are looking to embrace Predatory Marketing, there are four key steps we advise them to take:
Step 1) Identify where the money would go if your company didn’t exist
Imagine your business didn’t exist – where would your customers’ money go? A competitor? Or would customers spend it on a completely different offering?
Asking these questions is the foundation of a competitor analysis. From just asking these questions, you’ll usually identify four or five competitor organisations that are offering a comparable product that your customers would gravitate towards.
From there, we are looking to narrow down the list to find a target. This means identifying a competitor that is very large or is perhaps a little lazy and isn’t meeting the needs of its customers. If you can find one of these, then you have the starting point of your Predatory Marketing campaign.
Step 2) What are the strengths of the opposition?
Now that you have a competitor lined up, you need to objectively evaluate their strengths. To do this, put yourself in the shoes of a customer or consider why a third-party would recommend them.
What you are looking at here is the natural language around what the company’s offering, rather than a slogan grounded in marketing jargon. When you can express in simple terms the strengths of your competitor, the next step is much easier: weaknesses.
Step 3) Find the weakness that comes from the opposition’s greatest strength
Within every strength is a hidden weakness. The challenge with Predatory Marketing is to find the specific weakness that arises from a particular strength and then explain it to the customers. The reality is that customers won’t necessarily notice this weakness by themselves, nor will they know that you can address this weakness – unless you tell them.
Step 4) Where are you strong?
The final step is to build your strengths to address this pain point and then convey this value to customers. You can be explicit here when communicating with prospective clients – acknowledge the strengths of a competitor before honing in on the weaknesses that your products and services can address.
Many business owners won’t have taken this step. They don’t to really understand where the value lies in their own product offering and how these match the weaknesses of their competitors.
Tailoring a Predatory approach to the market
These four steps represent the core of a Predatory Marketing campaign, but it’s also important, to tailor this offering to the specific market conditions that a firm is operating in.
For example, a firm that already occupies the dominant position within its sector usually shouldn’t be applying a Predatory Marketing approach towards its direct competitors. Instead, it’s generally smart to be using these same tactics to grow the market and bring customers into their category.
Challengers who aren’t in that dominant position will instead be looking for the competitor or class of competitor that is currently occupying that dominant position. In a very fragmented market, or one that is very generic or confused, it may even be that would be competitors are best to band together to shift a certain audience mindset.
Regardless of whether the target of a Predatory Marketing campaign is a single business, a group of businesses or potential customers, the process is relatively consistent.
Lastly, a Predatory Marketing campaign has to change with your business and with the market. Just as context is key to a great strategy, so too is it central to a Predatory Marketing campaign. If a Predatory Marketing campaign is so successful that a company has become the dominant force in their category, for example, the techniques that got them there may no longer be relevant.
It’s time to get Predatory
Customers don’t have needs anymore; their needs have been filled. We need to arm ourselves with new tactics that can help us rise above the noise of our competitors and ensure that our message is the one being heard. Predatory marketing is the best tool to disarm your competitors and will ensure your company is in a position of strength and ultimately boost your profits.
Apply Ashton Bishop’s Predatory Marketing to your business and ensure you are always ahead of your competitors and in your customers’ minds. Take action today and subscribe to Step Change’s blog to keep up with all the latest thinking around marketing, strategy, tactics and business insights. If you have any questions surrounding your own business strategy and how you can best incorporate Predatory Marketing, you can send them your enquiry here.
By TEC Chair, Dawn Russell
As a key executive in an organisation, you want to make your mark. You want to contribute significantly to the overall mission and growth of the organisation and earn the respect of the CEO or Managing Director, as well as the respect of the people who report to you.
Chances are you’ll be shouldering considerable responsibility and making decisions that affect the future of the organisation and the lives of the people who work with you. And, as with any leadership position, there are always challenges. The thing is, you can’t go running to the CEO every time there’s an issue. To start with, they’re more than busy enough without having to weigh into your issues; and secondly, what aspiring leader wants to be seen as incapable of handling situations that leaders face every day?
Perhaps you have a prickly staff member whose performance has dropped significantly over the last six months and you need to tackle an honest conversation with them. Perhaps you have a progressive idea for meeting your sales target, but want to test its robustness before you pitch it higher up. Perhaps one of your peers is making it difficult for your team to deliver to the expected standard and you need to “call” their behaviour. Or perhaps there’s a new process that is impacting negatively on your department, but challenging it is politically sensitive because its owner has the ear of the CEO.
Whatever the issue, you need a sounding board. As an influential CEO once said to me, “The worst decision I ever made was the one made by a committee of one – me!”
You need someone (or several someones) who will challenge your thinking and play Devil’s Advocate to help you see things from a different perspective. You need to tap into others’ experience when you’re faced with a situation you’ve never encountered before. It makes sense to call on the wisdom of others. The trouble is, whose wisdom do you call on?
You may decide to talk it through with your significant other or a family member. They may or may not have the necessary business acumen, but two things are for sure: they want you to succeed and they don’t want you to get hurt. But the trouble is, they have a natural bias. And because they love you, frequently they won’t tell you it the way it really is. They don’t want to hurt you; they don’t want to hurt your feelings. As a result, they’re not likely to really challenge your thinking or look for the flaws in your argument.
Alternately, you may feel safe enough bouncing ideas around with your colleagues…until the day something confidential finds it way into the greater populace at work, or until your idea is served up to the CEO by someone else as their own. And what will they think of you if you keep going to them for advice?
You may chat to your friends and mates outside of work about it, but do they really understand your role, your industry, your politics or the particular sensitivity of the issue? Besides, you won’t be considered such good company if they have to listen to you talking about work all the time!
Being in a leadership position is a challenge and it can be isolating. It’s also very easy to miss opportunities or reap a sub-optimal result when decisions are made by that “committee of one”. We are often best served by bouncing ideas around with others, but when you can’t go to the CEO, where do you go?
By TEC Member Anne Moore, CEO at PlanDo
The Prime Minister might have just announced plans for more people to come to Australia under entrepreneur visas, as part of his ‘Innovation Statement’ but that isn’t going to help the majority of HR professionals looking to hire and engage their best talent next year.
The reality is that if you thought 2015 was tough keeping the energy and attention of your best talent, it’s going to get tougher in 2016. Many companies talk about the benefits they offer their employees, the perks, the flexibility and the competitive remuneration packages, but providing individuals with a clear career path and enabling them fulfill their career goals, aligned to your own, needs to be high, if not top on the list.
For too long the systems and processes that HR professionals use reflect the organisation’s goals, not the individual’s. They present HR professionals with a huge administrative burden and don’t reflect the changing nature of the work environment. How many businesses do you know make decisions on an annual basis anymore? Indeed, HR professionals may be hiring for a role today, but that role could be completely different in a few months’ time.
Together with the changing work environment, the casualisation of labour, the increase in contractors rather than employees and the millennial mindset of wanting to work in a number of different organisations rather than sticking with one over the long-term, HR professionals need new tools to retain talent in 2016.
I’m not talking ‘retention’ here, we’re going far further upstream. We think the magic happens with how we enable autonomy and the impact of great performance and engagement.
If you want to engage your top performers next year, you need to consider the following:
1. How often do you or your leaders ‘check-in’ with your team members?
Instead of having to make team members wait for 12 months for their review, smart organisations will provide more feedback more often. This feedback shouldn’t just come from ‘managers’ or ‘leaders’ as they should be known, it should be from more than one person – peers, mentors whomever the individual chooses. That way, a more complete picture can be built of the individual’s progress and a different perspective can be provided. Recent research shows that peer feedback is particularly effective in motivating team members to consistently perform at their best.
2. Are the individuals that work for your organisation self-directed?
Has your organisation given your team members an opportunity to talk about their career goals and what they want to do? It’s important for your leaders to set goals and objectives together with individuals. Ask them how they can contribute to achieve the goals your organisation has set. Again, it comes down to ownership and accountability, and if the individual has suggested a goal or objective, they’re much more likely to achieve it, than if they’re given one. The new world of work demands a responsiveness and agile that’s internally derived.
3. Does your performance review process need an overhaul?
Is it too long? Too cumbersome? A box ticking exercise? Some organisations such as Accenture and Deloitte are scrapping them altogether. There are cloud based career management systems available, such as PlanDo that are more intuitive, less expensive and really help HR professionals retain their key talent. It’s about HR professionals and leaders across the business having access to the right tools for the changing work environment.
4. Are you having quality career conversations?
Ask yourself if the tools you’re using today encourage quality conversations between ‘leaders’ and ‘individuals’ in your organisation. Standard performance systems encourage managers to only talk to their people about growth once or twice a year. Most organisations in Australia have invested in expensive outdated ‘talent management’ systems that reflect what the organisation wants from its employees, to ‘manage’ them. Today, this approach simply doesn’t work. ‘Talent’ can’t be managed. With a younger generation of workers coming through, they want to take control of their own career and not have an organisation dictate to them the path they need to take to progress. Managers are rapidly evolving into leader coaches and as such, they’ll also be wanting easy access to simple and effective tools that facilitate great conversations.
Finally, helping your team members with their career progression is not all down to you. Competition is fierce in many industries in Australia to attract the best talent and then once you have those individuals, it’s a common misconception that it’s down to HR professionals to nurture individuals and outline a path for progression. Wrong. Today, this is a shared responsibility. It’s about co-careering which means aligned values, purpose and goals. Building strengths, skills and ensuring there’s a great ‘fit’ is was matters more and more. At the end of the day, the individual is responsible for their own career, ensuring their experience and skills are documented and taken with them to their next employer.
By TEC Member Anne Moore, CEO at PlanDo
A radical change to business structures is leaking out of Silicon Valley and spreading through Australia and beyond. It even has a name: holacracy. Atlassian has scrapped its managers and so have Canva.
The tenets of holacracy are simple: authority and decision-making rests with the team that is actually doing the work, not with the boss. Employees, the theory goes, spend their work hours getting work done instead of seeking management approval for every small change in direction.
But before you scrap your managers, consider the following instead:
1. Find a career management platform that works for both the individual and the business
The traditional performance review process is broken. Most organisations in Australia have invested in expensive outdated ‘talent management’ systems that reflect what the organisation wants from its employees, to ‘manage’ them. Today, this approach simply doesn’t work. ‘Talent’ can’t be managed. The role an individual was hired to do six months ago, isn’t necessarily the role that person is doing today. With a younger generation of workers coming through, they want to take control of their own career and not have an organisation dictate to them the path they need to take to progress. Cloud based platforms such as PlanDo enable both the individual and organisation to have an ‘adult to adult’ conversation about career development, giving more control to the individual while still providing the ‘manager’ or ‘leader’ with greater visibility of the individual’s career goals and how they’re progressing.
2. Drop the ‘manager’ tag and replace with ‘leader’
Rather than scrapping managers altogether, replace them with ‘leaders’. Today, we don’t want or need to be ‘managed’. Research has proved that giving people accountability for their actions, increases engagement and loyalty towards organisations. By giving authority to individuals to be able to make decisions, not only empowers them but increases efficiency for the organisation, reducing the chance of bottlenecks.
3. Give more feedback more often
Instead of having to make team members wait for 12 months for their review, over a 3 hour meeting, organisations need to provide more feedback more often. This feedback shouldn’t just come from ‘managers’ or ‘leaders’ as they should be known, it should be from more than one person – peers, mentors whomever the individual chooses. That way, a more complete picture can be built of the individual’s progress and a different perspective can be provided.
4. Set goals and objectives between individuals and leaders
It’s important for you to set goals and objectives together with your team members. Ask them how they can contribute to achieve the goals your organisation has set. Again, it comes down to ownership and if the individual has suggested a goal or objective, they’re much more likely to achieve it, than if they’re given one.
5. Let the individual take responsibility for his/her career development
Finally, helping your team members with their career progression is not all down to you, the employer. Competition is fierce in many industries in Australia to attract the best talent and then once you have those individuals, it’s a common misconception that it’s down to you to nurture them and outline a path for progression. Wrong. Today, this is a shared responsibility. The individual is responsible for their own career, ensuring their experience and skills are documented and taken with them to their next employer.
So before you scrap your managers altogether, adopt ‘leaders’ instead and give individuals more responsibility to self-direct their own careers. Equipping your people with tools and technology that facilitate regular conversation works well from both sides. For leaders, it’s timely information about where your people are going and how they’re tracking. For individuals, they’ll value the opportunity to gain regular feedback and take more control over their career. Do that well, and engagement and work satisfaction will soar.
You may have general ideas, however once you return to the daily operations of the business it’s likely your ideas gets buried deep in the demands of the day-to-day.
Many leaders feel as though they work hard both in and on the business and yet they do not achieve the results or the work life balance they need. Often, for a business leader the key reason is they haven’t dedicated the time to think clearly and strategically without interruption on what exactly it is that they want to achieve.
An important step in defining your business and personal goals is to have a clear vision of what your top priorities are, then outlining the results you want to achieve within a certain amount of time.
In New York Times bestseller What They Don‘t Teach You at Harvard Business School, Mark McCormack shares an interesting study that was conducted in 1979 on Harvard MBA students revealing the real impact of goal setting. He asked students whether they had clear, written goals for their future and if they made plans to accomplish them; 84% of students admitted they had no goals at all, while 13% had goals that were not written down. In fact, only 3% had specific goals in writing.
When interviewed 10 years later, the 13% of students who had goals were earning on average twice as much as those who had never established clear goals. However, the 3% with written goals for success had salaries that were a staggering 10 times more than the other students put together.
Ultimately, identifying effective goals and setting a strategy to achieve them helps leaders organise resources, streamline knowledge acquisition and raise motivation, particularly on long-term projects and objectives. Whether you‘re a business leader, a top athlete or a high achiever in any other field, establishing goals provides the focus needed in order to outperform.
Putting goal setting in place to move the business forward
An example of using goal setting to move the business forward is in a recent case study with TEC member Annie Flannagan, the CEO and Founder of Better Business Basics (BBB), which offers accounting and financial services to a range of organisations throughout Australia.
Working in such a competitive market, Annie learnt early on that the company would need to invest heavily in internal processes in order to succeed. To do this, the company approached the goal-setting process as a set of scales, divided between the front-end user experience and the back-end processes within the organisation.
“We see it like an old-fashioned set of scales – those two must be in balance,” said Annie.
‘Whenever we look at setting goals at the front-end, we create a reciprocal set of goals for the back-end.’
‘All businesses have that, but for use they have to be in balance, because if they are not, we end up with either clients that aren’t being fulfilled or employees that aren’t being fulfilled.’
This has also required a unique leadership approach from Annie, especially around the formulation of company goals and strategy. By putting these processes in place, the company has been able to stay flexible and respond to organisational challenges.
‘If you look at strategy, crafting the strategy is one thing, the delivery of the strategy is the bit which needs to be in balance,’ said Annie.
‘It’s about having the right combination of allowing creative thinking, working out what is not necessary, writing your goals down and then focusing to get them executed.’
For a fast-growing organisation, having multiple perspectives on the development and implementation of company processes around goal setting has been invaluable for developing future strategy.
Business leaders often lament that it is ‘lonely at the top’; with few realising just how truly isolated it can be in the boardroom. But just how pervasive is this problem, what are its potential impacts and why does it need to be addressed?
Feeling distant and isolated at the top is not just a matter of people not understanding leaders’ positions and circumstances – it can lead to depression, stress and a whole host of mental and physical health problems. In order to truly feel appreciated, leaders can often benefit from outside advice that without prejudice challenge and deal with issues relevant to business.
This could be behind the prevalence of executive coaching and peer support schemes today. In its International Business Report from earlier this year, for example, Grant Thornton found that more than a third (35 per cent) of business leaders around the world said they have used a business coach at some point.
For business leaders who are struggling to cope with the lack of support and peers at the very top, seeking the assistance of an executive coach or support group can be a wise step to take.
Why loneliness hurts
For many leaders, constant loneliness can accumulate and spiral into problems far deeper than most people believe. This was highlighted in a May 14 2014 LinkedIn article by Thomas Gelmi, in which the author referenced the suicides in quick succession of two top Swiss executives. As such, Gelmi claimed that personal support “is no longer a luxury” for business leaders, and executives would do well to forge relationships with “sparring partners” who can act as a source of mutual support.
The link between isolation in the workplace and depression is not new, and is something that needs to be given more attention if loneliness at the top is to be successfully addressed. UK organisation Depression Alliance investigated the matter in a study earlier this year, in which it surveyed more than 1,000 employees on how they coped with depression.
The survey found that a staggering 83 per cent of respondents said they have experience isolation or loneliness at work due to factors such as depression and stress. However, they may not be coping with it adequately – less than half of those who felt isolated said they confided in a colleague about the situation.
Those feeling depressed at work may certainly find it beneficial to have an ear that can listen to them, as 71 per cent of respondents who did confide in a peer said it helped.
Emer O’Neill, chief executive of Depression Alliance, said finding support is key for depressed and isolated workers.
“Depression is the biggest mental health challenge among working-age people and often leads to considerable loneliness and isolation at work,” she said.
“However, many companies aren’t properly equipped to manage employees who suffer from depression so providing support to these individuals in the workplace is essential.”
Such is the impact of isolation in the workplace that a study from the University of British Columbia suggested it is more harmful than bullying or harassment, and can lead to dissatisfaction and health issues.
“Ostracism actually leads people to feel more helpless, like they’re not worthy of any attention at all,” noted Professor Sandra Robinson, co-author of the study.
Given the potential harm that isolation and depression can bring, it’s essential that business leaders know what steps to take to overcome the problem.
What leaders want
So what should leaders be doing to reduce the chances of becoming lonely at the top? According to the 2013 Executive Coaching Survey led by Stanford University, while the vast majority of CEOs today want advice and support, not many are actually getting it.
The study found that nearly two-thirds of business leaders do not receive external leadership advice or coaching. However, practically all respondents admitted they would be “receptive to making changes based on feedback”.
“Given how vitally important it is for the CEO to be getting the best possible counsel, independent of their board, in order to maintain the health of the corporation, it’s concerning that so many of them are ‘going it alone,'” explained Stephen Miles, CEO of The Miles Group, which also played a role in conducting the survey.
“Even the best-of-the-best CEOs have their blind spots and can dramatically improve their performance with an outside perspective weighing in.”
But does having an external leadership coach really generate results? Apparently so, according to the ‘Lonely at the Top: The Importance of Mentoring for Chairmen, CEOs and the C-suite‘ study by IMD and CMi. In the study, the two organisations surveyed a range of business leaders across the UK and Europe and found that 82 per cent reported that receiving mentoring “led to improved leadership behaviours and ability to manage key relationships”.
Mentoring was also helping in other business areas, such as improved strategic performance (71 per cent) and better decision making (69 per cent).
Even in an increasingly time-pressured business environment, CEOs need not go at it alone. By seeking assistance from outside coaches, mentors and support groups of like-minded leaders, they can stay healthy, develop as a leader and drive their organisation to success.
Innovation has become an area in which CEOs cannot afford to ignore. The importance of innovation has become a major area for senior executives to address as they look to improve their performance.
The result is that many executives now see the ability to formulate and implement an effective innovation policy as one of the most important aspects of their leadership development.
According to the Australian Bureau of Statistics (ABS), investments in innovation are now widespread throughout the country’s economy. In most recent figures, the ABS revealed 36 per cent of companies had introduced new innovations in 2012-13, while a further 22.8 per cent stated they were still in the process of developing new products and services.
However, innovation is also an area senior executives are struggling to align with company strategy, making it harder for companies to combine their development efforts with internal processes.
This was the finding from a recent study from Strategy&, formerly Booz and Company and part of PricewaterhouseCoopers.
The organisation’s research found that aligning company strategy with innovation is a major concern for companies in coming years, with 20 per cent stating this is the largest obstacle for a successful innovation policy.
A further 14 per cent are concerned about trying to incorporate company culture into their innovation policies, while 13 per cent are looking to build an external innovation network that could improve their performance.
The research found that product innovation is no longer the main area for companies to address, with the majority of research and development spending set to shift away from goods and towards services in the future.
Organisations are also beginning to prioritise radical innovations amongst new products, rather than investing in incrementally improving an existing product or service, according to Barry Jaruzelski, senior analyst at Strategy&.
“With the healthier market conditions, it is not surprising that business leaders say they plan to focus more on big breakthroughs. This will require companies to build new capabilities, an effort which they must not underestimate,” said Mr Jaruzelski.
“It’s not by planning or shifting spending alone that they will achieve this.”
Clearly there are weaknesses in the current approach towards innovation, meaning CEOs are going to need to spend more time aligning strategy with the development of new products and services.
How do different organisations approach strategy and innovation?
Innovation is usually assumed to be a single process, but in fact it will take different forms depending on the composition of an organisation and the different strategies that are in play.
That is the finding from a further research project from Strategy&. The organisation has formulated three unique forms that businesses can take when developing an innovation strategy.
- Needs seekers – companies that use customer insights to drive their performance, finding innovative products that are specifically tailored to the needs of the customer.
- Market readers – companies that are adept at reading shifts in their industry, and will then invest their research and development efforts into areas that are consistent with shifts in the marketplace.
- Technology drivers – companies that are the most committed to out-of-the-box innovation strategies, relying on new developments and product offerings to offer something new to their customers.
Each of these different approaches to innovation require organisation-wide cohesion, which can then be applied to the specific product innovations that a company is pursuing. Strategy& also suggested that each of these models comes with a unique approach to the innovation process, with each being driven by different stakeholders within a business.
Strategy, not financing the key to effective innovation
Finally, one of the biggest mistakes CEOs can make is to assume that innovation is simply a financial exercise and that by increasing funding into a certain area they will be able to develop new products and services.
A study from the Harvard Business Review (HBR) suggests that the opposite is actually true – organisations that reduce their expenditure in research and development can actually see a greater return from their investments than those with a large budget for pursuing new products.
Using the case study of CISCO, the research suggested that innovation within an organisation consists of two different processes – explorative innovation and exploitative.
The first relates to a company’s ability to pursue big-picture thinking and develop products that are radically different to anything currently on the market. Exploitative research on the other hand, focuses on commercialising existing processes and driving new growth within an organisation.
Importantly, exploitative innovation doesn’t require a significant investment, and can often yield a greater immediate return for a business than explorative research and development.
In the case of CISCO, the researchers found that although overall investment in innovation declined in the early 2000s, the company’s output of patents – i.e. its exploitative innovation – actually increased.
Even more, successful organisations are those that can quickly change gear between these two different forms of innovation. By quickly shifting between philosophies, organisations were able to pursue the greatest number of new products and services.
Strategy underlying innovation
So how does organisational strategy factor into these findings? Well, firstly it illustrates how important company processes and management styles are for supporting research and development within a business.
Building and embedding this flexibility into the way a company approaches its internal processes is a major challenge for CEOs, especially as they look to develop a competitive organisation. Fortunately, the HBR research shows that developing the right strategy is more effective than simply expanding the budget for further innovation.
The research emphasised that effective leadership was essential for managing the strategic shift between the two forms of innovation.
“Visionary leadership is also about helping the company overcome inertia so that it can shift effectively from one frame of mind to another when the time comes. Few companies pivot easily, but those that do position themselves to ride wave after lucrative wave of exploratory, then exploitative, R&D,” stated the HBR authors.
As innovation becomes an increasingly important business function, effective CEOs are going to have to consider how they can align company strategy with innovation initiatives to drive greater value in their company.
Collaboration: having been bandied about the boardroom for decades, it nonetheless remains an enigmatic concept in business today. Is it merely one of those hackneyed buzzwords that are so heavily frowned upon on CVs and company mission statements, or rather an incredibly relevant concept that applies to the modern organisation?
Businesses of all size and shape today will do well to ensure collaboration is still a major priority – and the onus, no doubt, falls on the organisation’s leader. This seems to hold true across the world, at least according to an extensive global study led by CEO and author John Gerzema.
In the study, researchers polled 64,000 individuals across 13 countries on the qualities they believed led to successful leaders and businesses. One of the most prominent insights garnered in the study was that most people wanted their leaders to be more collaborative, with this trait ranking among the highest, along the likes of flexibility and selflessness.
In fact, an overwhelming 84 per cent believed that greater collaboration and sharing of credit are essential to a successful modern career. So what does this mean for those sitting at the top of businesses today?
It means it’s time to take collaborative leadership seriously, if you aren’t doing so already.
What does it really mean to be a collaborative leader?
The importance of collaboration aside, it can be difficult to pinpoint exactly what it means and entails, especially in a leadership context.
It’s worth having a look around to see how different people define collaborative leadership. According to an infographic from the Collaborative Lead Training Co., the workplace is evolving towards a more collaborative future and thus redefining leadership.
The infographic lays out eight key differences between traditional leadership and collaborative leadership. Among these are the notions that in contrast with the traditional model, collaborative leadership:
- Believes power is greatest in a collective team, rather than coming from a position of authority
- Openly shares information and knowledge, rather than imposing ownership on it
- Elicits suggestions and ideas from across the team – all the time
- Empowers the team with immediate time and resources, rather than providing these only when necessary
As can be seen from the infographic’s suggestions, a collaborative leader is one who embraces a ‘flatter’ organisational structure, sharing authority and accountability around the team instead of hoarding it themselves.
Additionally, in an April 17 2013 HRZone article, leadership consultants David Archer and Alex Cameron said there are three essential skills and three essential attitudes behind a collaborative leader. Even if a leader possesses the three skills, they will not be able to be fully collaborative if they don’t have the attitudes to match.
According to Archer and Cameron, the three vital skills for collaborative leadership are mediation, influencing and engaging others. Collaborative leaders, they say, are adept at addressing and resolving conflicts the moment they arise. In addition, they are skilled at influencing peers based on the organisation’s culture – which is a critical skill to have if they hope to share control and leadership.
Lastly, engagement and relationship building are essential qualities for a collaborative leader, and this involves clear communication.
So, what are the attitudes that accompany these crucial skills? Archer and Cameron outline agility, patience and empathy as the mindsets that leaders should adopt if they wish to be collaborative.
It is clear that there are some common threads that unite the schools of thought around collaborative leadership. Leaders attempting to follow this model should place emphasis on the team rather than the individual, promote a flat and open company structure and empower their employees. This should be backed up with quick-thinking and the ability to take others’ points of view.
Why it pays to be collaborative
But why is collaborative leadership so important? Especially in the modern business world, where technology is exponentially growing in prevalence and reshaping traditional interpersonal communication, adopting a collaborative culture is essential.
This was pointed out by Carol Kinsey Goman in a February 13 2014 Forbes article. Ms Goman stresses that the dreaded silo mentality is holding back countless organisations today, and not sharing information around the company can essentially “kill” it.
As a recent study by Interaction Associates suggests, not embracing collaborative leadership can also hurt your company’s bottom line. The group conducted a study on what impacts the confluence of leadership, collaboration and trust can have on a business – including its financial performance.
In the study, Interaction Associates ranked more than 150 companies based on how well they embodied these three components. It found that those considered strong across the three traits demonstrated superior financial results – for example, their P/E ratios were 28.5 per cent higher on average for those classed as weak.
Collaboration is not just a vague ideal that companies should aim for – it is a very real concept with tangible results, and it’s time to embed this into your leadership today.
We work with a lot of great leaders, but even the most confident among them feel the heat when attempting to execute a serious change agenda.
What makes leading change so demanding?
From your own personal efforts to change a habit or transition from the top of the curve to the next, you know the effort and personal commitment required to make change stick. When you extend that across your organisation and through to your customers, the increased complexity of the groups combined history and entrenched views of the world makes the process much harder. At the same time, your people are instinctively assessing where they will win or lose.
Your executive team may engage and debate the direction you want to take, but it’s easy to confuse agreement and head nodding with a commitment to take the action that delivers real change. If you have good people in your organisation, the chances are they aren’t willing to adapt to every new initiative that comes along.
The pace of change can also be frustrating and non-linear. People need time to absorb what it means for them personally. Teams need additional time to plan how supporting processes, tools, behaviours and culture align to ensure change is embedded.
Let’s assume you have mastered the basics. You have a strategy that tackles key pain points, shaped a vision through consultative engagement, people you trust lead the change and you’ve defined the metrics that will determine success.
These are all essential ingredients, but not a guarantee for success. As you’ll see from the two stories we selected, even with a focus on driving change and some basic principles in place, things can still go wrong.
We have a problem in Houston
We arrived in Houston in the middle of summer. The first mistake was venturing out on foot. Sidewalks often stop for no reason and crossing a parking lot can feel like crossing a desert.
We were implementing a new system and thought most of the challenging engagement work was behind us. We were starting testing when someone had said, ‘you should reach out to the team in Houston’.
We discovered they only had a team of 25, but importantly a team that would be responsible for 95% of all transactions and the majority of data input for the next year. With tight timeframes, the design team had focused on future state, so we had a patchy view of what really happened today. The reality was that this small team was critical to the current stage of the process, but was not a part of the future state vision, hence their limited involvement.
The agenda for the meeting in Houston was to outline the six-week schedule to go live and get commitment for testing. The response we got from a team that had no input to the scope or design was rather abrupt.
In the end, the IT team had to build additional infrastructure and migrate an extra 100,000 documents to ensure that the implementation didn’t cause massive disruption across the organisation in the medium term. The project not only blew out the budget, it was delivered 6 months later than planned.
What was the cost of overlooking a small middle office team that was going to be a phased out in 18 months time? Two of your scarcest resources – time and money.
We’re shutting it down
We were asked to look at the health of a joint venture of two financial firms. The risks posing a threat to the success of the change were flagged to the executive team – culture and leadership. Because both organisations were steeped in years of service guided by the principle of ‘client first’, the leadership team viewed these as internal issues and low risk.
We spent some month’s road showing a combined set of business and leadership principles, including the need to lead by example, and that’s just what happened.
Shortly after the launch of the new business model in the largest division, one of the smaller offices walked out. The media took hold of the story reporting rumours of two other offices at the door. The Chairman took matters into his own hands. He decided the firm’s reputation was at risk, called an ad hoc meeting and announced there would be no new financial model or change to the reward structure, and that the new business model was merely a guide. The CEO was forced to stand in the shadows and watch.
If key metrics rather than instinct had been applied in that pivotal moment, they would have discovered that they were only halfway towards achieving the target size of the new enterprise in line with their strategy – a strategy that depended on voluntary attrition.
But that wasn’t the real price paid. How does one value the cost of leadership that is undermined?
What’s the true cost of getting change wrong?
The senior sponsors in both cases underestimated the complexity of the change and the need to honour a process. They ignored key transition activities, didn’t take the time to consider potential change risks and were unable to hold steady in the storm. Ultimately, they paid a price.
How do you implement change in your organisation? Do you expect your CIO, head of people or project management officer to have the capacity and skill set to anticipate and act upon potential change risks? Do you seek an independent perspective or regularly monitor the health of the change itself to ensure you haven’t missed something that could de-rail the process?
When the cost of change to your organisation, your team and your own legacy is potentially so high, it might be time to take a fresh perspective and re-evaluate the cost of getting it wrong.
Written by Tiffany Jones and Adam Sanford.
Tiffany is a master speaker for The Executive Connection, with twenty years of experience advising institutions and family offices in the art of leading with confidence and building momentum. Adam is a strategic change advisor, with significant experience leading complex, large-scale transformation programs.
Adam and Tiffany work at Momentum Advisory Group, an advisory boutique aimed at helping individuals, teams and families in business to lead with confidence.
Every business needs to be able to keep up with market changes in the face of widespread upheaval. Maintaining this organisational agility isn’t easy, especially for large companies with an international outlook.
Among these is McDonald’s – one of the world’s largest and most iconic fast food brands that has reinvented itself in recent months by focusing on agility and innovation.
Meeting the challenge of a competitive marketplace
The food sector, and fast food in particular, has traditionally been one of the most competitive industries. The relatively low barriers to entry and large customer base have seen organisations compete on price, convenience and the shortest possible wait between ordering and eating.
While these factors have traditionally underpinned the industry, evolving market conditions and increasing competition from “fast casual” dining experiences that focus on quality have changed the industry.
For companies like McDonald’s, international economic conditions, such as slow spending in Europe, have affected sales while a generational shift away from fast food has decreased the number of young consumers dining beneath those iconic golden arches.
In the case of McDonald’s, the result has been slumping revenue and profits. The company’s revenue has dropped 11 per cent, resulting in a 30 per cent decline in profit, according to a report in Fortune Magazine.
To address this, the company has embarked on a strategy to become leaner. This year alone, the company will close around 700 under-performing stores around the world – double the original predictions. However, this shift is going much deeper than simply closing stores – the company is moving quickly to redefine its dining experience.
Reimagining the consumer experience
To reinvigorate global sales, McDonald’s has unveiled a number of new dining experiences that aim to reconnect with younger patrons, while also creating a higher-quality and more personalised product.
One such innovation has been the introduction of the Create your Taste experience in Australia, giving diners the opportunity to build their own burger from a range of 30 different ingredients. This new way of ordering uses touch-screens in participating stores that patrons can use to customise their meal.
This innovation is currently available in around 30 stores, but will be rolled out to 700 stores over the next nine months – underscoring how quickly this service is being scaled across the business.
While the Create your Taste product has been adopted across a large number of stores in Australia, other innovations have also been launched.
In Sydney, McDonald’s has launched The Corner, a redesigned McCafe that is styled to resemble an independent cafe rather than a chain. The design plays down traditional McDonald’s branding like the golden arches in favour of gourmet, personalised offerings served with metal cutlery and a range of cafe style hot beverages.
While the company has no plans to roll The Corner out nationally or internationally, it highlights the creative directions the company is pursuing in an attempt to reinvent its dining experience. This isn’t the first time Australia has seen the trial of new experiences from the company either – the first ever McCafe opened in Melbourne back in 1993.
Has this shift worked?
Transforming one of the world’s largest fast food services into an agile company that embraces modern trends is no easy undertaking. For McDonald’s, it’s too early to tell whether these organisational shifts will reverse the company’s financial position.
At an organisational level, there are signs this move is being embraced, with the company’s Australian CEO Andrew Gregory stressing these changes are designed to build a more transparent and responsive dining experience.
For other business leaders, the McDonald’s experience underscores how it is possible for even the very largest enterprises to become more agile and innovative. As market conditions continue to challenge organisations, developing, testing and implementing new strategies across multiple branches and departments will be a defining feature of successful companies.