Isolation – Are you lonely at the top?

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.

Depression is the biggest mental health challenge among working-age people and often leads to considerable loneliness and isolation at work

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.

Even the best-of-the-best CEOs have their blind spots and can dramatically improve their performance with an outside perspective weighing in.

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.

Struggling to Align Company Strategy with Innovation?

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.

These are:

  • 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.

Is company culture holding back your organisation?

Company culture can be a difficult thing to quantify and measure, especially for an SME that is looking to become more innovative.

While CEOs and company leaders will play a major part in establishing and maintaining a strong internal culture, there are still issues which derail these initiatives.

This is especially challenging if it means that companies cannot remain competitive and stay ahead of the opposition. Innovation is just one area where company culture can play a major role in long-term success or failure.

This issue was recently explored in the Culturing Success report from Microsoft into how widespread innovation is within a small business and what is setting apart high-performers in this space. The research reported that nearly 70 per cent of SMEs in Australia are finding it difficult to become more innovative because of company culture.

According to the report, there are four cultural issues which are undermining the performance of Australian firms. These four are; working in silos, employee distrust, poor collaboration and a fear of failure.

The importance of innovation was underscored by Microsoft Australia’s Managing Director, Pip Marlow, who stated that “innovation is vital to the success of any business, no matter how big or small.”

“However, our research reveals that many businesses find it difficult to develop a culture of innovation.”

While there is clearly a lot of room for Australian companies to improve their processes, the report did highlight features that set highly innovative companies apart from the competition. The 33 per cent of firms that fell into this highly innovative category possessed five key features, including:

A strong customer focus
Awareness of and appetite for innovation
Visible and involved leaders, which in turn create engaged employees
Authentic internal dialogues
A supportive working environment

The result of implementing these processes is a considerable improvement in the performance of an organisation. According to the research, 39 per cent of high-performing firms reported above average growth, compared to less than a quarter of those who are poor innovators.

So how can companies achieve this new focus? The report suggested four strategies that companies can embrace to move closer to the example set by highly innovative organisations:

Attract new staff

The study emphasised that attracting the right staff is an important part of building an innovative business. By bringing in new perspectives, organisations will be able to create great ideas and subsequently see them through to completion.

The advantages of attracting the right staff go beyond boosting innovation, they can also play an important role in realising customer engagement.

Many Australian companies are already aware of the challenges that come alone with attracting and retaining valuable staff members. For fast-growing SMEs like Enablis, finding the right staff members has been the core challenge when trying to scale the business to handle further expansion.

Collaborate with external partners

Creative ideas and innovative solutions don’t just come from within a business – in many situations, creative ideas will actually come from tapping into the skill sets of other firms and working collaboratively.

Business collaboration is also becoming increasingly important across new technology, with collaboration over cloud technologies predicted to double over coming years, according to a study from Research and Markets.

Evaluate performance

Companies that are looking to become more innovative will need to have established and concrete processes to measure performance. Microsoft suggested organisations can audit themselves to understand exactly how well they are realising an innovation strategy at each stage.

One option that companies can use is the assessment tool provided by Microsoft. This quick test was designed to accompany the research and allows businesses to measure how innovative they really are. This sort of information can then be used to identify the areas an SME will need to work on if they want to move up the scale.

The benefits of this system were also highlighted by Pip Marlow, who emphasised the advantages of taking this assessment for small-business owners.

“Microsoft’s new self-assessment tool is the first of its kind to help small and medium-sized businesses identify their culture-related obstacles and then implement tangible solutions to become true innovation leaders,” stated Ms Marlow.

Build a flexible workplace

Staff will often perform better if they have the opportunity to get out from behind their desk and work in a way that best suits them. Not only can making this change ensure that staff are thinking creatively, it can also reduce the amount of stress they feel outside of work.

Solutions like working from home and employees choosing their own hours are easy ways for small businesses to introduce more flexibility, and thinking along these lines is a key ingredient in building an innovative company.

A flexible workplace can also involve introducing new processes to reduce the amount of time spent working on menial or repetitive tasks. For TEC member Alister Haigh, introducing ‘Baxter’ – a robot  designed to take over menial processes – has introduced a new level of flexibility into his family’s chocolate business.

Of course, none of these approaches alone is going to transform a business into an innovative organisation. But, by combining these different factors into a single coherent strategy, businesses will be well-placed to become a highly innovative firm that is also a leader in their industries.

For small businesses, building this sort of culture is going to require constant attention and maintenance. While this might sound daunting, the benefits for SMEs that can embrace this way of thinking are certainly going to be considerable.

4 traits of transformational leaders

Transformational leadership is a style of management that many people wish to achieve and businesses often seek out candidates displaying this talent.

People exhibiting transformational leadership typically focus on revolutionary change within organisations based on a commitment to the company’s vision and strategy.

The late Bernard Bass, a professor emeritus in the School of Management at Binghamton University, highlighted four characteristics of transformational leaders.

This list of commonly cited abilities can help enterprises to identify individuals suitable for transformational leadership development opportunities.

1. Idealised influence

One of the key ways transformational leaders inspire change is to engender trust and loyalty among followers through charisma and positive behaviour.

Creating this sense of idealised influence in the workforce can be achieved in a number of ways, including leading by example, articulating a vision and explaining how to reach goals.

Having high ethical and moral values – and displaying them in dealings with staff – is also a characteristic of transformational leaders. Seen as role models, these individuals have the confidence of staff, who will typically respect their decisions and strategies.

2. Intellectual stimulation

Spurring innovation and effecting change requires staff to re-examine entrenched beliefs, notions and processes. Only then can radical new initiatives be introduced.

Transformational leaders create an environment of intellectual stimulation, where employees’ awareness of business issues is developed and encouraged.

Creativity is the key to success and staff are given guidance on how to optimise their problem-solving capabilities, including lateral-thinking exercises.

Managers tend to foster a climate where new ideas can be explored in a supportive, collaborative atmosphere, without fear of punishment or ridicule.

3. Individualised consideration

Transformational leaders have a tendency to prioritise an individualised view of the workforce. In other words, they treat each staff member as a separate person with their own skills, talents and motivations.

Taking this into account helps leaders to select roles for employees that are best suited to their capabilities, which enables staff to reach personal goals more easily.

Leaders can achieve this in a number of ways, including listening to personnel closely, praising positive performances, publicly recognising achievements and privately thanking staff for outstanding contributions. Some managers may also take on a coaching or mentoring role to help colleagues develop further.

4. Inspirational motivation

Keeping people inspired is often what gets the creative juices flowing, which is vital for transformational leaders looking to make large-scale changes to business operations.

Common motivational tactics include encouraging teamwork, articulating the company vision in a way that appeals to an employee’s own objectives and developing a shared goal that provides meaning to daily tasks.

Transformational leaders typically create an atmosphere where followers are inspired to become an intrinsic part of the brand’s culture and vision. They set high standards, which gives people tough – yet achievable – targets that boost productivity, while providing a sense of fulfilment.