Solid leadership is the cornerstone of many successful enterprises, helping boost morale, encourage innovation and drive forward important strategic initiatives.
However, poor leadership can have a devastating impact on an enterprise’s productivity, while also leading to higher staff turnover and disappointing financial results.
Unfortunately for Australian companies, a recent survey has revealed that employees across the nation feel leadership at their organisation is falling short of expectations.
Employees dissatisfied with leaders
Towers Watson’s 2014 Global Workforce study polled 32,000 workers across 26 countries, including Australia. The results showed just 44 per cent of Australians see their leaders as effective – well short of the 52 per cent average worldwide.
Importantly, leadership became the biggest factor affecting staff retention and engagement in 2014, compared with previous years when workload and work-life balance were considered the most important issues.
Middle managers are viewed slightly more favourably, with 57 per cent of Australians claiming people in these positions do a good job. However, this was still below the global average of 61 per cent.
Adam Hall, director of talent and awards at Towers Watson, told the Sydney Morning Herald that leadership is the most influential factor on a worker’s experiences at a company.
‘What Australians want their leaders to do is be very good at clarifying direction, vision and making good decisions about where the organisation is going, and sticking to that as a long-term strategy,’ he explained.
‘So if you want to have some job security – a career – then this is what the future will look like.’
Leadership development in Australia
The Towers Watson survey is not the first time this year that Australia’s leadership has underwhelmed researchers.
Figures from the University of Melbourne’s Centre for Workplace Leadership revealed 25 per cent of staff feel they have no one to look up to at their place of employment.
For middle management and senior executives, this climbs to 35 per cent. According to Professor Peter Gahan, director of the Centre for Workplace Leadership, Australian employees do not have faith in managers.
‘Leadership is the often neglected ingredient in productivity, with studies showing that employees who have greater job satisfaction and motivation create workplaces that have productivity gains of 30 per cent,’ he stated.
However, the data suggests there is awareness among senior executives and middle managers that leadership is lacking. In fact, 81 per cent of people in these positions said their businesses need better leaders – higher than any other demographic polled.
Furthermore, there appears to be significant potential in the Australian workforce, with 85 per cent of staff claiming they are willing to go the extra mile in their jobs.
The research indicates with the right leadership development, organisational structures and strategic approach, Australian businesses could benefit from substantial performance improvements at management levels.
Building better leadership
Writing for academic news site The Conversation, Professor Gahan said there are a number of issues that are preventing businesses from realising this potential.
Firstly, he pointed to Australian Bureau of Statistics figures that show fewer managers possess post-graduate qualifications than the semi-skilled and unskilled employees they supervise.
‘This is alarming at a time when the challenges of businesses are become more complex,’ Professor Gahan said in February.
‘This qualifications gap among our managers is [particularly] acute among small and medium-sized businesses (SMEs). Clearly, we need to invest more in training managers.’
Other issues include a lack of strategic capabilities and poor insight into identifying and acting upon market opportunities. Under-resourced HR departments were highlighted as a potential catalyst for these problems.
Professor Gahan said an important step in turning the tables on ineffective leadership is to encourage enterprises, particularly SMEs, to take proactive measures.
‘These are the very businesses we are increasingly reliant on to generate employment, bring new ideas and products to the market and drive growth in the economy, but with the most limited resources to tackle the problem,’ he explained.
Clearly, Australian leadership is suffering a crisis of faith, with many employees believing managers are failing to perform to the best of their ability. While the country’s mining boom years have offset productivity issues over the last decade, the economy may begin to falter as the resources industry wanes.
This is why leadership development could hold the key for businesses to unlock the potential held within their organisation, while also creating a workplace environment that attracts and retains the best talent.
Companies that fail to take the initiative now may find it difficult to keep up with more agile, strategic and tech-savvy competitors in the future.