Effective Leadership

Effective Leadership:
Current Research, Theories and Skills of Effective Leadership
By Dr Ron Cacioppe


There is a new kind of leader that is emerging in modern day organisations. Ray Andersen and Dennis Littky are representatives of this new type of leader. They have a vision, an ability to inspire a concern for people and a desire to have their organisations fulfil a worthwhile purpose.

Ray Andersen is the Chairman and ex-CEO of InterfaceFlor, a company that makes carpet tiles in a way that results in no environmental damage. Ray started his company to capture a new market for office titles. After 10 years in business he read a book that changed his life when it suggested that companies should operate in a way that is socially and environmentally responsible as well as commercially successful. Since the mid 1990s Ray has built one of the largest carpet manufacturing and distributing businesses in the world and his product is totally in harmony with the environment (no toxic glues, recycled fibres, natural colours, etc.). In addition, Ray has attracted employees who are as committed to his vision as he is and who feel they are working for a great company that empowers them to be profitable and to ‘do well by doing good’.

Dennis Littky the founder of The Big Picture Company also has a strong and clear vision of what he wants his organisation to be. Littky firmly believes that the fundamental role for companies of the future is to become a catalyst for social change and to work for the greater good of the communities they serve. “The Big Picture Company”

Both Andersen and Littky are a new breed of leader. They have the personal characteristics (honesty, intelligence, charisma, etc.) of successful leaders and they have a vision which contributes to a wider purpose. They have the ability to transform the people’s ordinary day at work into a meaningful and important contribution, not only for themselves but also to the wider community they belong to.

This new type of leadership will need to have up-to-date management skills and will also need to provide a worthwhile purpose for work. This new type of leader will need to be able to reconnect individuals with their organisation and the world and to help workers provide meaningful service. This type of leader may not be common in today’s competitive business world but the rising expectations of the community and the need for environmental action will require this kind of leadership for any organisation to succeed in the future.

While leaders like Richard Branson, Steven Jobs and Bill Gates were the high profile leaders of the past, leadership at supervisory, middle and senior management levels is needed in all successful organisations. There are many Australian and New Zealand managers who are excellent leaders. In this article we explore what we have learned about leadership and which things contribute to leadership being effective and successful.

The 14 Secrets of a Happy and Productive Workplace
The Gallup organisation has compiled results from questionnaires and interviews of more than one million employees over 25 years. Using various statistical methods, the researchers identified which factors would indicate whether employees were likely to be satisfied and stay with their employers. These ‘core elements’ attract and retain productive employees and can be summarised by these questions:

1. Do I know what is expected of me?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the past seven days, have I received recognition or praise for good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission of my company make me feel like my work is important?
9. Are my co-workers committed to doing quality work?
10. Do I have someone I can confide in at work?
11. In the past six months, have I talked to with someone about my progress?
12. At work, have I had the opportunity to learn and grow?
13. Do I have a safe environment; physically, emotionally and mentally at work?
14. Does this organisation minimize its harm on the physical environment.

The last two items (13 & 14) were added by Ron Cacioppe after discussing this items with over 3000 people and finding that a number of people commented on the need for safety and better treatment of the natural environment as things they wanted in a great place to work.

According to the Gallop researchers, these questions are particularly important to productive, talented workers and less so for under-performing staff. As the results show, pay does not get mentioned and most of the items involve the quality of workplace relationships – with colleagues, bosses and workplace friends. Yet many managers today do no have the ‘soft’ skills or willingness to tackle interpersonal issues and are uncomfortable with the people side of management, preferring to focus on tasks rather than the subtle areas of human emotions and motivation.

These fourteen factors give leaders a clear idea of what their employees need to experience job satisfaction and to be productive. To start, employees want to be told what is expected of them in clear and straight-forward terms (although 70% currently indicate they are not clear what their managers expect). According to these results those leaders who help people have constructive and supportive relations at work will help that workplace become a great place to work.

Leadership is Important - Again!
Around the world there has been a new interest in leadership. Political parties, large corporations and community organisations change their leaders more frequently now that in the past. There is more debate, discussion and criticism about leadership in the workplace and in academic circles than in the past. The election of Barack Obama as President of the United States, however, seems to have reignited people’s confidence in leaders.

A search of the word “leadership” on the Internet generates 138,000,000 references to explore! The number of books and journal articles describing leadership has increased dramatically in the last 5 years. Why?

One of the major reasons is change. Leaders have a lot to do with change and since Australia, New Zealand and the world are undergoing significant change, the issue of leadership has become very important. Increasing competition, computer technology, diminishing union power, outsourcing, demands for improved customer service, tighter legislation on business, racial bias, changing interest rates and downsizing are a wide range of issues leaders must deal with quickly and effectively.

Leaders are important during times of change since there is uncertainty, confusion and risk involved and leaders have two qualities that are vital during this period. First, they are able to understand the confusion, they can often see some reason for the change and what needs to be done with the organisation and people to successfully deal with the change and secondly, they have the ability to motivate and get people to do what is necessary for the new direction to be successfully implemented.

A number of organisations have recognised that they do not have a vision to steer them through the rapidly changing and challenging future that faces them. More specifically, they realise that they are over managed and under lead. The modern worker is less likely to respond to a manager that directs them to do something and expects the worker to carry it out without involvement in the decision or freedom to do it in the way he or she sees as most effective. In addition, since the environment is changing so rapidly, leadership needs to occur close to the customer rather than from central control. What this means is that leadership is becoming a key element and the nature of leadership in our modern world is changing because situations and humans are quite different from 50 years ago.

Transformational Leadership
Most of the leadership theories presented have been about transactional leaders. These kinds of leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements. There exists a kind of understanding between the leader and the follower that if the goal is achieved the follower’s own interests and desires will be rewarded.

But there is another type of leader who inspires followers to transcend their own self-interests for the good of the organisation, and who are capable of having a profound and extraordinary effect on their followers. These are transformational leaders like Ricardo Semler, Bob Ansett, Anita Roddick and Nelson Mandella. Transformational leaders are often also charismatic, but transformational leadership has some additional characteristics which are important.

They also pay attention to the concerns and developmental needs of individual followers; they change followers’ awareness of issues by helping them to look at old problems in new ways; and they are able to excite, arouse and inspire followers to put out extra effort to achieve group goals. In essence, most transformational leaders are also charismatic leaders because they are seen as heroic, and as having a profound and extraordinary effect on their followers.

Transactional and transformational leadership should not, however, be viewed as opposing approaches to getting things done. Transformational leadership is built on top of transactional leadership-it produces levels of employee effort and performance that go beyond what would occur with a transactional approach alone. Moreover, transformational leadership is more than charisma. ‘The purely charismatic leader may want followers to adopt the charismatic’s world view and go no further; the transformational leader will attempt to instil in followers the ability to question not only established views but eventually those established by the leader.’ A truly transformational leader not only instils a vision in followers but also builds a visionary company aimed to last for hundreds of years.

The evidence supporting the superiority of transformational leadership over transactional leadership is impressive. Transformational leaders who were school principals were shown to have significant effect on the commitment, citizenship behaviour and job satisfaction of teachers and to have some positive effect on student academic achievement. Head nurses who are more transformational are more likely to have staff nurses with higher job satisfaction and lower turnover. Studies of American, Canadian and German military transformational officers were evaluated as more effective than their transactional counterparts.

Both transformational and transactional leadership are necessary for leadership effectiveness for two reasons; First, the magnification effect of transformational leadership over and above transactional leadership means that the two approaches are needed from effective leaders, depending upon the situation. Second, the nature of the characteristics of transformational leadership (shown in the table below) means that they will be put into effect at different times and with different subordinates, contingent upon both the individuals and the situations..


Characteristics of Transactional and Transformational Leaders

Transactional leader
1. Contingent reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognises accomplishments.
2. Management by exception: Watches and searches for deviations from rules and standards, takes corrective action.
3. Management by exception: Intervenes only if standards are not met.
4. Laissez faire: Abdicates responsibilities, avoids making decisions.

Transformational leader
1. Charisma: Provides vision and sense of mission, instils pride, gains respect and trust.
2. Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways.
3. Intellectual stimulation: Promotes intelligence, rationality and careful problem solving.
4. Individualised consideration: Gives personal attention, treats each employee individually, coaches, and advises.

The Australian research has generated similar research results to American studies and indicates that the paradigm of transformational leadership does not vary across the two cultures. Parry and Sarros found however, that Australians indicate that their leaders display transformational leadership characteristics less compared to Americans who rate their leaders. Australian leaders are rated as having substantially less charisma and provide less intellectual stimulation than American leaders. Research conducted in several countries including India, Italy, Canada, New Zealand, Japan, Singapore and Sweden showed that the transformational leadership model has considerable universal potential and can be applied across cultures.

In Conclusion
The list below summarises the key skills and abilities effective leaders have according to 50 years of research. While there are other factors such as the industry sector, the experience and the managers and leaders above a leader, the list below defines some of the most important characteristics we currently know are part of good leadership.

Elements of Effective Leadership

Transformational Ability
A motivating vision. Stimulates the followers to think. Individual consideration

Situational Skill and Contingency Factors
Able to vary style to fit. Follower’s motivation and competence. Task urgency. Power. Leader-member relations. Ability to achieve subordinate’s goals

Behavioural Style
Able to be task and people oriented. Men tend to be more task, goal directed. Women tend to be more facilitative, relationship directed.

Personality
Honesty and integrity, Self confidence, Intellectual intelligence, Energy and ambition, Emotional intelligence, Charisma, Self-monitoring, and a Desire to lead

Becoming an effective leader also involves having good followers and a good leader will select and develop followers that fit his or her style and will contribute to the vision and goals that are needed.

Making the effort and time to develop and practice good leadership is important for the people you manage, for the team and for the organisation. It not only results in a successful and profitable organisation that is providing quality service and products, it helps create a satisfying and great place to work!