Leadership. What is it and why is it so important in business?
Leadership in business is like an airline pilots check list – critical to review – often and thoroughly, so that you don’t “crash and burn.”
Interestingly, the very sad revaluations out of the Hayne Royal Commission into “Misconduct in the Banking, Superannuation and Financial Services Industry” and separately, The Royal Commission into “Institutional Responses to Child Sexual Abuse” as well as the Aged Care Royal Commission all speak about a lack of Leadership as well as poor Culture within some organisations as well as the poor Character of some leaders.
From a professional viewpoint, the findings out of these three Royal Commissions saddened and disappointed me greatly, most particularly the lack of good leadership.
Leadership, Character & Culture, in my view, are related and will be referenced within this opinion piece. Having poor traits in those three areas is not what we aspire to as business leaders in the Australian economy.
Interestingly, there have been more books written about leadership than any other management topic. Notwithstanding this, it may surprise you to know there is no one universally accepted definition of leadership or one universally agreed practise of leadership.
Leadership means different things to different people – no one can quite get a precise handle on it. And, of course, there is the age-old question: Are successful leaders born or made?
Clearly then, leadership is not an exact science, but it is applicable to all facets of life. All of us are leaders as parents, community members, and as leaders in our roles within our business lives. That’s why I consider myself, as Chair of a number of boards, a leader of leaders.
One of the traits of good leadership is the capacity to make things better and to influence outcomes and as businessmen and businesswomen we are empowered to drive change and improve what we do. Beyond that, let me tell you in simple terms what I believe leadership is and is not.
Firstly, Leadership IS NOT a popularity contest.
Effective and decisive leadership means making unpopular decisions at times – but always in the best interests of the organisation. I have had to make a few on the boards that I Chair, but I believe that people will respect you in the end for making the right choices. Leadership is about getting results and every decision any one of my boards and I make is based on what we genuinely believe is right for our organisation and our long-term success.
My next comment is – Leadership DOES NOT mean always agreeing with a majority or “herd mentality, if you will.”
My role requires me to champion and lead change at a board level, and this sometimes takes people outside their comfort zones. To be sure, these are challenging times for many businesses, and we will stagnate (and ultimately die) if we don’t change and embrace new ways and new opportunities.
I make no apologies for wanting my clients’ businesses to be successful and I will do my best to inspire and motivate all of their staff to be part of a tough but rewarding journey to grow their businesses to become market leading.
So, to take the alternate viewpoint now; can I say that: – Leadership – is about role modelling. It is about the gentle art of persuading others to understand and embrace a vision, it is about getting others to agree and support. It is about Character and it is about setting and upholding best practice Culture.
As a leader you must set an example and practise what you preach. You will never earn the respect of people if you say one thing and do another. Leaders have a primary role for developing, communicating and living the values and ethics that define an organisation. I take this responsibility very seriously and strive every day to do the right thing in my many Leadership roles.
I am conscious that the tone at any business is set at the top and staff closely watch the behaviour of their CEO and Board. Their conduct establishes expectations and standards and thereby impacts the culture of the organisation as does relationships with;
1. The Board Chair and CEO
2. The CEO and his/her Leadership Group and
3. Divisional leaders with their individual teams.
Now that you know my thoughts on leadership, please allow me to share another observation with you – genuine leadership is non-hierarchical. Much of the leadership literature is concerned with those who reach the top of the tree and this, I believe, has blinded us to the true nature of leadership.
An organisational title, such as team leader or manager, or even CEO does not confer some hierarchical authority, and it does not of itself make you a good leader.
The core competency of good leadership is character and character is ALL about honesty and integrity. Your character says more about your leadership qualities than a title ever will. In my view, good leaders are:
2. They develop strong relationships
3. They help others to be successful and
4. They serve rather than rule-Yes, you heard me correctly- they serve rather than rule.
I believe the best book ever written on leadership is Servant Leadership by Robert Greenleaf.
When I assumed the Chair role at Stride Mental Health (a not-for-profit charity) six years ago, I brought with me my personal leadership style which every leader does. Mine (I would like to think-but ultimately, it’s for others to determine) is about putting serving the greater needs of others as the primary goal of my leadership. That’s Servant Leadership.
Servant Leaders serve others by investing in their personal and professional development, which is why we have spent so much time at Stride Mental Health on training and learning. Within a servant leadership framework everyone is part of a team working to the same end.
Good leadership builds good teamwork and I encourage all of you to play your part in being effective leaders within your own business or organisation.
I should make some reference to the experts who tell us that there are three types of Leadership styles;
1. Firstly, a transformational Leader who tries to transform the Culture of a business by motivating people to do more than they originally expected.
2. Secondly, a relationship-orientated leader is concerned with both performance -that is – the task or goal at hand – and the quality of his or her relationship with employees
3. Thirdly, a participating style leader – where he or she invites the employees to share in decision making. His or her main role is that of facilitation and communication.
Earlier in this opinion piece I dodged the chestnut question; Are successful leaders born or made?
In my view it can be both, and much is dependent upon the upbringing of the individual and events that shaped his or her life, but whether a leader is born a leader or whether he or she is made a leader, matters not as much as how they use their Leadership skills and what positive impact their leadership brings to any situation or event.
In my view, “Managers” are not necessarily Leaders – especially those that just “direct” their staff to do things rather than working with their people to achieve outcomes.
Alternatively, a good leader will begin with the end in mind and take staff along for the journey, and
1. Will have an open and good working relationship with his or her staff
2. Will allow them to make decisions
3. Will allow them to learn
4. Will allow them – within reason – to make mistakes
5. Will allow them to take responsibility for their own actions and
6. Will allow them to take their training wheels off (so to speak) and feel the exhilaration of their own actions and decisions
Importantly, please be aware that when I use the term “Manager” I am using it in a generic sense in that we are all “Managers” irrespective of what official title we have and so being a true leader is a cut above from whatever title our business card indicates. Very interestingly, I have never seen a business card which describes someone as “Leader” of a certain function – because being a true Leader must be earned.
Some examples of modern-day outstanding Leaders, from both genders – are;
1. Barak Obama
2. Adam Goodes
3. Jacinda Ardern
4. Ash Barty and
5. Michelle Obama
True leadership can cost dearly – hopefully not at any organisation with which we are associated – but on the flip side – true leadership can leave a permanent legacy on the world.
Former US President Abraham Lincoln was assassinated for abolishing slavery and Nelson Mandela was jailed for 27 years for his undying commitment to end apartheid in South Africa. Their servant Leadership changed the world forever – and for the better.
As I have mentioned, there are many outstanding leaders around the world today, some well known some not, but all are stepping out on the edge to make sure their Leadership makes a difference.
So…. My question to you is: Who inspires you to be a great leader?
Once you are confident with your own leadership ability and style you may want to occasionally ask individual team members how they would go about solving an issue your team is having. Moreover, when one of your team members brings a problem to you – occasionally ask them what they would do if it was up to them to solve it.
Your actions will do four things:
1. Make them feel more inclusive
2. Develop your team members own leadership skills
3. Develop their problem-solving abilities and lastly
4. Demonstrate that real leadership takes real skills and ability and hard work
And finally, remember, leaders lead and managers (by definition) “direct “and with that in mind, I will leave you with three questions to ponder at a future time you put aside for self-reflection.
1. What does exceptional leadership look like to you?
2. How do you achieve that in your leadership role within your business?
3. How can you help others within your charge to be the best leaders they can be?
This opinion piece is provided by John (JT) Thomas, a 46-year veteran of the financial services industry and since 1987 a specialist in commercial mortgage funds. Considered by many to be the father of the modern commercial mortgage fund sector, JT helped establish and then managed – for 17 years – what became the largest and most successful commercial mortgage fund in Australia – The Howard Mortgage Trust – with assets exceeding $3 billion. Under JT’s stewardship, investors never lost one cent of their investments and indeed, investors always received competitive monthly returns. JT was also Chair of the $40 billion mortgage trust industry sector working group.
JT has been proudly involved with Princeton for eight years and sits on both the Princeton Credit Committee and the Princeton Compliance Committee as well as being an advisor to the Princeton Board.