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In the age of increasing competition and a labour market as tight as the proverbial drum, the highly enlightened business leader has to create a special workplace for employee retention and attraction purposes. In fact, the requirement for business owners and managers to be champions of soft skills is a characteristic of some of the best businesses in Australia.

Competing demands

Malcolm Simister, principal of LMN Consulting and chair of the Victorian Institute of Chartered Accountants recently told a conference of chief financial officers in Melbourne that leaders have to contend with a modern business that generally has to be “clean, green and mean”. And it wasn’t just a customer demand – it was coming from staff!

An inconvenient truth

In a tight labour market, demanding Gen Y employees consistently demand their workplaces have good values and integrity, hence the ‘clean’ imperative. Meanwhile, new age business demands, as well as young staff, are enamoured with the post-Al Gore inconvenient truth that business has to be pro-green.

“Research has shown that three-quarters of 20-year olds say they would not work with a firm if they didn’t agree with the company’s values,” Simister told the conference.

Meeting expectations

Finally, in a globalised and deregulated world, all of this warm and fuzzy stuff can be costly; businesses have to be competitive on costs just when these young guns want higher pay, better hours and a worker-friendly workplace and conditions.

This is the time for the stand-out business leaders to step up to the plate. And the game is a must win one, with employees more prone to walk with rival employers happy to give a destination.

Scaling the heights

The 1 October 2007 edition of Fortune magazine put the spotlight on some of the US’ best leaders and leading companies as judged by a joint survey of Fortune, Hewitt and RBL Consulting. And a feature of great leaders in the US is an inclination to actually train leaders within their businesses. This is an investment in the future and also provides a more reliable return on investment on the workers you have currently sunk your money into by increasing the chances of keeping the good ones in your team.

“Your competition can copy every advantage you’ve got – except one,” writes Fortune’s Geoff Colvin. “That’s why the world’s best companies are realising that no matter what business they’re in, their real business is building leaders.”

Team effort

This is a big call, but stay with me on this. If you were shocked at Colvin’s view, consider this cliché you might have used yourself: “Our people are our greatest assets.” I have heard this from a host of business award winners over the past few months as the small business award season heats up.

In fact, I heard so many employers thanking their staff for their success, I eventually asked all of the employers at a recent conference to stand up at their table and I asked their staff to show them the appreciation they deserve for giving them jobs, training, pay and respect.

Good to great

Note that winning businesses actually do understand the value of good staff and that’s why the hot US businesses in this survey go long on training – and leadership training is great for turning an average worker into a super star.

For the record, GE came in at number one in this survey and Proctor and Gamble (P&G) was runner-up. Both of these corporate heavyweights are famous for training generally, and making in-house leaders specifically.

Yale’s School of Management professor, Jeffrey Sonnenfield, calls these businesses “academy companies”.

Quality and quantity

Outfits like those above not only offer more internal training to their executives, but their old boys and girls become high flyers in other companies who recognise the quality of their ‘alumni’.

P&G has an impressive list of former executives, who have shot to the top, indicating that it is no coincidence and that P&G’s training has left a big mark. According to Fortune, the list includes Microsoft’s Steve Ballmer, eBay’s CEO Meg Whitman, Intuit founder Scott Cook, AOL founder Steve Case and GE’s boss Jeff Imelt.

The 2007 view on business today is that money is cheap and available, but the scarce, critical resource is quality labour. And it is becoming increasingly believed by US companies that businesses need talented people more than these hot shot workers need employers.

Practice what you preach

American corporate executive from Capital One Financial, Judy Pahren, says the three factors leg-roping young workers include:
•    Job flexibility
•    Their development
•    The company’s community involvement.

Do these sorts of things and your business becomes a talent magnet, but the story coming out of the top companies is that the boss has to put a lot of time into building leaders. Some of these CEOs will personally get involved with hundreds of executives to ensure the value of building internal leaders comes back to the business.

Pooling the talent

This talent development is thought to have a ‘cascading effect’ throughout the business for others workers who interact with the well-trained budding leaders, adding to the total ‘return on investment’.

Jeff Fettig, the CEO of Whirlpool, didn’t mince words on the importance of this outlay. “This is the single best investment we make in our company,” he tells Fortune.

The value of internal or on-the-job training for leadership quite shocked me and is forcing a bit of objective soul-searching about my time management within my business.

The leader within

The president and chief operating officer at Eli Lilly, John Lechleiter, has a firm view on how you make great employees with leadership potential.

“Two-thirds of leadership comes from job experience, one-third from mentoring and coaching, and a smidgen from classroom training,” he advises.

The local co-founder of Gloria Jeans Coffees, Peter Irvine, has recently penned a book called Win in Business, which underlines the 20 keys to catapult you towards your vision.

This has been a sensational business success story with more than 400 franchise stores opened since 1996; it owns the international brand name and that means they have more than 750 stores across 30 countries!

Winning culture

Irvine’s chapter on People kicks off with what he thinks is at the core of great leadership, which he borrowed from religious author John Maxwell.

“It is important people believe in their leader, but it is more important that a leader believes in his people,” he warns business owners and managers.

Maxwell wrote an intriguingly titled book called The Maxwell Leadership Bible, which refers to the business guru’s guru, Peter Drucker, who once used parallels with Moses leading the Israelites out of Egypt to show business leaders the ‘Promised Land’ of a winning business.

Keeping in touch

Seven points were made, but the fourth has relevance to the idea of propagating more and more leadership in your organisation. Moses is said to have created a team of leaders who effectively gave the masses closer access to the leadership and Drucker argues, like your staff “the people felt more connected”.

Irvine looks at the leader’s role from a slightly different angle, but it’s all about bosses being more engaged with staff, especially key ones.

“If your door is always closed and you are never available, your people will become disconnected from you and from your vision,” he writes.

He advocates looking to develop leaders in your business and warns against keeping managers within your business who are afraid of talented people who have these leadership traits.

Lead and achieve

Other talent tips from Irvine include hire the right people and not just the ones you can afford and hire people who are better than yourself and learn to manage them. “They will make you look good,” he tips.

And like Eli Lilly’s John Lechleiter, Irvine believes in business coaching and mentoring to bring the best out of businesses and the key people who lead them.

“If Tiger Woods – the greatest golfer in the world – needs a coach, who says you don’t need one!” he argues in his book.

Whether it be internal or external, leading your key people to a higher level is a common characteristic of winners in business.

Published on: Monday, June 29, 2009

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