Small Business

What are the characteristics of a great business leader?

| More

To become the best leader, you have to learn from the best. What characteristics make a great business leader?

Experts on business are always talking about the role of leadership in sensational corporate success stories. But despite all of the talk and the analysis, the essentials of great leadership are a bit like the Loch Ness Monster — everyone talks about it but you don’t really see it!

Way back in 1997, I interviewed celebrity chef Neil Perry from Sydney’s internationally renowned Rockpool restaurant, which had gone from a $5 million turnover show some years before to a $20 million operation with 260 staff! On Perry’s admission, doing a SWOT analysis was an important innovation behind these superb results.

“Looking at my strengths, weaknesses, opportunities and threats told me I was a threat to my own success,” he said.

His response was to lump all of the jobs, particularly the more boring ones, he wasn’t good at and he gave them to someone trained for boredom — an accountant. Perry gave half of his business to his accountant cousin, Trish Richards, and he thinks this was critical to the turbo charged growth his business produced.

My esteemed economic history professor from UNSW, Gordon Rimmer, once told me, as a young student in Business History that a successful entrepreneur/leader was someone who made the right decision at the right time.

“It doesn’t matter if he is on the golf course or at the club when he is asked the question,” he revealed. “As long as he gets it right.”

US academic and author of the book Good to Great, Jim Collins, mustered a big team of post-graduate business students to find out what were the best-performing listed American companies between 1975 and 2000. What emerged was a list of 11 big names including the likes of Kimberly Clark, Phillip Morris and mortgage bank Wells Fargo.

Collins and his crew set out to work out why these companies were stellar performers outperforming the US stock market indices by factors of 2.5 to six times. And one area focused on was leadership.

Stand-out characteristics of these companies’ leaders included managing for the long-term and not short-term positive impressions for stock analysts and the media. This took character and often drew criticism.

In general, the CEOs were not celebrities but honest John-style performers who had come up through the business over a long period of time.

The great leaders, according to Collins, enlist great people to work with them and consequently are big questioners, using what is known as the Socratic method. This works off the idea that by asking questions rather than presuming you know the answers you arrive at a better understanding of problems and help deliver better answers or solutions.

The great leaders were great listeners but did not want ‘yes’ men and women around them. They encouraged healthy and even aggressive debates to encourage broad thinking, however they would eventually arrive at a decision and expect their teams to fall in line.

This is an area where many good leaders who aspire to be great might need some professional help to learn how to manage such debates within management without creating acrimony and festering aggression between key staff members.

There also seemed to be a common commitment to articulating and identifying a simple plan for building a great company.

In a similar study of Australian firms, First Eleven: Winning Organisations in Australia, one of the co-authors, Dr Graeme Cocks of Melbourne’s Business School, confirmed many of Collins’s findings.

Talking to the Strategy Group’s Mid-Market conference in Canberra, Cocks said a survey of 1000 CEOs a few years ago nominated 11 top organizations which included the likes of Harvey Norman, Macquarie Bank, NAB, Qantas, Woolworths, Rio Tinto and Westfield. Strong leadership was a common characteristic but Cocks said the survey did not highlight charismatic, high profile leadership as a vital ingredient in the company’s success.

“The leaders could be likened to captain-coaches who believed in encouraging a team mentality,” he said. “Most were internally appointed, they looked for the right people rather than the best and they were big measurers.”

James Strong, who successfully led Australian Airlines and later Qantas and now is chairman of Woolworths is not a fan of bombastic leadership and dragging people along by a big presence.

“Humility -never underestimate the power of it,” he insists. “The only way you will ever be a leader is by earning people’s respect.”

And your example is critical.

“Actions speak louder than words,” he said. “Think first of life from their perspective.

“Behaviour is everything — you will be judged by your own behaviour,” Strong said.

John Allen, the chief executive officer of NZ Post, who is seen as a lateral thinker and innovative leader recently was in Australia and offered five characteristics of good leaders.

First, you need to have intellectual curiosity. “You’ve got to be interested in people and things and open to new ideas and the magic of the mind,” he suggested. “Next, you have to be self aware.”

Third, he thinks you have to be a risk taker. “In business you’ve got the have the bungy jump rubber bands on,” he said. “And you’ve got to be prepared to back yourself.”

Fourth, like Strong he played the character card. “You’ve got to live day by day in a manner that is consistent to what you take into your business,” he advised. “People will not follow frauds.”

Finally, he insists you’ve got to be accountable. “When it’s good news it’s the team’s fault and when it’s bad news it’s yours,” he bluntly put it.

Leadership nearly defies definition and that’s why we often point to others who seem to get it right.

Stephen R. Covey is often the starting point for anyone on the leadership path. His famous The 7 Habits of Highly Effective People has stood the test of time as one of the greatest business self-help books of all time and recently he came up with the The 8th Habit — From Effectiveness to Greatness.

Echoing some of what James Strong referred to, Covey explains the core of the 8th habit.

“The 8th habit is to find your voice and inspire others to find theirs,” he writes. “Voice is unique personal significance — significance that is revealed as we face our greatest challenges and which makes us equal to them.”

The HBR look at the incomplete leader observed what many a leader might sense regularly.

“Most leaders experience a profound dichotomy every day, and it’s a heavy burden,” the HBR team write. “They are trapped in the myth of the complete leader — the person at the top without flaws.”

There are many ways to make up for blatant weaknesses at the top but HBR offers this great play for aspirational leaders. “Leaders skilled in visioning use stories and metaphors to paint a vivid picture of what the vision will accomplish, even if they don’t have a comprehensive plan for getting there.”

But it’s not just learning from the greats, it does involve taking some risks. The Roman philosopher Seneca explained the challenges nearly 2000 years ago. “It is not because things are difficult that we do not dare; it is because we do not dare that things are difficult.”

Published on: Monday, May 16, 2011

Related articles

Lessons from the top

What we need is leadership

The essential ingredient

A story of survival: 27 hours trapped under the World Trade Center

Why entrepreneurs are an important asset to the global economy

blog comments powered by Disqus

Promo_shop