Why Creating The Right Leadership Culture Is Really Important

We always hear about the importance of leadership in business, but seldom does it seem that typical business management pays attention to the fact that leadership, or the lack thereof, can be instrumental in influencing talent in a business and keeping the churn out.

Traditional management techniques tend to suggest that team members are easily replaceable, requiring little more than a new job listing to fix the gap in the chain. But as a lot of leaders can attest, people bring with them skills and knowledge outside the job description.

So this means businesses and therefore its management need to create the right infrastructure to harness good talent. This is now as important as ever, as the workforce trends to a younger average demographic with differing expectations, the demand for alternate management styles is at an all time high.

But in the past, the peak of management was seen as to plan and command. But the modern workforce wants something different, and for businesses stuck in the past, managing without leading is an expensive mistake.

Let’s get to the facts...

More than 30% of the workforce is now made up of Millennials, according to Pew Research Center. Millennials want to work somewhere that shares their values. Indeed’s Job Hunt report found that a recommendation by someone in your professional network, not including a colleague, typically accounted for how 26 per cent of people found their next job.

And then 19 per cent of job hunters are looking for greener pastures because they’re dissatisfied with their current job. And just 36.7% of employees are engaged at work, according to Gallup. In this particular Australian report by job searching site Indeed, we can see that employees who are not engaged do not do their best work and are at risk of leaving your company. They want to feel like their work has a purpose and makes a difference – they want a good culture fit.

A global Deloitte report looks at how today’s organisations exist in a glass door era, where every corporate decision and interaction “is immediately publicly exposed and debated”. Recent research shows that in most companies, engagement levels are low. According to Gallup, under 15% of the global workforce is highly engaged.

These numbers demonstrate that there is a lack of refined process around measuring engagement – things like performance reviews and the determination of career growth prospects – that is ultimately resulting in low levels of employee confidence in their organisation’s ability to drive the desired culture.

DUP1132_CultureEngagementFigure2

There is an interesting school of thought that says companies should treat employees as customers and consider them as volunteers in their position, not merely workers filling a role. It may be a left-of-field concept but with the birth of websites such as LinkedIn, Glassdoor and even Facebook in some instances, the power of transparency is at the fingertips of the employee.

With this global shift, as outlined in Deloitte’s report, employee motivations have changed and there is a legitimate focus on purpose, integration and work-life balance. And now more than ever, we can see that an organisation’s cultural reputation is paramount.

True leaders build reputation and nurture talent

Clearly this shows that reputation – both formally and informally – counts. And one of the best ways for a business to tarnish reputation is by bad management and poor leadership, while one of the best is to be seen as a standout in the jobs field for work-life balance and strong management.

Employee motivation is central to driving success and business leaders motivate their employees. Managers that fail do so by making common mistakes, whether that’s to downplay and pigeon-hole talent, devaluing creativity, individuality or critical thinking.

Google is a great example of a company people want to work at. Why? Because it treats its employees as more than oil in the machine, giving them an exceptional work environment, whether that’s free snacks, drinks and meals, or chill out time and space, or hire scooters, for example.

Google applies its data analytics to staffing, finding, ”periodic one-on-one coaching which included expressing interest in the employee, and frequent personalised feedback ranked as the No. 1 key to being a successful leader” for its staff.

Okay, so why is toxic culture so bad?

Management is the group that builds and cultivates that culture, so when leadership is lacking or management's bad the culture becomes toxic. We’ve all seen it in workplaces from across the jobs market: people leaving unannounced, the new hires get left sitting at their desks without proper on-boarding or, worse still, are simply thrown in the deep end with high expectations on instant output.

When culture is bad, people pack their bags and leave. It’s that simple. Projects are disrupted, plans are dropped, and expenses balloon out. The costs of turnover can run from the tens of thousands of dollars to more than two times an employee’s annual salary. Not only is there a financial cost, but also the danger and difficulty of finding someone who can fill the void of the past worker.

When culture is great, people stay, knowledge stays, and costs are ultimately driven down. True leaders focus on how to bring out the best in their team, by building trust, providing constant feedback, and working with them, rather than lording it from on high.

Re-Leased UK Managing Director Richard Kennedy believes that creating the right environment for your teammates is imperative to business success.

“You can have a great vision with a fantastic idea or service, however, you need to create an environment to be able to execute that vision...It’s important to have the right people in the right seats and for everyone to understand the larger purpose of the business, and for everyone to buy into that.

“Often, every person in your team has different motivations at different stages of their lives. It’s important to understand what those motivations are so you can work together to achieve their goals. If you do that, everyone is getting better and the subsequent result of everyone improving is that the business will continue to be better. "

For modern startups in the world of selling software as a service (SaaS) such as Re-Leased, the approach to scaling can be a little different to traditional businesses.

On the one hand, the core product is constantly encountering new iterations, innovations and updates, so the approach to selling (and marketing) the offering has to shift.

The constant changes in a fast-paced start-up are incredibly exciting but it can be equally demanding for your teammates. That’s why it’s so important for the purpose of the business to be very clear.

And so it turns out that being inclusive is extremely important for all leaders...

General managers in today’s working environment, or in the case of Re-Leased where managing directors work intimately with their staff, have had to rethink their approach to people management.

The shift from top-down, autocratic management to a more inclusive style of overseeing staff has been popularised in the past decade, particularly as the workforce continues to trend statistically to a younger average demographic. We are now seeing a lot more of a strong embrace for constructive feedback, positive affirmation and open door policies.

Quite often modern managers talk about letting their staff quote-un-quote fly, which is something Richard believes in, too. Employees will make mistakes, but it’s not the mistakes that matter – it’s how they bounce back in their iterations to improve.

“We try and make the environment as autonomous as possible, let people reach their potential as fast as possible...They may make small mistakes here and there, however, those that thrive in an autonomous environment add incredible amounts of value to the business.

“As a team, we look after one another and celebrate the small wins, these small attributes put us in good stead for when we have challenging times. As we grow, it’s increasingly important for me to scale and adapt our culture,” says Richard.

Historically, the culture of a business was merely understood as the approach to ‘get things done’, but as we continue to see, a lot of business leaders have challenged that idea by stripping it back even further to highlight that the old school way of thinking is flawed and surface-level heavy.

Re-Leased Finance Director Sam Caulton says that businesses simply don't get where they want to be without a healthy culture.

"I know it is cliche but the main theme is that culture eats strategy for breakfast. You don't get where you want to be if you don't have really awesome culture. We have seen how culture failings have had detrimental impacts on a business – there are plenty of examples out there.

"As a leadership team, one of the first things we do when we sit down is talk about culture, and then we get into the detail. In a lot of businesses, culture would be the last detail. Culture is very dear to the way we look at things," says Sam.

It starts at the top. Engagement should be the number one priority for management. Output evaluation, such as programs to evaluate talent and employee output, should be put in place to provide a sense of purpose to the business’s workforce, too.

These are all important variables that underpin a workplace that’s meaningful, encouraging and conducive to high levels of productivity.

Good businesses are steered by good managers, and it’s their duty to coach their people to maximise their output and feel good while doing it. Businesses should encourage cultural improvements to improve execution, retention and financial performance.