Why leadership is the key to meeting your ROI targets

How is the leadership within your franchise? Top class? Could be better?  

At every level of the franchise network good leadership will only serve to benefit the business. And bad leadership can be disastrous.

Here Ryan Z. Makris, founder, Service Desk Coaching looks at leadership in small business.

There is currently a dearth of people skills in leadership in Australian business. People skills are an essential method of communication with your team that unfortunately has been overlooked in our race to keep up with the rapid growth in digital technology.

A leader’s impact is vital, especially in small businesses where solid leadership is required due to the multi-skilled nature of the operational delivery model, with fewer people and departments for responsibility to be handballed to throughout the day.

Everyone in a small business has a face to put to a name, so bad leadership can be disastrous if not managed correctly.

Small business needs great, authentic leaders who are able to engage staff to achieve significant wins financially and, just as importantly, developing the businesses culture for success. This is an area human resource departments and hiring managers need to heed advice from research.

A study from the Australian Institute of Management and Monash University said that middle managers lacking the skills to lead are lowering workplace productivity. Of 2000 middle managers surveyed, 63 percent said their own leadership skills were average or below and 83 percent of employers rated their leaders as average or below, statistics that illustrate the way we promote and identify leaders is antiquated.

Our survey of university graduates who majored in leadership and management did not uncover any significant skills that will allow them to step into the role in the first few years after graduation, even after three years of full-time study. This is alarming as the nursery of most of our future leaders is the higher education system.

The Study of Australian Leadership (SAL), by the Centre for Workplace Leadership at the University of Melbourne, found more than 40 percent of organisations did not meet their performance targets for ROI and profitability.

Research leader Professor Peter Gahan said, “organisations often promoted people into leading roles because they were very good at certain specific tasks, not because they were adept at managing others.

"Based on their technical performance, they’re thrown into roles where they have to exercise very different skills, and often with no experience to manage those roles particularly well. I think this partly explains that gap but also tells us why investing at the frontline in leadership capability is critically important.

“The current economic climate makes it crucial for Australian organisations to urgently review their leadership programs. It’s workplace-level leaders and frontline-level leaders that are really important for driving those linkages between the quality of leadership, innovation and performance, and employee engagement,” he said.

People are elevated into leadership roles, especially in small businesses, due to the length of time with an employer or via their credentials alone, and that limits your potential leaders.

A better way would be practical people skills and leadership scenarios that would highlight if this person is fit to develop and encourage their team with empathy and no ego, as mentioned in Bob David’s TedX talk Leadership without Ego.

Leadership and people skills go hand in hand in all industries, not just ICT, and this is fundamental to businesses’ productivity, both from a well-being and operational perspective.

There must be a balance and true leaders need to understand that it’s not about them, it’s about elevating the team to succeed, by their support and the atmosphere they create.

The team is only a reflection of the culture the leader builds or is willing to accept, but senior management must drive the leadership change, to achieve ultimate success in facilitating the new wave of leaders.

A non-negotiable in any leader is genuine empathy towards the team, above all else.