The summer headlines have been full of examples of leaders lining their
pockets. The public has been angered by a series of scandals from
politicians’ expenses to bankers’ bonuses.
Company bosses should take heed of the mood. When business is booming,
employees may turn a blind eye to their bosses’ errant behaviour, but when
the economy turns down they are less tolerant. Basic honesty and fair
dealing are expected by the workforce. If bosses don’t lead by example, it
is a struggle to keep staff onside.
“Good leadership has the largest influence on employee engagement,” said Pete
Bradon, head of research at Best Companies Ltd. Companies with the highest
scores for leadership in the staff survey are likely to achieve a better
position in the Best Companies national ranks than firms that don’t score
well in this area.
Leaders may be pleasantly surprised by the high levels of faith their workers
have in them. This year’s Best Companies survey shows no sign of cynicism
from staff. In the top 10% of companies that earn a place on the Best
Companies list, nine out of 10 employees agree with the statement, “senior
managers truly live the values of this organisation”.
This vote of confidence in the leadership team is backed up with faith in the
person at the top — 94.9% of employees in these companies agree that “the
leader of this organisation runs this organisation on sound moral
principles”.
In the companies outside the top 10% of those listed, 84.6% of staff agree
that senior managers live the company’s values, and 91% believe the leader
runs the firm on sound moral principles. The corresponding scores for
companies that entered the competition in 2009 but didn’t make it onto the
list are much lower, at 70.2% and 81.4% respectively. “However, even here
the figures do not show widespread cynicism,” said Bradon.
Of the 738 companies that completed the Best Companies process, 62 have more
than 98% of their workforce agreeing that the leader runs the firm on sound
moral principles. Twenty one companies have 98% of staff who believe that
senior managers truly live the values of the organisation, and only 12
achieve the near perfect 98% or more for both statements.
Edward Jones, a financial-services company, is the only one of these 12 firms
that isn’t categorised as small — it employs 742 people. Not only does the
company boast impressive levels of staff engagement, achieving second place
overall this year, its workforce shows the high levels of faith in the
senior managers and leader that are usually associated with much smaller
firms, where it is easier for the boss to engage with staff.
The head of the firm in Britain, Tim Kirley, who earned our leadership award
this year (see panel on right and below) says he and his senior colleagues
don’t take it for granted. “As new people come to the leadership team, they
have to spend time earning that trust. They walk in and there’s a mandate of
authority, but trust and respect are earned every day on the job,” said
Kirley.
This could go some way to explaining why the scores earned by companies for
senior managers living the values of the organisation are consistently lower
than those staff give for the leader running the firm on sound moral
principles. Those new to a leadership team could affect the workforce’s view
of whether the whole team lives the firm’s values. It is also easier for one
person to live up to high moral standards than for a whole team.
John Dunford, director of Bourne Leisure, said: “It’s vital that both myself
and my leadership team set the right tone. The way we behave, what we do,
how we carry ourselves. All those elements are critical. It is important
that we act appropriately.”
Bourne Leisure was beaten by only one company in the 20 Best Big Companies to
Work For list when staff were asked if senior managers truly live the values
of the organisation.
Dunford and his senior colleagues face a different challenge to office-based
businesses. The company behind Butlins, Haven Holidays and Warner Leisure
Hotels employs 5,027 people who are based at 53 sites around the UK. The
nature of the job means staff aren’t necessarily in front of a computer to
receive company updates, or at the end of the phone to speak to colleagues.
“In a smaller company you can be seen pretty much every day,” said Dunford.
“In a larger company, particularly when it is geographically spread like we
are, that’s a challenge.”
Dunford believes that living up to the values of the company is a way of
keeping staff on board. “It is the most important thing you do. People look
to you for a lead,” he said.
“You send a really important message, both in terms of how we reinforce our
goals and our personal behaviour. You just have to set the right tone for
the business.” Judging by Bourne Leisure’s jump from 15th in 2008 to second
among big companies this year, Dunford has got the tone just right.
Of the 369 companies that completed the Best Companies survey in 2008 and
2009, 198 have worse leadership scores than last year, with an average fall
of 5.7%. The 167 firms that improved scores in this area did so by an
average of 4.4%.
There is a direct link between leadership and overall staff engagement. Of the
companies that had better leadership scores than last year, four in five
climbed up the Best Company lists, with an average improvement of eight
places. Of the listed companies recording a worse leadership score than last
year, 84.2% also had a worse list position, with an average fall of 50
places down (or out of) the list.
This year Net-a-Porter, the online luxury fashion retailer, bagged the award
for most improvement, with the firm’s biggest increase being in the
leadership factor. The figure was up 9.5 percentage points on 2008.
Ten years since she started the business, Natalie Massenet still considers the
founding values important for her and her senior colleagues.
“It is Net-a-Porter’s goal to be the leading fashion destination, but built
into that mission is the offer of an exceptional experience for everyone who
comes into contact with us — our team, our customers and our brands,” she
said. “It’s about sharing our vision with the team, getting them to think
about where we are going in the next five years, getting them to believe in
it and allowing them to lead themselves.”
Staff recognise that Massenet and the senior managers truly live the values of
the company, giving a 72.2% positive score for this statement.
The 299-strong workforce believes she runs the firm on sound moral principles.
They gave a 74.7% score, 10.2 percentage points higher than 2008.
Bradon said: “Leaders and senior managers have to earn the trust that leads to
employees being engaged. This trust can take years to develop but can be
broken in a minute.
“How long does it take to recover when you have lost the trust of your
employees? For ever,” said Bradon. “Nobody ever forgets a complete loss of
trust. The relationship is never the same again and any future crisis will
always bring back the memory of the time the leader or the senior managers
behaved badly.
“The only option for leaders caught behaving badly is to resign. A leader who
has lost his followers is just a person standing on his own.”
Make an effort to talk to all employees
Edward Jones, a financial-services firm, was ranked second in the 100 Best
Companies to Work For 2009 and its UK chief executive, Tim Kirley, earned
our leadership award.
He believes it is important to see people face to face and tries to go to as
many meetings as he can. “I go to listen but also to remind everybody what
we stand for and the values that drive our behaviour,” he said.
“I try to set the example that you have to be out there seeing people face to
face. By me coming out to their office, they’ll take that cue that they need
to be out seeing their clients as well. It’s reminding them that everyone
appreciates that extra attention.
“Some of the meetings [I go to] are development meetings for the
individuals I work with. Our approach is, let’s agree what we need to
accomplish and then it’s your responsibility to deliver those results. I am
here to offer you training, support and guidance. That is treating people
with respect and they respond well to that.
“There is a lot to be said for physical presence. Whether my colleagues are in
Edinburgh or on a different floor of this building, it’s always a pretty
good use of my time for me to meet with them.
It allows me to stay visible.”
What The Experts Say
Give people autonomy to get on with their jobs
Tim Kirley, chief executive of Edward Jones IF people view a
relationship as hierarchical, I think that’s a barrier to getting results.
I’m always looking for opportunities to dispel that. Responsibility-based
management ties in with one of our values — that individuals are valued and
respected. Part of this is to respect their intellectual capacity and their
ability to thrive with autonomy.
I’m in London about 80% of my time and, when I’m not, I’m typically in
America. When I’m in Britain I try to be out in a branch office with
associates or meeting with clients. I go to listen but also to remind
everybody who works here, here’s what we stand for, here are the
fundamentals, here are the values that drive our behaviour.
I was in on Saturday, which isn’t a regular thing. I took a little stroll
round the building and there were six people in. It’s really amazing. I will
confess that I don’t know what they were doing. But they knew what they were
doing and that’s what matters.
Bosses must deliver what they promised
Jackie Orme, chief executive of the Chartered Institute of Personnel
Development
The model of heroic leader will die in the ashes of this recession — the
leader who is tough, strong, knows all the answers and doesn’t brook
dissent. Yes, we like heroes, but heroes can be quite limited. You can’t
manage on the basis that you have gone through a lifetime training programme
to prepare for it.
All leaders now have to accept scrutiny. They have to be prepared to do what
they say they will do, and in future being seen to have done it will become
more important.
This isn’t about being consensual. Of course, there will be times when the
leader will have to say: “We have to do it this way.”
What I am talking about is not needing to always operate in this way. With the
anger surrounding the leadership of banks and the scandal of MPs’ expenses,
people are more disillusioned than ever with their leaders. But then maybe
we have unrealistic expectations of them and have to balance things out.
Listening is the key to finding out what staff think
Pete Bradon, head of research at Best Companies Ltd The perceived
morality and ethics of leaders in business have a strong influence on
employee engagement. This is a potentially difficult area for leaders
because what is morally acceptable varies across industry sectors, so that
it is impossible to set rigid best-practice guidelines.
Setting appropriate standards in this area relies on the principle that is at
the forefront of all employee engagement studies — listening.
Normally those who talk openly with their employees and have a real interest
in what they hear, have no problem in judging how the business should
respond. However, employees who have any fear of retribution, or those who
like their leaders, will not voice moral disapproval directly.
This is one area where listening through an anonymous third-party survey is
the only way to get at the truth. Yearly tracking of surveys will allow
leaders to recognise a shift in the moral compass.
Tough times can bring out the best in leaders
Jonathan Austin, chief executive of Best Companies Ltd
Leading a company when times are good is fairly easy.
The real challenge comes when market conditions are tougher. This is when the
truly great leaders identify themselves.
This year’s survey shows that the recession can bring companies together when
leaders and staff pull as one. Staff engagement has gone up in many
companies, even as job security has fallen, because workers recognise that
conditions are beyond the control of even the most inspirational leaders.
Great leaders create organisational clarity so that people know where they
stand. When staff are worried about their jobs it is important to have
someone who can inspire people, to reassure them, and to create excitement
about where the organisation is heading. And when companies do have to let
employees go, it is important that it is done in the right way. People want
to work for caring and compassionate organisations with a clear moral
compass.
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