Quality of leadership has an enormous impact on employee engagement, says Christien Winter, director of Sheffield, recruitment consultancy and New Zealand licensee for the talent management solutions of Development Dimensions International (DDI). DDI's Global Leadership Forecast reveals that the organisations with the highest quality leaders are 13 times more likely to outperform their competition in key bottom-line metrics such as employee engagement, financial performance, quality of products and services, and customer satisfaction.
When it comes to engagement, Winter says that undoubtedly passion for results is a key attribute of an effective leader.
"Engaged leaders engage their teams. They need to inspire and motivate their teams, providing real clarity for focused effort that is aligned with the organisation's goals, in a time when change is constant."
Winter believes a critical leadership quality is the ability to lead people through changes while ensuring they continue to see the end goals and are inspired to work towards those. Another key characteristic for success is the ability to develop their team, she says, and adds that people leave their leader for a number of reasons, but lack of development tends to rank high on the list.
Winter notes that a wide range of research clearly shows that engaged employees are more satisfied, less likely to leave the organisation, and capable of achieving more of their goals.
The DDI forecast reveals that when leaders report their organisation's current leadership quality as poor, only 6 per cent are in organisations where they report that they outperform their competition. This compares with those who rate their organisation's leadership quality as excellent-more than three-quarters (78 percent) of leaders reporting that they are outperforming their competition in those key bottom-line metrics.
Leadership quality doesn't just affect the bottom line, says Winter; it also affects the retention of the organisation's employees as well as its leaders' engagement and passion. "Organisations with higher quality leadership retain more employees than their competition, and they also have more engaged and passionate leaders.
"One step beyond leadership engagement is passion. Passionate leaders are defined as those who bring their full energy to their work, proactively make decisions and add value, and act with a sense of ownership," says Winter. "Leadership passion should not be ignored because the most pervasive reason for employees to take a promotion was greater compensation and not their passion for their role. In this research, leadership quality is related to passion as well-leaders in organisations with higher quality leadership are almost eight times more likely to report that the passion of their leaders is high. Given that a cornerstone for motivating and inspiring a team is the leader's ability to create the right environment for their team, this is a critical piece of the puzzle, sitting alongside coaching skills. Other elements include valuing individuals and providing focused work and clarity of purpose."
Winter says that storytelling is another important way leaders can inspire and motivate their teams. She notes that great leaders link stories to business rationale - bringing people with them by engaging from both the head and the heart.
Feedback from organisations in the New Zealand market, and a review of many international studies and articles, highlight emerging leadership skill needs and gaps, says Winter. "These are also impacting changes in style, as the skills provide for a different type of leadership." Winter says there is a strong shift to customer obsession, inspirational leadership and leadership teaming /collaboration modelling.
"The need to lead organisations through innovation, and the ability to lead really effective change, also feature strongly for effective leadership," says Winter. "Current thinking on leadership styles and what is required for success highlights an inclusive, opportunistic and strategic approach, with the ability to drive execution in a state of change, innovating and ensuring flexibility and agility of teams and the organisation."
As a result of findings in recruitment and HR specialist Randstad's World of Work Report 2012/13, Randstad director Paul Robinson says that when it comes to the skills of the future, employers stress the need for leadership - creative, innovative leaders with the ability to adapt to changing and competing business demands.
The report reveals that only half of the organisations surveyed rate their current leadership capabilities as good and just 11 per cent as excellent - reinforcing the importance of strengthening leadership in many New Zealand organisations. Employees confirm the need for improvement, with 37 per cent rating their managers' ability to motivate and inspire their team as average or poor. Fifty-four per cent say this is the single biggest attribute that defines a successful leader, followed by the ability to build trusted relationships. The report states that employee trust has declined over the last 12 months, with 27 per cent saying they don't trust their organisations' leaders - up 3 per cent on 2011.
Robinson says that as the next generation of leaders is coming into the workforce, a shift is taking place in the way business leadership is viewed. Traditionally managers rose through the ranks, based purely on logical progression from one level to the next rather than on their qualities and skills as potential leaders. Today, he says, as employers recognise growing gaps in leadership talent, this is no longer the case.
Tips for developing future leaders
* Start today - identify high potential employees in your organisation and start talking to them about a leadership career path.
* Be the leader you want to create - leaders who model the leadership behaviours they want to see in others have a dramatic effect on shaping an organisation's culture.
* Share leadership stories - sometimes employees have real potential but don't aspire to leadership roles, because they can't imagine how to get there or what it will look like when they arrive. Successful managers should be leadership champions, sharing stories about their own career and lighting the way for others.
* Give entry-level managers time for professional development and networking outside the business. Organisations now operate at warp speed, but a constant focus on execution denies managers the thinking and learning time they need to become leaders.
* Implement a career development program tailored for each stage of the leadership pipeline. Provide opportunities for graduates to shine, give high potential employees more responsibility to stretch them, and prepare talented middle managers for the transition to senior leadership through mentoring, coaching or post?graduate management education.