Leaders bring out the best

External influences such as the economy and changing consumer trends may well impact on businesses; but it is senior managers who need to set the tone for their staff and show confidence in difficult times.

"The culture of an organisation is driven by its leadership," says Neil McGregor of Human Synergistics. "There is no other input, really."

McGregor, a lead consultant at the firm, which offers leadership development services, says managers need to create an expectation of behaviour for their staff, and that if times are tough, or innovation is required, to encourage them to challenge the status quo.

"If I'm asking them to go and find new ideas in the marketplace, and to make the customer central to what we're doing — and then we use that data to develop new offerings — then there's a good chance that our business will be sustainable as long as we can respond accordingly.

"But if I'm asking people just to get on and do their job, then they will actually start to feel disenfranchised or powerless about making a difference.

"We call this 'external adaptability' — have I got my finger on the pulse of what's happening in my market? Disruption will come from lots of players, for example, there's Uber challenging taxis or streaming television challenging DVDs.

"I created a vibe in my business by allowing people to get out there and understand the customer and create innovative solutions. You can't blame your performance on something you can't control because what's the point of doing that?"

McGregor says creating a positive culture at work might involve little more than making a decision and taking action.

"People will see that and know that the firm is not sitting still, leadership is all about change," he says. "Taking action is key so that people can see that you're on to something. If you want a steady state, then just put management in place, but leadership is about change."

Including staff in what's being planned, or what issues the firm faces, is also key, he says.

"Give people a role to play, rather than trying to do it all yourself," says McGregor. "No one of us is as smart as all of us. So get people involved in those conversations and get people with diverse backgrounds and all levels of experience.

It is those conversations than can come up with wonderful ideas."

McGregor doesn't buy into the idea that staff faced with troubled waters will look to jump ship, taking institutional knowledge with them and leaving employers with poor performers.

"What we would call constructive employees seem to work in environments that they enjoy. And so even if business times are hard, if you are creating an environment which is enjoyable for them to work in, so they're challenged by this predicament — and they're not feeling beaten up by it or despondent by it — then those people will feel empowered to help you get out of it," says McGregor.

However, McGregor says that kind of culture has to already be in place when trouble appears — it's not likely to cut any ice if it is reactionary.

And when it comes to talk of less productive employees, McGregor doesn't buy into it.

"Fundamentally all people are good people," he says. "If some staff aren't productive then what systems and processes are they experiencing within the leadership that is stopping them from being as productive as they can be.

"Just to say that the world's full of people with below average productivity is a bit of a cop-out in my experience. Often it's the environment in which they're operating in that reinforces a culture of people keeping themselves safe and not taking any risks.

"That's where leaders really need to step up and take ownership and allow people to be themselves."

McGregor says the hardest job of a leader is to manage a business from a business-as-usual perspective while at the same time creating the future business model.

"That can be very tricky, but it's very necessary," he says. "But if you've got the right culture then people will step up and do their best and help you through that process — they will put themselves on the line.

"Whereas if you've got a culture which is more defensive then people won't feel like they owe you a lot. And so they're not necessarily going to go down with the ship."

Could this be why New Zealand is at 31 in the OECD's productivity chart?

"There are probably a lot of people out there who can answer that better than I can," says McGregor. "But if you calculate productivity by gross domestic product divided by the number of employees ... New Zealand's a pretty small country.

"And even though it's got a reasonable landmass for its population, we don't have any manufacturing like Germany, we don't have a lot of local resources like Australia — where you can pull stuff out of the ground.

"If we started to introduce a lot of automation and AI to reduce the number of people doing certain jobs then productivity might go up. Unemployment might go up too.

"But New Zealand's average culture from the data we've collected is no different to that of the US, Australia and the UK. Having said that, there are plenty of opportunities to improve business performance through organisational culture.

"It's quite possibly one of the things that we — New Zealand — should differentiate ourselves around; creating these awesome cultures that make a big difference. Because the rest of the world isn't; they're talking about it, but very few are actually doing it."

Change, strong productivity and improvement all comes down to leadership, says McGregor.

"If leadership is about creating the environment where people can be their best, then we need to be proactively doing that. And the great way to do that is to be talking to staff all the time. Leadership is not reactive."