In the knowledge economy, effective leadership is critical to ensure everyone can contribute to the best of their ability. Reducing individual, organisational and even societal stress, effective leadership also increases value through enhanced communication.

While communication skills have been identified as a core competency in almost every leadership role, including the training and development of professional accountants, many approaches to developing these skills fail to consider the impact of personality. Poor leaders typically know the textbook approaches to effective communication but fail miserably in execution, often resulting in poor motivation and a reluctance to contribute.

The importance of effective leadership in terms of its role in motivation was identified in the IMA publication 'Unrecognized Intangible Assets: Identification, Management and Reporting' using Figure 1.

This chart remains relevant as organisations try to communicate their performance on managing talent to the market place. However, while metrics such as diversity, absenteeism and training hours are often used to measure performance, they fail to clearly demonstrate the effectiveness of talent management.

It’s not how many qualified staff you have or absenteeism that matters, it’s demonstrating the effectiveness with which the organisation is using its resources. This determines motivation and only motivated employees will deliver the optimum results. That is the job of the leader, so an understanding of leadership effectiveness should be central.

1. Define organisational values, as these establish the base for the behavioural culture
2. Discuss how these values can be converted into specific operational behaviours.
3. Educate, support and coach leaders, to ensure they believe in the culture
4. Help leaders develop self-awareness through tools such as emotional intelligence and determination of behavioural traits
5. Establish foundation for consistency of action to ensure the core business processes reflect the values and culture being demonstrated by the leader.
6. Implement effective 360° assessment, feedback and coaching
7. Support leaders in learning from the feedback they receive and in developing their skills.

There are three questions leaders can ask themselves in order to be more effective in the workplace.

First, how does my own personal style and behaviour impact on the messages that I am trying to communicate to others? Note that it is others and not just staff; for advisory professions such as finance, where senior financial managers often have no direct line responsibility, their key value is in being respected and listened to by others.

Successful managers achieve results through their influence on the decision-making and action of others. Effective leaders can positively affect all relationships – with staff, peers, subordinates, external contractors, regulators, advisers, suppliers, customers and others. Building positive relationships is critical for these leaders in adding value within their organisation.

Second, how is my message being heard differently by others? As an example, a leader who is more comfortable in group situations and has a level of extroversion may embrace teamwork and assume that, given the opportunity, others will also speak up and provide their opinion. However, there are people who are less comfortable in these situations and will require the leader to ask them their opinions directly and encourage their contribution. If this does not happen, they will listen but probably remain quiet, keeping their ideas to themselves. This can result in some participants not contributing their best and even disagreeing with decisions made, so leaving the session demotivated.

Third, the reflective leader always asks ‘why?’ Leaders should constantly question the way that activities and processes work within their organisation. Not necessarily in a desire of change for change’s sake, but in keeping an open mind that there may be a better way. In a rapidly changing work environment, what worked yesterday might not work today.

Many organisations feature team development as part of their leadership training. This complements the traditional development of communication skills by attempting to open up relationships between individuals who need more effective interaction. The belief is that the more we open up to others, the greater our willingness to engage with and trust them.

This investment can fail if people feel that their personality or perspective is not understood and incorporated into team development, and the underlying negative opinions they have about each other remain in place. So it’s important to go beyond the surface and deal with any incorrect beliefs about the motivations of others in order to build trust.

Effective teams are the sum of their parts – they work because of a combination of personalities and skills. If a single member of the team changesthe dynamic of the whole team will need to reframe its reality. This is why teams tend to become less effective as members leave. Team building is not a linear process and the traditional four-step model of “forming, storming, norming and performing” cannot build sustainable teams.

Team development must be a continuing process through which effective interaction between key individuals is sustained and tested in operational reality. This will help sustain the dynamic of the team and its efficiency when individual members change, as illustrated in Figure 2. Instead of the traditional four-step linear process, the improved approach is a six-step continual process.

While management skills can be developed, as they focus more heavily on process, leadership skills are more challenging. Traditional approaches to learning desired competencies are taught through developing issue awareness rather than behavioural awareness. As a result, the role of one-on-one coaching and the development of the individual and their own self-awareness is often assumed rather than structurally developed. Many organisations see the time required to develop these soft skills related to individual personality and behavioural awareness as a waste of time. Yet this investment is strategically critical and a core component of corporate culture.

Corporate culture and leadership are closely intertwined. Failure to deliver on a desired corporate culture is often caused by a gap between what we say and what we do. Ensuring that leaders deliver on their promises is what gives statements of intent such as corporate values or codes of conduct meaning. Developing effective leaders must start with commitment to a shared purpose and way of behaving. The process of leadership development is outlined in Figure 3.

Ultimately, leadership development is a process involving several discrete stages that build an individual’s capacity and awareness to create and strengthen their leadership capability.

There is no cookie cutter approach to leadership development because leadership is, ultimately, a situational skill impacted by several factors. These include the leader’s own personality, the task at hand, the culture of the organisation and the personalities of team members.

The effectiveness of the team determines the effectiveness of the tasks being performed. A reflective leader constantly assesses their own behaviour, as well as the effectiveness of their organisation and their efforts to complete the tasks required. Through this, they can develop the basis for continuous improvements and lay the groundwork for a constantly learning organisation.

Corporate culture is the crucible within which all corporate and collective activity takes place; individuals who are reflective in their leadership approach will provide a key strategic advantage and build a sustainable business model. Too often organisations focus on developing improved approaches to tasks rather than the capability of those who enable people to achieve the desired outcomes. This is a key invisible asset that forms the intangible value or goodwill that exists in high-performing organisations.

• Build high performance through effective leadership, Business & Management magazine, March 2019

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