You know Steve Jobs; in other words, Mr. Innovation, he told that “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you, how you’re led, and how much you get it.”
This shows the business and leadership strategy of Steve Jobs. He defined the critical importance of the people, their qualifications and management style. This is completely right. We have a well-known Turkish proverb, “Balık baştan kokar”, “Fish smells from head.”
Please note that there is no magic formula to manage effectively a business. It needs great experience, knowledge, right skills and competitive intelligence. Therefore, leaders and managers have to develop their leadership and management capabilities in accordance with the current and future changes in technology, services and customer needs for today and tomorrow.
Clearly, a right mix of inspirational and effective management skills and practices is a crucial success factor on organizational performance in terms of productivity, growth, profitability, sales, customer value, survival and competitive innovation capability.
“Winning companies win because they have good leaders who nurture the development of other leaders at all levels of the organization” – Noel Tichy.
A research study published by Chartered Institute and Penna in 2012 showed that investing in leadership and management development programs have a direct effect on the overall organizational performance. This survey based on the information from 4500 managers that includes 300 CEOs and 550 HR managers.
This survey shows that highly qualified senior leaders can create 21% difference in people performance and 23% difference in organizational performance.
Companies who had high innovation effectiveness had a 76 percent product success while others created only 54 percent.
Highly innovative companies achieved better sales (48 percent) and profits (49 percent) from new products while their less innovative peers had 21 percent in sales and 21 percent in profits. Look at the difference!
I believe that better qualified leaders and managers are linked with the better qualified workforce and performance. Highly qualified managers create more innovative capability and excellence in business.
Dr. Ali Anani defined the crucial importance of truly effective leadership as “A leader is like a character in a book- either h/s develops experience love-taking or experience love-leaving. When the "followers" feel the leader is the character they love they have polarity in their hearts to be in the leaders' heart and be genuinely immersed”. This shows the importance of the employee engagement and the development of the leadership and management skills.
It is clear that leadership and management capability undermines the productivity and innovation capability of the organization.
I like the Doug Wilson description about the main purpose of the management as “ The first major purpose of management is to build a foundation and structure necessary for people to experience success. This means management must build aligned infrastructure (processes and systems, rewards and capability development) that provide a solid base for producing and delivering the organization’s services and products”.
I have some questions to the employers and senior leaders:
- Did you evaluate your leadership and management skills?
- Are they competitive?
- Do you have competitive productivity, profitability and growth in your business to survive in the long-term?
- Do you provide regular training and development programs to your leaders, managers and employees? Are they effective?
- UK businesses have a cost of £19billion per year in working hours.
- 43% of managers rate their leaders as ineffective and only one in five is qualified.
- 75% organizations have poor management and leadership skills.
- Poor management and incompetence of company leaders causes 56% of corporate failures.
Now I will summarize the business benefits of effective leadership and management;
1- Improved business performance in organization
According to my experience and knowledge in pharmaceutical and Agri-food industries; leadership and management capability is one of the crucial success factors in today’s hypercompetitive and uncertain business world. If companies want to create more transient competitive advantages and survival, they have to improve their leadership and management capabilities. So that, they can achieve;
- 23% increase in organizational performance.
- Significant increase in employee engagement.
- A single point improvement in management practices creates an output as a 25% increase in the labour force or a 65% increase in the invested capital.
When I was working with a company in Gaziantep, we increased organizational performance and achieved a 40 percent increase in the productivity. This created a huge cost saving to the company. The main cause of the low productivity was the poor leadership and management capability.
I believe that a company’s long-term success is dependent on developing the leadership and management skills. Therefore, employers and leaders have to take responsibility for ensuring that their leaders’ and managers’ skills and capabilities are effective and aligned to the overall business strategy.
2- Improved employee performance in the organization
Clearly, I have to say that employee wellbeing is very important in employee performance. I know that excessive workload, internal politics, management style and uncertainty contribute stress at work.
Dr. Serhat Tatli has a great insight about the uncertainty as “The negative consequences of uncertainty for psychological well-being are largely due to the feelings of lack of control that uncertainty engenders. This lack of control leads to negative consequences, such as anxiety, psychological strain, learned helplessness, and lower performance. All of these negative consequences might affect motivation of the members of an organization in the negative direction leading to a lower level efficiency or effectiveness.”
This stress is the main cause of the musculoskeletal problems in employees. For example, in England, employees lost 13.4 million working days per year due to the their absence in the job. Stress related absence was 21 days per year for an employee. I saw similar situations in different companies and they lose a lot of money due to the poor productivity in the areas of manufacturing operations, maintenance, safety, supply chain, quality, sales and marketing. They had a lot of stress due to the poor management of their line managers, managers and leaders.
I know that employees are motivating each other and they create a passive and a silent campaign against the management. This situation causes disengagement, low productivity, quality failures, higher safety cost and poor customer loyalty.
I believe that employee engagement is about establishing mutual respect in the workplace for what they can do and be in accordance with the needs of the job and business.
For example, engaged employees take an average 2.69 sick days and disengaged employees take 6.19 days per year. This creates a cost of £19 billion a year to the UK economy. Now, please look at your company! Calculate the cost per year.
Engaged employees know the importance of the customer needs as 70 per cent, while disengaged employees know the customer needs 17 per cent. How can you produce quality products or services in this situation? Social media is there and the news can be your end in one day!
Please note that engaged employees are loyal and they are 87% less likely to leave the company than the diseanged employees. How is the situation in your organization?
I know that some companies have high turnover and this creates a lot of cost to them.
I have to define that the main cause of the poor employee engagement is the joint and consequential failure of leadership and management in the companies. Now evaluate your leaders, managers and HR policy!
Inefficient managers are responsible for time lost for employees at least 2 hours per week in the UK. The main reasons for time loses are worst management practices such as;
- Unclear communication from manager, 33 percent.
- Lack of support from manager, 33 percent.
- Micro-management, 26 percent.
In the UK, a company loses £900 per employee per year. It’s impact to UK economy is £19 billion in a year. Clearly, all of these prove that companies fail to effectively implement leadership and management development activities and this sitaution contributes more business cost in the long-term as a failure.
Why does your company continue to underperform?
- Your managers are less qualified. Please note that only <20 percent of managers are highly qualified in business organizations.
- Your managers are under-trained. I know that some employers are providing management training to the managers. The ratio is less than 30 percent in Turkey. This value is 34 per cent in the UK. It means that only 45 percent of managers are taking management training.
- Your managers lack key skills. The shortage of the key skills, poor morale and poor leadership create poor performance for companies.
- Leadership and management skills are not applied strategically in the workplace.
- Employers feel that training and development programs do not meet their needs in the business. The main reason is that many of them are given by people who have not real and practicle experience and know-how in business.
- Many employers are not clear about the specific leadership and management skills and behaviours that support innovation capability, engagement and wellbeing to create competitive customer value in their business.
When we look at 10-year analysis study (Global Innovation 1000 - 2014) published by PwC, we clearly see that innovative companies focused on two areas to raise their innovation game;
- Business capabilities.
- Organization and process.
- Developing and implementing innovation portfolio through aligning with customer needs and wants.
- Effective talent management, and developing and retaining right people.
- Ensuring that innovation leaders and business leaders are aligned and organizational alignment is being competitive.
If the most senior leader has a strong innovation culture and skills, the number of the transient competitive advantages will be more due to the leader’s strong personal commitment to the creativity, inspiring capability, creating suitable conditions for innovation and ability to execute the innovation in the organization by taking more information from the external developments in the technology, service, products and customer insights through making competitive intelligence regularly. How can it be? I know that internal and external training and development programs can be the best choice to develop new capabilities to see change coming and to develop the appropriate competitive leadership and management skills.
How can we do these?
“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds.” –Jack Welch
- Leadership and management skills create competitiveness. Truly effective leaders and managers and more specifically their management skills are crucial parameters to ensure high performance working, competitive productivity, growth, profitability and customer loyalty in today's global business world.
- The continuing ability to absorb and mobilise new skills and opportunities through development of leadership and management skills has to be performed by senior management to increase its innovation ability.
- Companies must be able to convert intellect, knowledge and technology into things that customers want. Who can do this?
- Therefore, improving leadership and management skills is a key to provide excellence in business and it is a high priority issue for immediate action!
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Yusuf Tokdemir is a business advisor, entrepreneur, innovation consultant, growth strategist, keynote speaker, founder of Chocolat Garden Chocolatier and Innovation Turkey.
He has a proven track record of success in multi-industry.
Innovation Turkey is an Innovation Management Consulting and People Development Company. It collaborates with the companies for people and leadership development, new product design, new service design, new business design and organizes seminars and workshops on innovation management and productivity to achieve competitive commercial outcomes. If you want to solve your issues please call me!
Chocolat Garden is an artisan chocolatier that produces highest quality handcrafted fresh chocolates from 76% Ecuador extra fine dark chocolate for chocolate lovers. We deliver your orders in 3 days.
Innovation Turkey olarak şirketleri acil ihtiyacı olan verimlilik, büyüme, karlılık, yeni ürün geliştirme, yeni iş geliştirme, personel geliştirme, yönetici koçluğu vb alanlarda ihtiyaçlarına yönelik çözümler üretiyoruz. Ticari kazançlarını artırıyoruz. İlgili konularda seminer ve workshop düzenliyoruz. Şirketinizin ihtiyaçları konusunda lütfen arayınız!
Chocolat Garden prestijli, premium, nefis, el yapımı, taze, günlük çikolata üretmektedir. %76 Ekvator ekstra fine Ekvator bitter çikolata ve en kaliteli doğal hammaddeleri kullanmaktadır. Ürünlerde koruyucu vb yoktur. 3 gün önceden alınan siparişler güvenle adrese teslim edilir.