Leaders have many important responsibilities in the exercising of their leadership practice – vision, decision-making, strategy, team building and PR immediately spring to mind; yet there is a ‘hidden’ responsibility that might just be the most important of all: company culture.

 

The term ‘culture’ has two sides: one being the ‘cross-cultural’ nature of things. The cultural diversity that is part of every leader’s portfolio whether they like it or not; the coming together of people of different cultural backgrounds, bonded by geography, generations or a shared world-view. The other side of ‘culture’ refers to ‘the way things are done around here’ – in other words, the way in which people within your organization behave. This is the ‘culture’ that we are talking about here.

 

Pieter Koerstenbaum’s organisational model suggests that culture is the leader’s primary focus. This makes total sense yet is seldom the reality. Most leaders focus on strategic formation and execution of strategy, a topic that forms a core part of any leadership development programme and is central to leadership education. Leaders are raised believing that strategy is their main focus and along with strategy comes vision. Of course strategy is important but research has shown that the majority of strategic initiatives fail to deliver on the intended outcomes. Research suggests that only between 10-30% of strategies are ‘successful’ which, given the investment that underpins most strategies, is a very poor return on investment! These are good strategies put together by smart people that raise the obvious question: how then does one account for the failure of these strategies?

 

From the various research conducted into this area, the biggest reason found for this delivery failure is that the company culture doesn’t support the changes envisaged and embedded in the strategy. In other words the people either unwilling or are unable to support the changes being implemented. The strategy might need to change but if the company culture doesn’t make the necessary changes, the strategy will fail.

Business leaders look set encounter manifold challenges in 2014 in the face of headwinds buffeting the local economy, and unrest and uncertainty across the globe.

 

As South Africa enters its third year of a struggling economy, companies need to continue to streamline their operations and take unnecessary costs out of the business. Leaders must deliver seamless strategy execution, innovation and process excellence.

 

The challenge is to spot opportunities locally, and gear up to tackle fast-growing markets in other African countries and overseas.

 

Economic rumbles include a weakening rand, labour union turf wars, corruption, and confrontation between unions and management. Globally, there are energy deliberations, social upheaval, skilled labour deficits, youth unemployment and inequality.

 

South Africa is not alone. Greater specialisation and division of labour between skilled and unskilled people has widened the skills gap at a national and global level. According to a new Oxfam study, 50% of the world’s wealth is in the hands of the 85 richest individuals. Inequality is one of the main issues occupying the minds of delegates at the World Economic Forum’s annual meeting taking place this week in Davos, Switzerland.

 

Within South Africa, there are pockets of excellence where people are doing remarkable things. The fast-tracking of green energy initiatives – supported by government – is one example. Then there’s the R9-billion Square Kilometre Array (SKA) radio telescope – the biggest, most sensitive radio telescope ever built, slated to move from “concept to concrete” this year.

 

In the technology space, we continue to show we can innovate with the best in the world. Space tourist Mark Shuttleworth and inventor Elon Musk come to mind. More recently, a Durban start-up has developed a mobile point-of-sale terminal that allows traders to accept card payments using their phones. And a Midrand entrepreneur is about to launch the first locally-made smartphones and tablets.

What is your ‘next move’ as a leader? Well, of course that would depend exactly on what it is we are talking about, but here would be a variety of topics – and some suggestions as to your ‘next move’.

Global expansion, pressure on resources, governance constraints, technological advances and aggressive competition are placing huge demands on organisations.

 

“Competitiveness and business sustainability are dependent on the quality of leadership at the helm of the enterprise,” says Sandra Burmeister, CEO of Amrop Landelahni. “However, finding, developing and engaging the next generation of leaders demands fresh models and new tools.

How to create a data-based decision-making culture

 

We can learn a surprising amount from animals, as I discovered recently on my first safari trip in South Africa. Consider for example the collaborative relationship between the zebra and giraffe, and the lessons this holds for agile, fact-based decision-making.

 

The giraffe has great height and expansive vision, but it cannot obtain sensory input from the ground. The zebra on the other hand can smell advancing predators at the ground level and see them under trees, but cannot see danger from afar. Conscious of this, the animals forage together, doubly secure in their collaborative defence effort. At the first sight or smell of danger, one will bolt, causing the other to follow.

 

The folly of top-down

By comparison, traditional corporate decision-making falls short in a number of respects. Firstly, corporates tend to make and drive decisions only from a “giraffe’s perspective”, i.e. from the top down. But companies are essentially two kinds of animals foraging together – executives at the top as well as workers at the bottom – and workers should have the ability to influence action based on their unique perspective of happenings “on the ground”.

 

Secondly, since top-down decision-making is a fact of corporate life, companies often make decisions based on opinion rather than on fact. Management and executive committees essentially obtain consensus on what actions are appropriate, resulting in lengthy and sometimes imprecise decision-making cycles. But because the facts are not always visible from the top, the executive relies on people on the ground to relay the summary facts to them, to assemble even more summarised, high-level views.

 

Successful behaviours

Research shows that most successful companies organise themselves in non-hierarchical ways and demonstrate other ways of ensuring participative decision-making. However, this success is not only dependent on fostering a culture of openness and collaboration, it is also dependent on the tools with which all workers use to analyse information and disseminate insights. Since knowledge is power, there is a strong relationship between a company’s treatment of information and the level of empowerment felt among its workers.

 

In the area of business analytics this means empowering workers with information. They must be given the tools to assess the state of affairs as relates to their area of the business, make the decisions based on the facts as appropriate to their level in the organisation, rather than on feeling, and communicate the findings to senior management.

 

This will allow one version of the truth to permeate throughout the organisation, making decision-making less of an argument and more of a fact-based, foregone conclusion.

 

Leopards that change their spots

Unlike their jungle counterparts, corporate animals can change their ways – although not, usually, without some digging in of heels. So how do we overcome the natural resistance to adopting a culture of distributed, fact-based decision-making?

 

• With encouragement from the top, a culture prone to territorialism can turn to openness.
• A willingness to take on responsibility at all levels of the organisation begins with giving people easy-to-use and –understand tools that let them discover the data they need to do their job and communicate answers up to senior management with effective collaboration and visualisation tools. Traditional BI tools do not allow this, as they are focused on reporting with inflexible predefined queries, and require serious skills to operate.
• Fears about data security and integrity often hamper efforts to spread the power of analytics throughout the organisation. But people who object to that perhaps don’t appreciate how widespread distribution and alteration of spreadsheet-based data is. It is important to note that business discovery tools using an app model don’t allow changing of source data, only additions – which, if incorrect, only affects that user. And unlike spreadsheets, apps are automatically updated when source data is updated or corrected via administrative intervention. In addition, the app model provides extra data protection in the form of rights-based access as well as other data security and -integrity measures.

 

Start small

The advice we usually give is to start small with business discovery tools that deliver quick results within a department or even workgroup, and to take it from there.

 

When the penny drops, it will be clear that there is no going back from a fact-based decision-making culture in which a far greater percentage of the organisation shares.

 

If information is power, getting rid of personal information fiefdoms by empowering a larger base of decision-makers will both allow better quality decisions and result in a more engaged work force, enjoying greater responsibility, clout and happiness in the workplace.

Pondering occupation of the firm’s highest office one day? Then it’s time to get commerce-savvy, if all you currently have in your arsenal is people expertise, a survey of SA’s top corporate employers has revealed.

 

In the latest Jack Hammer Corporate Survey, by leading executive search firm Jack Hammer Executive Headhunters, entities polled represented the financial services, FMCG, retail and engineering industries. Asked whether their company would “ever consider appointing a candidate to an MD or CEO role, from an HR-focused background and with limited commercial experience”, the answer was a resounding “no” from 9 of the 10 respondents.

 

Only one organisation said that someone with Human Resources expertise and focus would be considered – but then only if they’d had responsibility for a P&L, and had displayed commercial talent.

 

Yet interestingly, when asked about the importance of skills, leadership and management (which implicitly require very strong people orientation) people expertise are always ranked at the top of the list.

 

“It is clear then that while a people focus is highly regarded, and a key requirement for someone who is going to be the head of an organization, without a demonstrable track record of having been accountable for commercial issues such as revenue generation, profitability, cost controls, etc, it is unlikely that even the most extraordinary human capital executive will make it to the corner office,” says Debbie Goodman-Bhyat, MD of Jack Hammer.

 

“It is evident that the HR discipline is still regarded as a ‘soft skill’, even though organisations with great human capital strategies are clearly highly competitive in all respects. Nevertheless, without the above-mentioned experience, and some kind of commercial qualification or MBA, the HR exec’s route to the top job is most likely going to reach a cul-de-sac,” notes Goodman-Bhyat.

 

She says that internationally, it would not be unheard of for a philosophy major to land a major position, as employers were more accepting of diverse backgrounds, and able to absorb unusual thinkers bringing new dimensions to the workplace. However locally, a classic commercial education continues to be the non-negotiable.

 

“SA’s top corporates continue to seek the stellar numerical and analytical abilities essential to interpreting facts and figures, even if it may sometimes come at the cost of being better rounded in the workplace, with highly developed communication, creative problem-solving and critical thinking skills.

 

“That’s not to say that commercial savvy and financial acumen are not essential tools in a business leader’s kit – they certainly are. But South African corporates (and their boards who are answerable to shareholders) are extremely risk averse when making CEO appointments, and are unwilling to back strong leaders who don’t fit a ‘typical’ profile”.

Conflict is an inevitable and potentially valuable part of human existence. Yet most of us are ill-equipped to deal constructively with differences, whether in the personal, political or organisational context. For example, a 2009 UK survey of over 600 senior business people revealed that only 37 % regarded themselves as being adequately trained to cope with business conflict. Just how prevalent conflict is, is demonstrated by another UK survey in 2008 which found that the average UK employee spends over two hours a week dealing with conflict, which meant in total more than 370 million working days were lost in the UK the previous year alone. Middle managers in organisations experience most role stress.

Stress leads to conflict, which leads to stress. A recent WHO study found that of the 1.6m people on average who die per year as a result of violence, 55% were as a result of suicides. Given high levels of conflict in South Africa generally but also in the typical SA workplace, chances are that the situation is, at best, similar here. In fact, our experience working with many organisations in both the private and public sectors suggests that many organisations are indeed in distress. Low levels of trust, uncooperativeness, high levels of staff turnover and low productivity abound.

Given a world that is full of conflict and a human race that tries to resolve it without the necessary skills to do so, it is no wonder that we seem to struggle along from one conflict situation to the next without seemingly progressing to a point where we can resolve our differences peacefully, quickly and cost effectively.

A general lack of conflict resolution skills is not the only cause. A big contributor is our view of conflict is something that must be avoided. Because of this, it is no wonder that when we see conflict we either fail to deal with the issue, or we go into attack mode, using whatever power or legal remedies is available to us. Link this to a general unwillingness to listen to those who have different views to our own, and the way many of our so-called ‘service delivery protests’ develop and turn out starts making sense: instead of pro-actively seeking joint solutions, the police are called in or recourse is taken to the courts to stop the protests. These only provide short-term relief, however.

If and when the people concerned are listened to, relationships are already at a low ebb, making the search for constructive and cooperative solutions difficult and sometimes even impossible. Yet, as one of the early pioneers of conflict resolution, Mary Parker Follett, once said: “It is possible to conceive conflict as not necessarily a wasteful outbreak of incompatibilities, but a normal process by which socially valuable differences register themselves for the enrichment of all concerned”.

One challenge therefore is to begin to see conflict not only as inevitable but also as a potential opportunity to resolve differences, find common ground and strengthen relationships. Within organisations this translates into becoming conflict wise, i.e. harnessing the power of conflict to promote understanding, cooperation and growth.

In Jim Collins’ best-selling book, Good to Great, he recalls how the 11 “great” organisations (they had each delivered cumulative returns at least 3 times greater than the market over a 15-year period) all displayed a similar approach to dealing with conflict: “All the good-to-great companies had a penchant for intense dialogue. Phrases like ‘loud debate’, ‘heated discussions’ and ‘healthy conflict’ peppered the articles and interview transcripts from all the companies”. A 2003 UK survey of top management teams also found that the more productive ones treated conflicts as opportunities for collaboration to achieve the best solution for the organisation as a whole.

Another obstacle is the mind set with which we usually approach differences: we assume that our interests are necessarily in conflict with those of people we contend with and therefore fail to exploit the common ground and collaborative opportunities that most often do exist and instead take up opposing positions to engage in a tit-for-tat battle for supremacy.

Take the ‘Spear’ issue, for instance: the debate almost immediately started off with opposing, extreme demands, one for protection of individual dignity and the other for protection of freedom of expression. The ‘frame’ going into the debate was one of opposing and irreconcilable differences that could only be resolved through the use of power (sometimes violence) or the decision of a judge. Eventually a solution of sorts was found. Yet, despite the subsequent political hype about a resolution having been found, the damage had been done not only to relationships and reputations but also to our young democracy and its institutions. Instead of approaching our differences from a narrow winner-takes-all mind set where the goal is victory and not agreement, we have a choice to view differences in the way Parker-Follett suggested at the turn of the previous century.

Poor leadership or outdated leadership models also contribute to our inability to effectively deal with differences. Instead of inclusive leadership styles that would allow decision-makers the chance to hear others’ concerns, viewpoints and suggestions before making a decision that affects them, our politicians and captains of industry promote the outdated idea of ‘decisive’ (i.e. exclusionary, power-based) leadership. Business schools are sometimes to blame as well because of the kind of profit-driven rather than a stakeholder relationship model of leadership they promote. As a recent article in the California Management Review notes: “The emphasis on analysis has produced a generation of MBA’s who are critters with lopsided brains, icy hearts and shrunken souls”.

There are no doubt many other contributing factors, some of which we have little or no control over. However, we do have control over things like our willingness to listen and not just hear; to move away from apathy to action; to stop being victims and instead become masters of our own destiny; and, most of all, over the attitudes that we bring into those difficult conversations.

It is perhaps apposite to end off with this powerful reminder from Parker-Follett, written shortly before her death as war clouds started gathering yet again over Europe: “We have thought of peace as passive and war as the active way of living. The opposite is true. War is not the most strenuous life. It is a kind of rest cure compared to the task of reconciling our differences... From War to Peace is not from the strenuous to the easy existence; it is from the futile to the effective, from the stagnant to the active, from the destructive to the creative way of life. The world will be regenerated by the people who rise above these passive ways and heroically seek, by whatever hardship, by whatever toil, the methods by which people can agree.”

Prof Jordaan is head of the Africa Centre for Dispute Settlement (ACDS) at Stellenbosch University. The Centre forms part of the University’s HOPE Project, a campus-wide initiative through which the institution uses its teaching, research and community interaction expertise to seek sustainable solutions for pressing challenges in South Africa and the rest of the continent.

There is no doubt that leadership in both the public and private sector this year has been fraught with upsets, tension and change. Questions have been asked as to the leadership of the country, and whether there is something larger at play under which our country and private sector’s leadership is buckling. Reasons for the changes in leadership both in the public and private sector may be varied and complex, pre-determined or arranged, political or economic.

 

In the mining sector, a faction of changes in leadership has been brought on, with various platinum mining executives announcing their departure from the sector, as well as senior executives announcing the axing of staff and management in order to save costs. Aquarius Platinum CEO, Stuart Murray, for example, was the third chief executive to buckle under the economic pressure caused by the uproar in the sector, especially in the face of the continual pressure of issues to deal with such as labour, the Government, safety stoppages and rising costs.

 

We recently also saw Pinky Moholi, Telkom’s group CEO, resigning, along with board director Neo Phakama Dongwana, after heading up the parastatal for the last 18 months. Moholi’s resignation follows that of Lazarus Zim, who announced he would step down as chairman last month.  Currently it seems there are eight vacancies at senior management level at Telkom. Interestingly, no other Telkom CEO, other than Sizwe Nxasana, stayed for the duration of the contract.

 

In South Africa the changing of the guard occurs many times due to the natural ‘retirement’ age being reached as well as appointment contracts coming to an end.  This is what happened, for example, when Pieter Uys stepped down in March 2012 after two decades at Vodacom and was replaced by Shameel Joosub as Group CEO.

 

Others leave because of promotions to different positions or sectors.  In Government, for example, the recent appointment of Minister Naledi Pandor to the home affairs portfolio resulted in the deputy minister Derek Hanekom being promoted to full minister at the Department of Science and Technology (DST).  Minister Pandor’s move, however, was in turn as a result of Minister Nkosazana Dlamini-Zuma taking up the post of Chairwoman of the AU Commission.

 

Similarly, in April, in the private sector, Gert Schoonbee was appointed as managing director of T-Systems because the former MD, Mardia van der Walt-Korsten, was asked to move into the higher ranks in Africa because of her exceptional leadership.

 

While these may be part of natural processes, other leadership changes occur when the leaders are alleged to be involved in activities untoward to the organisation he or she belongs to. Julius Malema, for example, was replaced as president of the ANC Youth League due to his controversial utterances against Jacob Zuma, and bringing the ANC into disrepute.  In 2008, the somewhat controversial recalling of Thabo Mbeki by the ANC resulted in Jacob Zuma being elected as president of the ANC, and the country, because of the electoral processes of a political party.

 

In sport, whether in rugby, soccer or cricket, we have seen changes in leadership at different levels in South Africa, from a coaching level to CEOs.  Again, with questions raised, responses went from a lack of competence to unethical behaviour to end of contracts.

 

There are also a number of categories one can create for leadership changes – some more regular and prevalent than others.  There are the ‘job-hoppers’ moving from one position to another position, mostly exchanging one CEO or executive position for another.  I am sometimes of the opinion that the reason for such rapid changes is to ‘leave before they discover my incompetence.’  Much of the blame for people getting away with this is that too many companies are desperate for the ‘next affirmative action’ person and therefore do not do such a thorough screening.  I wonder if this could perhaps be a sign of Mamphela Ramphele’s ‘lack of maturity’ observation.

 

I have also wondered how many leadership positions changed hands because of persons wanting to get back to South Africa, a specific province or city.  Friends, family and colleagues often assist with the creation of leadership possibilities in companies and government. 

 

Almost all the areas of our lives are impacted upon by people in leadership positions. Interestingly, we do not always recognise effective leadership, but we always know when it is absent. There is no doubt that leadership in South Africa is changing, and so it is worthwhile remembering Heifetz and Linsky’s quote from Leadership on the Line, “In times of rapid change, leaders pretend they know what the answers are, leading people into a systemic dynamic where no one is asking the right questions and playing by outdated rules.”

Mark Twain famously remarked, “Buy land; they’ve stopped making it”.

 

The same theory applies to leadership. There isn’t enough of it to go round and we can’t just make it.

Leadership isn’t just providing a flag for people to run to. The flag is useful in that it provides a single rallying point, but the rallying point has to be a sensible one. It would be pointless asking people to gather behind a policy which doesn’t work. In other words, your leadership has to be informed by knowledge of the “system” which you are trying to manage or condition ... or even control.

 

There doesn’t seem to be a lot of great leadership around anywhere right now. In South Africa we have miners dying for lack of leadership. You can, of course, argue about the nature of that leadership failure - whether it is that of the mine owners, or the miners’ leaders, or Julius Malema arriving with the ideological cavalry after the battle. Or you might ascribe it to long term leadership failures by the national administration, but however you slice it, at Marikana people died and better leadership - somewhere – would have stopped it.

 

Perhaps mine managers didn’t understand the motivational dynamics of their workers, what is known as the “psychological contract” between employer and employee. Possibly, national and regional leaders were unaware of the system of tensions developing in society. It sounds a technical issue, but the effect is to dilute, to defocus leadership. That’s not a purely technical issue.

 

People died.

 

Europe is different, but you can see it there, too. The national leaders are, after a shaky start, providing a single focus for action, clear agreed policies for economic, financial and monetary reform. Good. Nice bit of flag waving. The only problem is they don’t know whether the policies proposed will work. Why not? Because no one knows what is happening in the economic or financial system. There is huge disagreement about the causes of the recent financial catastrophe. One can argue that the fundamental causes were (variously): national over-burden of personal debt, bankers’ greed; regulatory failure; political over-influence on free–market mechanisms… I could go on. The issue is that the leadership thing, the flag waving, only works if you know what’s going on.

The very system of economic and financial stability has changed. We all thought that the pre-2007 regulatory and motivational assumptions would provide a stable financial system. The fact is that they could provide stability, but in some circumstances didn’t. Just a change of one letter…would to could.

Unfortunately the change from definite stability to conditional stability alters the whole set of assumptions that underpin the policy around which we are expected to rally. The leadership, in the narrow sense of providing focus for frightened investors and tax payers, is illusory. It is not underwritten by a sound view of the world. It is as if Europe were rallying to a flag placed in a quicksand.

 

The different stories of Europe and South Africa show that to lead effectively you need two strengths. Of course you need that personal knowledge and awareness of your effect on others that really good leadership and management programmes offered by business schools give you. World class leadership programmes, including MBAs, require you to engage in long periods of self-reflection, guided by older colleagues. You engage in theory of course, but the real strength of these programmes is that critical self-awareness. Leadership in that sense is no accident.  Madiba wasn’t born a leader so much as being made one by his long walk to freedom.

 

But because leadership cannot be effectively exercised without knowledge of the system you seek to lead, business schools place leadership in a context of business knowledge. Military colleges place it in the context of operating armies and navies. Merchant ship captains learn their leadership in the context of navigation and ship management.

 

So you can’t buy leadership. But you can invest in the personal and technical skills which bring out your own innate qualities and capacity. If more leaders in Europe made that investment we may have had fewer headless chickens running financial policy over there and, here in South Africa, we might very well have had fewer people dead at Marikana.

I was recently following a conversation on LinkedIn about BEE and whether it has failed or succeeded and found it to be such an interesting conversation - more so because all of the participants of different gender, races and ages, were fundamentally agreeing with each other.

Unfortunately they were so quick to argue that they didn’t realise their agreement until much later on in the discussion, and their argument made me realise that South Africa as a nation seems to be doing exactly the same thing.

The issue of empowerment needs to be about increasing the number, value and size of opportunities in South Africa. The principles of BEE are about including all South Africans in the ability to access the economy. This means equal education, equal rights, and equal access to entrepreneurial, corporate or informal employment. Most importantly though, it means choices and economic freedom that is directly related to how hard you work and how committed you are.

All of this is achieved remarkably well in a growth economy, but less so in a struggling economy. South Africa is identified as an investment risk by so many countries in the world due to various factors, but mostly skills shortages, the perception of restrictive regulation and lack of clarity around the leadership of the country.

Many South African companies are downsizing or shutting their doors due to poor economic growth and decreasing profits. How does one focus on anything other than survival when the world faces recession? The recent mining strikes are a classic example of how the poor need more than the back-breaking challenges of employment opportunities just above the poverty line. However, to negotiate better working conditions for our poor we need to showcase South Africa as a politically stable, economically robust, attractive investment destination.

On the back of increased interest in investing in SA and a willingness to negotiate the terms of investment in order to access an attractive market, so too lies our ability to negotiate empowerment commitments, investment in skills development and training and increased social and developmental investment.

So many multinationals are competing with South African businesses globally, so many countries in the world are supporting their SMME markets to export globally as a means to reduce the impact of global recession. By contrast, in South Africa, we seem to be so internally focused on pointing fingers at our inadequacies and frantically trying to grab at the crumbs that are left of the economic pie that we have stopped trying to increase the size of the pie. We seem to have turned on each other when, in these economic times, we should be supporting each other as a united collective, to survive economic turmoil.

Where is the growth strategy? Where are the commercially-linked educational programmes? Where is the commitment to mentorship and skills development in critical skills shortage areas such as energy, renewables, nuclear, mining, construction, engineering and medicine? There needs to be a structured strategy, but the key issue of BEE is fundamentally one of economic and social transformation. Therefore, it should consider all South Africans.

How do we ensure that all South Africans participate in an environment of growth, stability and opportunity? How do we ensure that the majority of South Africans have access to the mainstream economy and all that comes with it? It requires collaboration. It requires us to seek solutions, to be proudly South African and part of rebuilding not only our reputation but our national pride.