The Impact of Leadership & Culture on Productivity

By: Sattar Bawany, Managing Director, EDA Asia Pacific & C-Suite Master Executive Coach

In recent years, many well-known companies have either disappeared or were taken over. Leadership or rather the lack thereof is believed to be one of the contributing factors to their turmoil. Hence, it proves that capable leadership is a critical element in any organization. An organization depends on leadership to guide them through unprecedented changes. Without proper leadership, even the best and boldest strategies “die on the vine”, and their potential is never realized. The quality of leadership talent determines the fate of the organizations, ensuring that their strategic plans are successfully implemented. It also helps them to prepare for a more uncertain future.

Leadership also impacts the organizational culture, and plays a part in the productivity of the organization. Research has shown that highly productive companies, to a high or very high extent, leadership in their companies raise productivity. Hence, this further emphasizes the importance of effective leadership for a successful organization.

Leadership Redefined

In essence, the heart of the leadership challenge that confronts today’s leaders is learning how to lead in today’s VUCA (volatile, uncertain, complex and ambiguous) business environment, allied with the needs to deal with scale and new organizational forms that often break with the traditional organizational models and structures within which many have learned their ‘leadership trade’. So the basic assumption that past experience is the key for future leadership success is more open to scrutiny than ever.

We believe that leadership is all about the ability to have impact and influence on your followers using the right leadership styles so as to engage them towards achieving your organizational results through both Ontological Humility and Servant Leadership approaches blended with elements of social intelligence competencies and socialized power.

From the above definition, leadership can be viewed as the process of social influence in which an individual (leader) could enlist the aid and support of others (employees, team members or followers) in the accomplishment or pursuit of a common goal of the organisation. It involves using one’s role and ability to influence others in some way, which delivers business results and contributes to the organisation’s overall success.

Impact of Leadership Styles on Employee Productivity

True leadership comes from influence, congruence and integrity. A successful leadership involves the management of relationships and communications within a team, and drives the team towards achieving a specific goal. Leadership reflects on the ability of one to “express a vision, influence others to achieve results, encourage team cooperation, and be an example”. It is important to note, however, that one who is in the formal role of a leader may not necessarily possesses leadership skills nor be capable of leading. Leadership is essentially related to one’s skills, abilities and degree of influence, instead of power.

Leadership style is defined as the manner and approach of providing direction, implementing plans and motivating people. Leadership styles vary with personality and situational need. Understanding the different types of leadership is a necessary first step in leadership development. Each of the leadership styles has an impact on reforming and/or creating an organisational culture.

Research has shown that the most successful leaders have strengths in the following emotional intelligence competencies: self-awareness, self-regulation, motivation, empathy, and relationship management. There are six basic styles of leadership; each makes use of the key components of emotional intelligence in different combinations. The best leaders do not adopt just one style of leadership; they are skilled at several, and have the flexibility to switch between styles as the circumstances dictate.

Each style has a distinct effect on the working atmosphere of a company, division, or team, and, in turn, on its financial performance. The styles, by name and brief description alone, will resonate with anyone who leads, is led, or, as is the case with most of us, does both. Commanding leaders demand immediate compliance.  Visionary leaders mobilize people towards a vision. Participative leaders create emotional bonds and harmony. Democratic leaders build consensus through participation. Pacesetting leaders expect excellence and self-direction. And coaching leaders develop people for the future.

Importance of Employee Centric Culture in Driving Productivity Growth

Putting the customer first has been the mantra of many companies for a long time. But however correct the mantra may be, perhaps it’s time to question the wisdom of it. Some companies already have, that is, put the customer second, after employees. The results are surprising and enlightening – engaged and contented employees and companies cited for their best practices. Moreover, customers are satisfied. This article presents an operating model and proven approach for putting employees first.

Steady, long-term competitiveness requires an organization to be committed to putting employees first and developing quality training programs that are linked to its strategic objectives. Without a true commitment to the employees at all levels throughout an organization, the journey to enhance organizational performance will be an elusive adventure. Quality employees equate to organizational success. Unqualified and poorly trained employees equate to organizational failure.

An organization’s employees have always made the difference between a truly successful organization and a mediocre entity, but it’s amazing how often managers overlook or discount this fundamental recipe for economic survival. Organizations with cultures that focus on their people and that invest in their future will in the long-run, be more competitive than cultures that view employees as mere costs to be reduced in times of trouble.

It is often forgotten that productivity and the economic rewards that go with it are achieved through the people of an organization. A fundamental rule of organizational survival is to put employees first and develop their abilities and skills by establishing a quality training environment.

We give them understanding, help, trust and respect–which are the drivers of employee engagement. There is growing evidence that the range of abilities that constitute what is now commonly known as emotional intelligence plays a key role in determining success in life and in the workplace. Recent research has uncovered links between specific elements of emotional intelligence and specific behaviors associated with leadership effectiveness and ineffectiveness. See Figure 1.

Figure 1 Framework for Employee-First Culture to Drive Productivity

Adapted from Sattar Bawany, “Results-based Leadership: Putting Your Employees First before Customer & Profits” in Leadership Excellence Essentials, Issue 05.2015.

Putting the customer first has been the mantra of many companies for a long time. But however correct the mantra may be, perhaps it’s time to question the wisdom of it. Some companies already have, that is, put the customer second, after employees. The results are surprising and enlightening – engaged and contented employees and companies cited for their best practices. Moreover, customers are satisfied. This article presents an operating model and proven approach for putting employees first.

Conclusion

Leadership undeniably affects organizational performance, specifically employee outcomes and productivity. Job satisfaction, productivity and organizational commitment are affected by leadership behaviors. Leaders, apart from their actions and personal influence, should be empowered to make the critical decisions and keep operations running smoothly and effectively. They also need to constantly keep themselves up to date with the current affairs and situations. It is critical for leaders to be aware and able to identify the new emerging markets, which may present new business opportunities that they could consider venturing into.

About the Author:

Professor Sattar Bawany is the Managing Director & C-Suite Master Executive Coach with Executive Development Associates (EDA) in Asia Pacific. He is also the Chief Executive Officer of the Centre for Executive Education (CEE). EDA is the Strategic Partner of Centre for Executive Education (CEE) in offering a suite of Executive Development solutions in the Asia Pacific region.

References:

Bonnie Hagemann & Sattar Bawany (2016), Enhancing Leadership and Executive Development – Latest Trends & Best Practices in Leadership Excellence Essentials, Issue 03.2016.

Sattar Bawany (2016), “Transforming the NextGen Leaders in a VUCA World” in Leadership Excellence Essentials, Issue 07.2016

Sattar Bawany (2015), “Results-based Leadership: Putting Your Employees First before Customer & Profits” in Leadership Excellence Essentials, Issue 05.2015.

Sattar Bawany (2014), “Building High Performance Organisations with Results-based Leadership (RBL) Framework” in Leadership Excellence Essentials, Issue 11.2014