Leading high performing organisations in a dynamic and uncertain world

Some say the only certainty in life is change. On the horizon shimmer impending challenges that will shake up the way work is done. Disruptive technologies, automation, increased globalisation and competition, an ageing workforce, and economic rationalism are already exerting effects on business. In a dynamic and uncertain world, organisations must equip themselves to be agile, adaptive, and resilient.

Adapting to respond to the pressures of their operating environments, Australian organisations need to engage in more frequent and extensive organisational change. There is a need to undertake transformative change such as mergers, downsizing, and restructuring. Additional changes that organisations need to successfully navigate include:

  • Innovative ways to redesign work, retrain/reskill, and transfer skills between workers.
  • Increased utilisation of contract or contingent workforces.
  • Maintaining a positive workplace culture, high quality communication, and high levels of safety/quality/productivity in light of an increasingly diverse and distributed workforce.

The changing workforce—with increased diversity of age, gender, national culture, and vocational background due to career changes—represents opportunities and strengths for organisational performance. When managed well, diversity can increase company performance (Gilbert & Ivancevich, 2000). However, diversity can also increase conflict and may require adaptation of practices designed to increase safety capability, such as supervision, inductions, and training.

Increased organisational complexity (through new technologies and processes) means that traditional ways of operating efficient, safe, and reliable operations are fast becoming redundant (Hollnagel et al., 2015). For example, safety management is dominated by activities that seek to decompose how things go wrong (i.e. safety incidents), attribute cause, and constrain/restrict the variability of operators’ performance. Yet, as organisations become more complex and dynamic, traditional approaches to risk management will become less acceptable. A new movement is growing—one that aims to supplement reactive and blame-focussed strategies with positivist principles of resilience engineering.

Furthermore, economic strain and uncertainty present additional challenges. Business functions deemed less essential, including safety and human resources, are typically the first to experience budget cuts. This is especially true for small business, where cost sensitivity is greater. Other actions such as outsourcing will continue to apply pressure on managing safety and quality throughout the supply chain.

A landmark study by the Centre for Workplace Leadership has found many if not all of these challenges can only be overcome through investment in human capital, and in particular leadership.

The Study of Australian Leadership (SAL; Gahan et al., 2016) has established a new benchmark in national leadership capabilities, and is the most comprehensive study done to date. Responses from over 8,000 respondents from 2,700 organisations reveal the importance of high quality leadership for company performance across a range of indicators— most notably, productivity, innovation, and employee engagement. The study also highlights significant gaps in leadership capability. If not addressed, these gaps will impair future performance and reduce the ability of organisations to overcome business challenges that are steadily growing in scope and intensity.

Most importantly, the SAL identified key findings that emphasise the importance of high quality leadership. First, leadership improves company performance generally, and more specifically, leadership is critical for innovation. Leaders also enable human capital—a competitive advantage that is difficult for others to emulate. Finally, although leadership capability is important at managerial levels and above, frontline leadership is equally important given their role in shaping the way work is done and creating a team climate that makes employees strive to achieve organisational goals.

For leaders, organisational changes and challenges will likely have important effects in terms of their capacity to develop a following that supports high performance. The SAL further identified that across our nation, there is a shortage of formal training and development at all levels of leadership, particularly among frontline leaders. It is estimated that for every $10 spent on executive leadership development, only $1 is spent on frontline leaders.

Given the changes and challenges we’ve already discussed, there will arguably be an even greater need for high quality leadership at the frontline—including soft skills that are needed to manage the preparation, implementation, and embedding of organisational change activities. Taking into account the context in which modern organisations exist, we have developed a table of anticipated leadership behaviours that should be targeted. Organisations should consider how development of these capabilities can be supported across industry.

Leadership Domain Example Behaviours
Transformational Inspiring collective action towards a group vision.
Prompting creative problem-solving to novel problems.
Enabling innovation so ideas are translated into capabilities.
Developing high-quality relationships with a diverse workforce.
Translating vision into specific team goals and targets.
Transactional Reconciliation of competing work goals.
Effective reward and recognition to motivate high performance.
Effective discipline and feedback to improve performance.
Servant Acting as an advocate for teams to obtain required resources.
Developing team competencies through informal learning.
Actioning ideas or concerns for continuous improvement.
Authentic Fostering positive relationships that build trust and commitment.
Engaging workers in genuine consultation and involvement.
Promoting psychological safety to encourage open discussion.
Sharing information openly to increase engagement.

Throughout this article, we have explored the landscape of the modern workplace and highlighted the growing importance of managing change and securing organisations from internal and external threats. We have discussed some of the societal, technological, and economic challenges faced by organisations aiming to achieve high performance outcomes.

With these challenges in mind, organisations will require strategies that motivate employees to engage in discretionary actions that help to achieve group goals. Generally speaking, employee citizenship behaviours are those that refer to actions that contribute indirectly to company performance through actions that:

  • benefit the company as a whole, e.g. suggesting improvements to procedures);
  • benefit the team, e.g. helping coworkers to complete tasks safely and efficiently; and,
  • result in superior job performance, e.g. actively participating in meetings.

Studies have shown that one of the strongest predictors of citizenship behaviour is leadership style and in particular empowering styles such as transformational leadership (Ilies, Nahrgang & Morgeson, 2007).

Reinforcing these conclusions, the SAL identified that, although high quality leadership is needed for organisations to perform at their best, there is inadequate investment in development activities, particularly at the frontline level. Without this investment, an organisation risks being outpaced and outsmarted by its competitors.

Interested in undertaking leadership development actions that will future-proof your organisation? Contact us at Sentis. Our evidence-based approach will ensure any investment you make is customised to suit your specific operating conditions and implemented in a way that sustains meaningful positive change.

References

  1. Gahan, P., Adamovic, M., Bevitt, A….van Wanrooy, B. (2016). Leadership at Work: Do Australian leaders have what it takes? Melbourne: Centre for Workplace Leadership, University of Melbourne. Available at: http://www.workplaceleadership.com.au/sal
  2. Gilbert, J. & Ivancevich, J. (2000). Valuing diversity: A tale of two organisations. The Academy of Management Executive, 14(1), 93 – 105.
  3. Hollnagel, E., Wears, R. & Braithwaite, J. (2015). From Safety I to Safety II: A white paper. Denmark: University of Southern Denmark. Available at: https://psnet.ahrq.gov/resources/resource/29228
  4. Ilies, R., Nahrgang, J. D., & Morgeson, F. P. (2007). Leader-member exchange and citizenship behaviors: a meta-analysis. Journal of applied psychology, 92(1), 269.

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