Recent events in South Africa have shown us some good examples of poor political and business leadership. We could complain about it, or we could use it as a learning opportunity. The pending changes in the South African local government has many lessons for corporate leadership.
In the aftermath of the local elections, we are entering a zone of new leadership alliances and collaboration. This has the potential to draw us into an era of working together. It could also serve to solve problems of poor economic growth, rising unemployment and inequality – if it is accompanied by innovative ways of approaching problems and is focused on meeting consumer needs. Consumers then hold leaders to account.
In business we see a call for greater collaboration. Businesses are facing tough challenges of shrinking demand and an increasingly diverse customer: as a result they are restructuring, undergoing mergers and acquisitions and forming flatter, cross-disciplinary teams.
However, collaboration can be negative if the partnerships are corrupt, exploitative or toxic. This leads to a negative spiral – and not only in government. Business has been exposed for various scandals recently: think of Volkswagen, Auction Alliance, FIFA and various banks, not to mention parastatals such as SAA and SABC.
CEOs are all too familiar with the fallout from breaches of trust, according to the 19th Annual Global CEO Survey by PWC (January 2016). More than half the CEOs surveyed (55%) are concerned about the lack of trust in business today – compared with 37% just three years ago. The challenge facing business leaders is this: are they trusted to help navigate this increasingly complex landscape?
There is a body of research supporting the idea that, when there is a high level of trust in a company, it drives business performance by attracting new customers and retaining existing ones.
Our business leaders need three capacities to work in tandem to rebuild trust: collaboration, customer-centricity and innovation, to hold leaders in balance and to account.
Our leaders are seeking new ways of leading. According to the same PWC survey, 49% of CEOs and MDs will focus their attention on building their leadership pipelines in the upcoming year.
Businesses can better support their leaders to make the required changes. The South African Management Index Report 2015/16
finds that only 63.2% of respondents claim that their company affords them sufficient opportunity to develop their skills as a leader. Managers in this survey also complain that their top managers neither communicate nor lead change effectively.
The change in leaders is a change in leadership identity, which requires support on many levels. These are ways in which a company can support their leaders.
- Create a company-wide leadership identity
- Select and recognise leaders who fit this leadership identity
- Reward collaboration, innovation and customer-centricity (as a part of the top five KPIs and metrics)
- Celebrate failures (only those learnt from!)
- Communicate the purpose of the company widely
- Recognise emerging leaders across flexible teams
- Learn to listen to all stakeholders
- Set up multiple experiments and ‘worksites’ to be innovative and client-centric
- Build on the successes of these collaborative efforts
- Recognise those leaders who have shifted their identities
- Amplify those stories reinforcing the new capacities and identity
- Recognise leaders in all quarters of the business
- View this as a new way of leading, not a change project with a finite end
- Be prepared to ‘let go of ‘ and close that which is not working or serving the new purpose of the business
- Keep an eye on sensing the external changes and shifting customer needs.
All of these changes require courage and grit, but that is one characteristic we are said to have plenty of in South Africa, among politicians and business leaders alike.
Sarah Babb is a ad hoc faculty member at USB Executive Development. Her areas of expertise include leadership in transition, changing leadership identity and organisational change.