Achieving the Standard:the role of leadership

05 March 2005

Why do CEOs (business leaders) fail?

Why do CEOs Fail?

“You’d never guess it from reading the papers or talking to your broker or studying most business books,but what is true at most companies where CEOs fail - weestimate70% - the real problem isn’t the high-concept bonersthe boffins love to talk about. It’s bad execution. As simple as that: not getting things done, being indecisive, not deliveringon commitments”.

Charan and Colvin 1999

What are the core processes of execution?

• Strategy process:

“defines where a business want to go”

• People process:

“ defines who’s going to get it there”

• Operating process:

“ provides the path for those people”

Three core processes of execution

Bossidy & Charan (2002)

Three core processes of execution(cont – The people process)

• “The people process is more important than either the strategy or operations processes. After all, it’s the people of an organisation who makes judgments about how markets are changing, creating strategies based on those judgements, and translate the strategies based on those judgments into operational plans: If you don’t get the people process right, you will never fulfil the potential of your business”

Bossidy & Charan (2002)

What then is the most important task of business leaders?

To create a context to perform in

“Creating an energised environment in which people understand exactly what they are aiming at, their progress is gauged and rewarded, a strong sense of purpose is experienced and a culture of congruence (talk and walk is aligned) is enjoyed, while at the same time meaningful personal growth is taking place”.

Burger and Erasmus 2000

What needs to be achieved to make the IiP standard?

Four themes(emerging from the 12 indicators)

• Clear organisation objectives• Understanding of the objectives by the

employees• Individual development aligned with

objectives (supported by leadership)• Recognition and reward of contributions

in line with objectives(To improve individual, team and

organisational performance – execution)

Who is responsible for making the standard?

What did employees say about their leader? Overview

(AllPay Consolidated Investment Holdings (Pty) Ltd)

• The MD of AllPay does the following:– Communicates and explains the AllPay strategy

extensively – face to face (also to service providers)– Think about what needs to be achieved by AllPay and

then contracts contributions of individuals accordingly

– Provides candid feedback on progress (always in an uplifting way, emphasising the value of the individual)

– Coaches employees to close gaps– Provides development/learning opportunities– Provides monetary and non-monetary (intangible)

recognition and rewardsHe spends time with his people

What did employees say about their leader? - Detail

(AllPay Consolidated Investment Holdings (Pty) Ltd)

• Dirk leads by example by developing himself and making his assignments available to all to apply in the company.• In strategy setting there is a major focus on learning and growth perspective.•  He has been awarded a gold award for leadership at the Absa Prestige Awards in 2003• On a one-on-one basis he motivates staff to compile a self development programme.

• Create opportunities for self-development, even though it’s your own responsibility to identify relevant training interventions/courses.• Entrenchment of “Leading the AllPay Way” as key driver and business goal Necessary focus on all relative People Management i.e. Learning and Growth Perspective in AllPay Consolidated and each subsidiary’s Business Plan. • Measurements performance against target.• Strive to and ensuring people satisfaction results are used as business tool to address / correct areas for improvements. Raising the bar and continual improvement cycles

• Firstly it is the trust that Dirk places in one to perform. Allowing a person to continue on their own without interference, yet backing you up on a decision made, if required to. Providing guidance and support.• Believing in a person’s ability, when others question your ability.• Pushing a person to achieve more and to make more of yourself.• Building on strengths and weaknesses. - In a subtle way, taking a weak point and forcing one to improve on that point without you knowing his intention. If I can elaborate on this one. In the very beginning, I had a problem of talking in front of people or doing a presentation. It was easy for me to sit back and allow Dirk to do the presentation. Then one morning, we were having big session with the Department and I was not yet in the position, but Dirk, five minutes before the presentation was due to start, advised me I had to do the presentation. I was extremely nervous and battled a bit but Dirk assisted where required. This helped me to improve in this field and I also now use the same principle on my staff when required.• Often when Dirk gives me a task to perform, I sit and analyse why that particular task was given to me. Is it because it is a strength of mine or do I need to improve in that particular area? This analysis at the end of the day results in me doing more research and study on the subject which in turn results in it being more of a strength than an improvement area. You see, if he explained exactly why he chose me to do this particular task, I would not analyze it and would not do the research, thus making it a strength. • Also, Dirk has always provided one with whatever Development they require in order to be a better person, manager

Research findings

• Quality-of-life surveys have shown that people who feel useful (of value to themselves and other) are happy and therefore experience quality-of-life. (Soren Ventegodt – 1996)

• Loyal (happy) employees are key to the profitability of organisations, because loyal employees create passionate and loyal customers. (Alan Whitaker – 2005)

• The main reason why employees leave (or stay) is not money, but leadership.

(Corporate Leadership Council – 2001)

The foundation of a great company

“But the foundation of a great company is the way it develops its people – providing the right experiences, such as learning in different jobs, learning from other people, giving candid feedback, and providing coaching, education and training. If you spend the same amount of time and energy developing people as you do on budgeting, strategic planning, and financial monitoring, the payoff will come in sustainable competitive advantage”

(Bossidy & Charan – 2002)