Small Business

Leadership is a vital role in any organisation. It involves defining the direction of a team and communicating it to people, motivating, inspiring and empowering them to contribute to achieving organisational success. Leadership requires being strategically focused and applying behavioural techniques to build commitment and attain the best work from your people.

The ingredients of effective leadership are complex and are widely agreed to depend on the specific leadership situation, considering the difficulty of tasks, the degree o

f a leader's authority and the maturity and capabilities of subordinates. Leadership skills often take time to learn, because they are multi-faceted, behavioural and context dependent.

Becoming an effective leader is challenging to many new managers, but offers the rewards of successfully orientating peoples work to be most effective and achieving excellence in team performance. An understanding of the principles of strategic thinking, direction setting, communications and motivation provides a springboard for developing skills and an effective management style to suit your personality and leadership situations.

Successful leaders in business often demonstrate the following attributes;

positiveness, reliability and pro-activeness

clear vision of business goals

a firm commitment towards meeting defined goals

an ability to effectively communicate their vision

commitment to their team and to their organisation

skilfulness in planning and developing strategies

a focus on motivation and setting clear directions

the adaptability to engage with the views and needs of team members

an ability to inspire employees to meet goals

commitment to the happiness and wellbeing of their team

honesty and openness with their team

Developing leadership capabilities requires you to understand your own strengths and weaknesses and to be willing to continuously improve your skills and knowledge as you gain experience.

By developing your understanding of leadership, you will be better equipped to inspire and motivate your team to achieve results for your organisation.

Are Leaders Born or Made?

In considering the extent to which leaders are born or made, there are many different views. It is commonly believed that certain people are natural leaders, particularly with reference to pivotal historical figures. However, if this were entirely true, there would be little point in the rest of us attempting to learn about leadership. Many people find themselves in management roles where leadership capabilities are useful or even vital to success, and then learn and develop the necessary skills to be a leader. A view consistent with modern theories is that leadership involves a combination of personality traits and many specific skills and capabilities learned over time and gained through experience.

An ability to effectively resolve complex situations is perhaps one of the most important traits of a leader. However, this doesn't mean that leaders are always the smartest person in the team or that they have the most technical knowledge. Successful leadership allows the specific skills and knowledge of the leader and each of their team members to be brought together in the best way to allow effective directions to be set and good decisions to be made.

A person's character, personality and attitude may assist them to assume a leadership role. However, evidence suggests that very different styles of leadership are able to be successfully applied by leaders to suit their own personalities and different leadership situations.

While some people may feel more inclined and be better prepared to take on leadership roles, an understanding of leadership functions allows us to develop skills and capabilities to achieve a successful leadership style matching our own character and talents. Some of the basics of good leadership can be self-taught, but many useful skills will be acquired through experience developed over time. You may be influenced by parents, teachers, employers or colleagues as well as by observing the behaviour and style of other successful leaders and seeking their advice.

By watching and analysing, you can develop your own leadership style based on what has proven effective for others. To build your leadership skills you can also seek feedback from your team and ensure that you learn from your mistakes.

As a leader, there is always more to learn in dealing with new situations and different personnel. Your observations, training, experiences and personality will all help to shape your evolving leadership style.

Some of the most important aspects of leadership are a strong commitment to setting effective and clear objectives and enthusiasm and commitment to developing your team's performance.

Trait, Behavioural and Situational theories

According to trait theory, specific traits and characteristics were believed to be associated with an individual's ability to lead. Lists of leadership traits may still be found in many texts, including physical and intellectual

Trait theories and behavioural theories of leadership are two of the main historical theories developed in the quest to define what good leadership is.

The earliest of modern theories was the trait theory of leadership which sought to look beyond the idea of leaders simply as exceptional individuals by characterising the general qualities exhibited by successful leaders.

Trait theory

characteristics, personality traits, behaviours and skills. While the existence of a clear relationship between leadership success and these traits has been disputed, developments of trait theory persists in later writing, such as recent research establishing a link between leadership and traits such as logical thinking, persistence, empowerment and self control[1].

Problems identified with traditional trait theory include evidence that different sets of traits will be more effective in different situations; that the long list of traits mixes very different qualities, such as skills, behaviours and abilities; and that traits may be culture and gender specific.

Behavioural theory

Behavioural theories take a different approach, focusing more on patterns of leadership behaviour than on the individual leader. It suggests that certain behavioural patterns may be identified as leadership styles. Applications of behavioural theory promote the value of leadership styles with an emphasis on concern for people and participative decision making, encouraging collaboration and team development by supporting individual needs and aligning individual and group objectives.

In practice, trait and behavioural theories may be used to develop our own ideas about successful leadership, and it may be useful to consider which leadership traits would be beneficial in particular situations. It may also be instructive to consider how our behavioural style as a manager affects our relationship with the team and promotes their commitment and contribution to the organisational goals.

Situational theory

Situational leadership theories propose that the effectiveness of a particular style of leadership is dependent on the context in which it is being exercised. From situation to situation, different styles may be more appropriate^[2]. An emphasis is placed on developing the ability to work in different ways and change management style to suit the situation.

Two common situational theories include Fiedler's contingency model and House's path-goal theory.

Fiedler's contingency model suggests that leadership effectiveness depends on both leadership style (being task or human orientation) and the degree to which the situation gives the leader control and influence. Three factors affecting a leader's control and influence are identified

- the relationship between the leader and followers, whereby support may more easily be gained by a liked and respected leader;

- the structure of the task, whereby clarity of the goals, methods and criteria will promote greater influence, and;

- the leader's positional power, which may afford the leader greater control.

While Fiedlers work specifically developed the idea of matching the work situation to suit a leader's style, contingency theories also help us to consider how leaders and their followers might behave in different situations.

Hersey and Blanchard developed an influential situational leadership theory that identified four leadership styles which may be selected to suit different situations:

Telling/Directing - for unwilling or poorly resourced personnel

Selling/Coaching - for willing but less competent personnel

Supporting/Participating - for moderately mature personnel

Delegating - for highly competent and mature personnel

The path-goal theory proposes that the effectiveness of leadership is influenced by the interaction of leadership behaviour and contingency factors, including employee characteristics (ability, experience, need for achievement, etc.) and environmental factors (task structure, authority system, team dynamics, etc.). Path-goal theory suggests that leaders should support their team by setting a clear path to follow and removing roadblocks in order to allow them to achieve their goals. The leader is expected to adopt different leadership behaviours fluidly according to the situation

Four leader behaviours are identified:

Directive path-goal clarification

Supportive leadership

Participative leadership

Achievement oriented leadership

In path-goal theory, the effectiveness of different styles of leadership style is dependant on the combination of a particular set of employee characteristics, task and environmental factors. This suggests that an effective leader will utilise aspects from various leadership styles, depending on the individual situation.

Situational and contingency theories emphasise a need for applying different leadership styles to adapt to different situations and factors in the organisational environment and in the capabilities and degree of motivation of team personnel.

Leadership and Business

Case Study Videos

This chapter looks at the importance of leadership in business, the difference between leaders with managers, as well as common leadership qualities.

The delegation process, common leadership mistakes, and pointers about leading through a crisis are also outlined.

Click on a heading below to begin.

You can also watch videos, listen to audio, download a PDF or start the quiz.

Importance of Leadership

Leadership vs Management

Leadership Qualities

Effective Delegation

Importance of Leadership

In a competitive business environment, effective leadership is an essential requirement in order to achieve organisational goals. To do this, leaders must be able to provide inspiration, motivation and clear direction to their team.

For any type or size of business, effective leadership provides many benefits and will assist the organisation to achieve success and stability. In the absence of effective leadership, organisations often grow slowly and may lose their direction and competitiveness. Some of the ways in which leadership can benefit a business include:

A clear vision: setting a clear vision and communicating it effectively provides employees with an understanding of the organisational direction and allows them to clearly understand their roles and responsibilities.

Effective planning: a structured approach is able to generate a plan of action that will most effectively meet the organisational goals. An inclusive planning process also provides the opportunity for people to identify, contribute to, understand and achieve well defined objectives.

Inspiration and motivation: the commitment and enthusiasm of a business leader shapes the common goals of the organisation and provides inspiration and motivation for people to perform at a high level.

New ideas: encouragement of people to openly contribute and discuss new ideas in a positive environment makes use of their diverse experience and ideas to improve a business.

Employee relations: an open and engaging relationship between a leader and their team members demonstrates that they are valued as an integral part of the organisation, creating a sense of ownership among team members and developing a closer alignment between individual and team objectives.

Crisis management: Good business leadership can help a team remain focused during a time of crisis, reminding the team members of their achievements and encourage them to set short term, achievable goals.

These are just some of the ways in which good leadership can have a positive impact on your business. Understanding these skills and applying the strategies will help you to become a better leader and could potentially make your business more successful.

Leadership vs Management

There are differences between leadership and management functions. Leadership provides direction, encouragement and inspiration to motivate a team to achieve organisational success. Management, by, is primarily an organisational role, coordinating people's efforts and the allocation of resources to maximize efficiency in achieving identified goals.

The distinction between leadership and management is quite useful in gaining a better understanding of these different functions in an organisation. Leadership and management operate hand in hand. To be a good manager requires leadership skills, and an effective leader will be reliant on applying their own and others' management skills to achieve their vision.

Leadership Characteristics

- Strategic and people oriented focus

- Setting of organisational direction and goals

- Motivation and inspiration of people

- Establishment of principles

- Building a team and development of talent

- Development of new opportunities

- Promoting innovation and invention

- Empowering and mentoring people

- Risk engagement and instigation of change

- Long term, high level perspective

Leadership and management are closely linked functions: each is complimentary to the other. Without efficient management, the direction set by a leader risks being unsustainable. Similarly, management exercised without effective leadership will perpetuate current activities and directions, without adaptation to meet strategic goals and without optimising team performance.

Leadership Qualities

Different leaders will display different leadership qualities, depending on the context and circumstances of a situation. A capable business leader will be able to use their leadership qualities to gain the trust, respect and commitment of their employees, and motivate them to achieve organisational goals.

Effective business leaders usually exhibit a combination of some of the following qualities:

Integrity: Good leaders often place great importance on ethical values. They choose to do "what is right", even if it is hard. In general, leaders with integrity are honest, truthful, fair, reliable and will not let their emotions affect their ability to do their job.

Self-Confidence: Strong leaders have a firm belief in their abilities. They generally remain confident at all times and demonstrate the ability to handle challenges and pressure.

Commitment: Successful leadership is impossible without firm commitment. Good leaders remain focused and dedicated towards their objectives and goals.

Enthusiasm: Effective leaders usually have a pro-active approach towards people, problems and possibilities. They are able to stimulate and evoke excitement amongst employees so that achieving organisational goals can be done in an energetic manner.

Self-awareness and adaptability: Skilful leaders exhibit an understanding of their own values, skills, strengths and weaknesses. They are often flexible and willing to continually improve their knowledge and skills to meet new challenges.

Future vision: Successful business leadership involves creating a well founded vision of what can be achieved in the future and the best way to approach it.

Creativity: Effective leaders are creative in their approach, developing new ideas to resolve current issues and implementing them effectively to prevent future recurrences.

Ability to understand people: Good business leadership requires a clear understanding of human behaviour and the ability to develop open and honest relationships with their team to understand their abilities, concerns, interests and motivations.

Ability to inspire and motivate: Successful business leaders may be charismatic, highly organised, and very motivational in their interaction with employees. They develop a culture of hard work and commitment, inspiring and motivating the team to perform at its best.

Openness: Good business leaders are able to listen openly to the ideas, suggestions and opinions of their employees. They are willing to adopt new ways of doing things if they believe it will be beneficial for the organisation. They focus on creating a positive environment of mutual respect and trust that enables the business to be well prepared for new challenges.

Communication skills: Good communication skills are vital for effective leadership. Skilful business leaders are usually very clear, effective and influential in communicating their vision to employees. They continuously improve their communication skills and learn new ways to remain effective in a constantly changing business environment.

Business understanding: Successful leaders will strive to have a clear understanding of their business, the environment in which they operate and their competitors. They will develop an awareness of the strengths, weaknesses, opportunities and threats for their business and focus on maximising resources to their full potential.

Decisiveness: This is the ability to exploit opportunities and make sound decisions, while minimising risk. Strong business leaders will usually conduct a risk and/or cost and benefit analysis prior to finalising any decisions that may potentially have major impacts on the business.

Ability to build effective teams: Effective business leaders have the ability to see the potential in an employee and successfully place them in a team where their skills and talent will be properly utilised. They also resolve disputes, encourage debate and fresh ideas and give the team direction towards achieving common goals.

Effective Delegation

An important aspect of leadership is the ability to effectively delegate tasks. Delegation involves handing over the authority, responsibility, and accountability for performing specific duties to others, so that they may act on your behalf.

Leaders may have difficulty delegating tasks for several reasons. For example, they may not have confidence that others will complete tasks satisfactorily; training people may appear to be excessively time consuming; and they may be concerned about losing control and authority. However, without delegation you may find that you become overloaded with work and may need to assign at least some responsibilities to others.

Effective delegation is beneficial for the organisation as a whole. It enables leaders to gain more time and flexibility to focus on strategic planning, in turn helping the business to improve overall work quality and achieve improved efficiency. With a reduced workload, leaders can allocate their time and energy to tasks that are more important and crucial to the business. Employees will also have more room to grow and develop new skills as delegation extends their scope of responsibility and provides opportunities to take on new tasks.

Effective delegation starts with identifying tasks that are suitable to be delegated. For example, a leader may adopt the SMART approach while delegating, identifying tasks for delegation that are Specific, Measurable, Appropriate, Reachable, and Time bound.

Selection of a suitable candidate to assign to the delegated task is important to ensure a successful outcome. You need to be confident that your employee's interest, skills, knowledge and experience are appropriate for the selected task. It is better to start off by assigning simpler or less important tasks to people at first, then gauging their performance and making decisions for further delegation.

When delegating selected tasks to suitable employees, it is important to explain to them the importance, limitations, and the desired outcome of the assigned tasks. Encourage them to ask questions and clarify their responsibilities to avoid miscommunication and errors. It is also vital to ensure that all the necessary information, training, and the authority to perform the task are available to delegates and that they are aware of their accountability.

Once delegates start performing assigned tasks, it is beneficial to establish mentoring and feedback procedures to follow their progress. Regularly arrange open discussion sessions with them to review their performance, discuss areas of difficulty and encourage them to find solutions. Seek opportunities to acknowledge their progress with a word of appreciation or a motivation reward wherever it aligns with the desired result.

Effective delegation is an ongoing process that not only enables your organization to accomplish business efficiency through increased participation but also helps your employees attain professional growth and success.

Motivating Employees

Case Study Videos

This chapter explains a number of popular theories of leadership, including the hierarchy of needs theory, motivator hygiene theory and equity theory.

Some motivational techniques such as effective job design, setting goals and providing feedback are also discussed.

Click on a heading below to begin.

You can also watch videos, listen to audio, download a PDF or start the quiz.

Theories of Motivation

Motivating through Job Design

How to Set Goals

Providing Feedback

Theories of Motivation

The highest order motive is self actualisation. This refers to the motivation of an individual to reach their maximum potential, their desire for self fulfilment or the opportunity to "to become everything that one is capable of becoming".

Motivation is what stimulates and drives an individual's intensity and commitment towards achieving a result. Motivation is made up of factors that are responsible for the increase in a person's normal level of input or application, with the knowledge that they will receive some form of reward.

There are many theories that have been developed to explain motivation, each taking a different approach and contributing new concepts. An understanding of these theories may help you to better understand your role as a leader and the importance of motivating your employees.

Some of the most influential theories of motivation are briefly outlined below:

Maslow's hierarchy of needs theory

This early but very influential theory separated a human's basic needs into five distinct categories. These categories, placed in order from most fundamental to higher order as shown in the following diagram are; physiological, safety, love/belonging, esteem and self actualisation.

If physiological needs are not being met, there will be a noticeable physical effect on a person. A lack in meeting needs related to safety, love/belonging or esteem will give no physical indication, but can leave a person feeling anxious or tense.

The hierarchy of needs suggests that satisfaction of low order needs precedes the satisfaction of higher order needs. Issues of esteem and self-actualisation may be of little interest to a person faced with insufficient security or physiological stress. The need for self actualisation becomes important and able to be satisfied when lower level needs have been met.

Herzberg's motivator - hygiene theory

Herzberg's motivator - hygiene theory proposed a dual model of employee motivation factors. It describes two distinct categories: a specific set of motivating factors that contribute to job satisfaction and another set of environmental (hygiene) factors that contribute to job dissatisfaction. Job satisfaction and job dissatisfaction are not opposites but co-existent perceptions affected by these different sets of factors.

The factors in the positive motivating category lead to job satisfaction. They are based around activities an employee does, such as completing challenging work and receiving recognition, gaining responsibility, promotion and achieving goals.

Environmental factors don't have the same positive impact on job satisfaction, but have an influence on job dissatisfaction. These factors include company policy, supervision, workplace conditions and salary. The theory suggests that these factors won't motivate an employee or make them satisfied with their job, but their absence will create job dissatisfaction.

Therefore, to effectively motivate staff, it is necessary to equally consider both motivating and environmental factors. Addressing factors in the work environment will contribute to ensuring that employees are not dissatisfied, but the development of positive motivational factors leading to job enrichment is necessary to achieve high levels of performance.

Adam's equity theory

Adam's equity theory suggests that beyond the satisfaction of their needs, people seek fair treatment in the workplace in terms of the ratio of their efforts and their rewards, and compare themselves to t

hose around them to assess whether they are being fairly valued.

An employee will feel undervalued if they believe they are contributing more than comparable employees and not being rewarded equivalently. Their level of motivation will depend on perceiving to be fairly or advantageously treated, which they will evaluate in this comparative manner. Demotivation from perceived unfairness may be manifested by different individuals in very different ways, ranging from a silent reduction in effort to disruption and hostility.

For the leader, this theory emphasises that an individual's motivational influences are not isolated. High levels of dissatisfaction and demotivation may occur where people perceive that they are being comparatively undervalued. Motivational changes may occur even where a person's situation is not varied, but as a reaction to awareness of changes made for other staff or in other parts of an organisation.

The evolving theories of employee motivation suggest that there are many variables influencing how a person perceives their job and becomes motivated to achieve a high level of performance. Enduring concepts - such as the hierarchy of needs, the different motivational effects of job enrichment and environmental factors, and the influence of people's perception of fairness - all provide tools to help analyse motivational influences and develop strategies to improve levels of motivation in a specific work environment.

Motivating through Job Design

An employer may incorrectly assume that money is the sole motivator for their employees. For many people, job design is as important as fair remuneration in motivating employees to be more effective. Job design has an influence on employee motivation, job satisfaction and commitment to their organisation, all of which have a significant impact on the efficiency of your business.

Jobs are often designed in a way that encourages specialisation. Work is divided into specific tasks, with the employee assigned to each task becoming very skilled, accurate and efficient at performing it. However, an often overlooked problem with specialisation is that it generally has a negative impact on employee motivation.

Whilst an employee may become very efficient and skilled at completing a repetitive task, the lack of variety in their day can lead to boredom and a feeling of detachment from the overall goals and success of the business. They feel that as long as they complete their job satisfactorily, there is no need to be concerned with any other aspect of the business.

A possible solution to this problem involves providing employees with more variety in their work. One technique to do this is introducing job rotation, where employees move between different jobs periodically. Not only will this reduce the monotony of their work, but it will develop a team with a wider range of skills.

Another way to improve employee motivation is through job enlargement. This is where employees are gradually provided with more challenging work and greater responsibility. Whilst you may think this would have the opposite effect, many employees enjoy learning new things and will get more fulfilment from their work if they are given extra responsibility. This also helps you to increase the skill level of your team.

Job enrichment is another motivational technique that you may want to consider. It involves providing employees with more control over the work they do. By providing them with more authority and responsibility, it may encourage them to seek out better and more efficient ways to accomplish their task, leading to a potential increase in productivity. The more interesting a person's job is, the more likely they will be motivated to apply effort and maximise their productivity. The Job Characteristics Model helps to explain the benefits of job design

Core Job Characteristics:

Skill Variety

Task Identity

Task significance

Autonomy

Feedback

Outcomes:

Motivation

Performance

Satisfaction

Reduced Absenteeism

Turnover

Psychological States:

Meaningful

Responsibility

Knowledge of results

The core job characteristics will enhance employees' job satisfaction and motivation, potentially leading to better outcomes for your business.

Well designed jobs that don't invoke boredom and which increase the job satisfaction of your employees may help you to improve efficiency, productivity and morale within your business. In turn, this could lead to less staff turnover, absenteeism and potentially make your business more profitable.

How to Set Goals

The process of setting goals allows the vision of an organisation to be translated into actions and results. It is able to provide people with a clear statement of their direction, their tasks and performance measures, and to align the objectives and activities of a team to a common and co-ordinated path.

To avoid goals being in effect little more than ideas or a wish list, and potentially either not being achieved or not delivering beneficial results, the process of setting goals should be undertaken in a planned and committed manner and in coordination with both higher levels of strategic planning and day to day task management. Setting of goals becomes most effective within a process of goal management that adopts a number of basic strategies to ensure that goals are well conceived, clearly defined, attainable and finally become achieved.

The starting point for goal setting is the vision for an organisation, department or team's future. This vision may represent what the organisation would ideally be like at some point in the future. At an organisational level, the strategic vision may incorporate new products, business directions or growth projections and may have a relatively long time horizon, possibly 5 years, while a department or team's vision may be more specific in relation to their performance, capabilities or processes, and have a shorter time horizon. It is clearly important that visions at different levels in an organisation are aligned.

Achievements that will allow the vision to be realised may be identified as the basis for organisational goals. Prioritisation of goals is critical to allow sufficient focus and resources to be applied to the most important ones. Pareto's 80/20 principle which proposed that 80% of all effects will result from only 20% of all causes emphasises the importance of selecting and prioritising the goals to be set.

The participation of employees in setting goals is considered to be highly beneficial. This allows people to develop a better understanding of their team goals and why they are important. Through early participation, their commitment and motivation to achieve goals that they have contributed to and believe in will be stronger.

Goals should be specific and should be written down. This provides a clear statement of what is expected for everyone. It is important that goals are not set too high to be achievable, nor too low to be challenging and effective. Goals must be realistic.

The effective management of goals requires that they be broken down into specific and measurable objectives, activities and steps, and that it is made clear who is responsible for doing what. It is important that timeframes are set for each activity, fitting into an overall timeline for the main goal. The allocation of necessary resources, tools and training and potential roadblock issues such as time competition from employees' day to day workloads should be carefully considered and addressed.

An activity considered essential to successfully achieving team goals is the monitoring of progress. A regular review process should be put in place to track progress and assess and revise activities according to their actual status. The progress meeting provides an opportunity for achievements to be lauded, for difficulties to be raised and for additional activities to be scheduled. It promotes team communication and support, and may be used to maintain focus and motivation. As things progress, goals themselves may need to be revised to suit changing issues and conditions.

Setting and achieving goals is an important aspect of an organisation moving forward to successfully achieve its vision. A strong commitment to the process of developing and implementing goals, using established techniques, is needed to convert goals into reality.

Providing Feedback

Providing feedback is an important but often under-utilised aspect of employee motivation and development. Particularly in Australian business culture, sensitivities over giving and receiving either praise or criticism have often inhibited managers from providing sufficient feedback.

To be most effective, feedback is provided with reference to established performance expectations or goals. A regular performance review may be used to both establish expectations and goals, and provide feedback on how people are performing, identifying specific aspects of behaviour requiring attention and specific achievements that deserve recognition.

Without feedback, an employee may remain unaware of how their behaviour meets or falls short of performance expectations, and they are unlikely to make changes.

Positive feedback, which identifies and recognises specific good work and high levels of achievement, is a powerful motivational tool, particularly when it is well timed and provided genuinely and sincerely. Being specific and descriptive with positive feedback provides clarity in promoting desired behaviours or achievements and communicates the sincerity of your appreciation.

Motivational feedback may be used to provide a springboard to raise expectations of an employee's performance and help them stretch their capabilities in specific areas. Seeking out aspects of improved performance for positive feedback is also used as a means of building the confidence of individuals underperforming in other areas.

The assessment of an employee's level of performance may be communicated using constructive feedback that provides them with information as to where they are in relation to expected behaviour, addressing areas where expectations have been met and areas where attention is required. Be clear about the changes in behaviour you expect.

In providing constructive feedback, it is important to be specific and descriptive and to relate feedback to the behaviour, which is able to be changed, rather than to the person or their intentions. Negative feedback that is subjective or which questions a person's intentions will readily create a defensive reaction and a negative result.

Asking permission to provide feedback and providing a person with the opportunity to speak themselves about their performance are useful techniques to more openly discuss performance issues.

Some of the common mistakes leaders make when providing feedback to their team are:

Not conducting performance reviews

Being subjective or inconsistent

Not being specific

Addressing the person rather than their behaviour

Only providing negative feedback and criticism

Taking too long to address negative issues

Giving negative feedback in public

Criticising without offering solutions or suggestions

Not giving the team an opportunity to give their leader feedback

Different people will respond differently to receiving feedback, whether it is positive or negative. Some will feel uncomfortable if they are singled out for praise, particularly within a team environment, whereas other people will respond well to receiving specific recognition for their work.

When providing feedback, always remember that criticism is best dealt with in private. Avoid criticising employees in front of their colleagues, unless it is something that applies to the entire team. To single someone out from a group can have significant negative effects on that person's motivation as well as the morale of the team as a whole.

Upward feedback can also be implemented and used to evaluate and receive feedback on your own performance as a leader. Upward feedback is where the team is encouraged to give constructive criticism, advice, recommendations and suggestions to their leader. You could also consider using 360 degree feedback, where each member of the team evaluates and provides feedback on each other team member and the team as a whole. This technique is suited to more mature personnel and clear ground rules are necessary to ensure a constructive approach.

Remember, the purpose of feedback is to motivate your team and help them to continuously improve their performance. Be constructive and always try to follow up any criticism with a positive reinforcement of something the person or team has done well.

Power and Politics

Case Study Video

This chapter looks at the power of leadership and the impact that it has on the politics of an organisation. It addresses the ways in which leaders are able to influence those around them into working towards goals and analyse how leaders use their social power.

Click on a heading below to begin.

You can also watch videos, listen to audio, download a PDF or start the quiz.

Influencing Others

Social Power

Organisational Politics

Influencing Others

As a business leader, the ability to influence people around you to support your goals is a valuable skill. Quite often the organisational authority you may have as a leader is not sufficient to ensure people will support your ideas and initiatives. Beyond influencing your direct employees, it is also often necessary to gain support from colleagues and decision makers in the organisation over whom you have no authority.

Influence and power are closely interrelated aspects of leadership. As influence implies being able to affect other people's thinking or actions, the power of our influence is exercised through relationships. This tells us that building strong and effective relationships throughout the workplace will enhance your influence. Your leadership qualities will also have an impact on your influence, with people more likely to support someone who has an

engaging vision and who is credible and respected.

Three main styles of influence are generally identified; logical, emotional and cooperative^[1].

A logical influencing style involves appealing to reason and intellect. People who influence others using this style will clearly and logically explain their reasons, drawing upon detailed, factual evidence and identifying the benefits that will be delivered to convince their audience that it makes sense.

An emotional influencing style tries to link goals or direction to an emotional motivator, such as making someone feel positive or included, or providing a sense of contributing in a valuable way. A positive emotional response will be more likely if the proposal aligns with their values and goals. Emotional influencing may utilise the positive and enthusiastic presentation of an appealing vision which people feel able to support.

Cooperative influence involves building relationships and networks between a leader, people they are trying to influence and other stakeholders to gain their support. Willingness to support people's efforts and work on their behalf may be demonstrated by actions such as making resources available and addressing roadblock issues. Encouraging and appreciating people's inputs and encouraging participation in defining actions generates alignment and builds their commitment to your goals. Strategically developing coalitions and alliances with other stakeholders and respected figures may be used to broaden your influence and support and leverage the influence of others. Developing cooperative support requires patience and commitment.

Another important aspect of influencing people is the principle of Reciprocity, which characterises influence as a form of exchange, whereby it is necessary to provide a benefit in some form to receive one back. More specifically, the writer Cialdini has proposed that people feel a strong reciprocal obligation to return a favour that has been offered to them, hence suggesting that providing support to others, either employees, colleagues or leaders, may be well rewarded when you seek reciprocal support in return.

Effectively influencing people is a subtle skill developed through experience. Capable influencers will apply all of the above styles to suit different contexts and audiences. Opportunities to apply influence will be most effective if they are thoughtfully planned and carefully prepared for.

In today's business organisations where authority is less structured and workplace teams and relationships are increasingly fluid, the power of influence is an increasingly important leadership capability.

Social Power

The question of "What is Power" has been considered by many thinkers, and does not have a simple answer. The power held by an individual may be drawn from many different sources, and how it operates is a complex aspect of human relationships. How power is exercised depends not only on those holding it but also on the legitimacy accorded to them by those being controlled. Belief structures, culture and even our language affect perceptions of power and how individuals offer others power over them.

Within organisations, leadership and power are closely linked. The concept of social power refers to power exercised through the influence of the thoughts and actions of others, such as between a manager and their subordinates. A study of social power by French and Raven indentified five (later six) bases of power that fall into two categories.

Positional power sources include legitimate power, reward power and coercive power.

Legitimate power is given to a leader by an organisational structure or hierarchy. It is the power associated with a title or position that is afforded to a person while they hold that position.

Reward power and coercive power are also related to a leader's position, and depend on the extent to which they have authority to provide rewards and enforce punishments to obtain desired behaviours. The effect of rewards may be highly variable, and even senior leaders may only have limited reward power. Coercive power is that of the gaoler, the sergeant or the boot-camp trainer. Its use is rarely appropriate in the work environment.

Business leadership requires more expansive and influential forms of power than that simply related to their position. Several forms of personal power are identified by French and Raven.

Expert power stems from having skills, knowledge and understanding exceeding that of those around you. Demonstrated expertise lends others to seek your leadership in an area, and creates trust and respect in your opinions. Gaining a reputation for logical thinking allows your power base to be expanded in other areas.

Referent power is related to the concept of a leader's charisma. It is based on the power people will afford to someone because they are charming, likeable or respected. Celebrities wield considerable referent power, which is utilised widely for product promotion. Because of its influence, referent power may be considered as a responsibility. Alone, it represents a potentially unstable power base but in combination with other forms of power it may be used to good effect.

Information power was later added to French and Ravens categories. It refers to the power derived from holding information that is critical to achieving organisational objectives.

Understanding the different forms of social power allows us to better understand the ways in which other people may be influencing us and how we may be able to develop our own expert and referent power to become more effective and positive leaders.

Organisational Politics

All organisations are subject to conflict and competition between the desires and interests of different departments, teams and individuals. Organisational politics refers to the processes through which these rival interests are played out and eventually reconciled. While in an ideal organisation it may be hoped that decisions are made on a rational basis, politics is inherently non-rational and subject to power interactions between diverse interests. Members of an organisation are at the same time cooperating to achieve a common goal and competing for rewards, and at times their personal interests may be at odds with the organisation's objectives.

It is through the political system of an organisation that rival interests are resolved. This system represents how power is applied and distributed in the organisation. Understanding the political system of an organisation is necessary for a leader to operate effectively and reach their goals. A leader, exercising power, is able to have a strong influence on the political climate of an organisation through their decisions, their way of handling conflict and providing recognition, support and inspiration to their teams.

Negative organisational politics may be very destructive for an organisation. This has been identified as one of the major sources of stress within modern businesses. Negative politics includes the use of subversive methods to promote a personal agenda which may undermine organisational objectives, distract energy away from organisational goals and compromise the interests, cooperation and fulfilment of other employees. Such tactics may include filtering or distortion of information, non-cooperation, allocating blame, reprisals, dishonesty, obstructionism and threats.

Impression management is another aspect of organisational politics that it is important to maintain an awareness of. The term refers to techniques of self-presentation where a person may purposefully control the information they put forward about themselves or their ideas to create a favourable impression. For the leader this implies that everything may not always be as it appears. Studies have indicated that people using impression management may be more favourably rated by their supervisors than others. On the other hand, being aware of the impression you are creating should be considered in building support for your own goals. The extent to which impression management is applied is an ethical question that relates to a leaders credibility and integrity.

Often, political behaviour and manoeuvring within an organisation is caused by uncertainty[1], such as unclear objectives, poorly defined decisions, competition and change. A leader's influence may be used to smother a political climate that promotes such negative politics.

By promoting a positive culture that values integrity, respect and fairness within their team, the leader is able to channel people's interests and energy away from negative political interplay and towards an alignment with organisation objectives. Allowing team members to express their interests and demonstrating a commitment to support individual needs integrates their fulfilment into the work organisation and promotes the positive resolution of political conflicts.

Decision-making and Managing Conflict

Case Study Videos

This chapter looks at the importance of decision-making and managing conflict in your business. It discusses various approaches of decision-making and its impact on your team.

Also discussed are the different types of conflict that may arise in the workplace and how to best manage these.

Click on a heading below to begin.

You can also watch videos, listen to audio, download a PDF or start the quiz.

Models of Decision-making

Decision-making Styles

Group Decision-making

Types of Conflict

Managing Conflict

Models of Decision-making

As a leader, you'll frequently be required to make decisions which can have significant impacts on your organisation and team. Therefore, you should have a good understanding of the different models of decision making and what's involved in making a good decision.

The first thing you should be aware of is the importance of critical thinking and its direct impact on effective decision making. Critical thinking can be defined as raising what is subconscious in a person's reasoning to the level of conscious recognition. Good leaders are usually critical thinkers as they understand the mechanics of reasoning and are able to use this to manage the unconscious influences that contribute and affect their decision-making process.

Generally, critical thinkers:

Continually question their own and other people's assumptions, reasons, motivations, and outlook

Do not focus on contradicting others when questioning but focus on their reasoning and perspective

Answer questions by asking more questions

Unfortunately, critical thinking does not come naturally to most people. Like everything else, it is a skill you must continually develop and refine. As a leader, critical thinking can prevent your subconscious emotions and reasoning from clouding your judgement and thus allow you to make better overall decisions.

There are two basic models used to describe the decision making process; the rational model and Simon's normative model.

The rational model proposes that people follow a rational, four step sequence when making decisions. The four steps are:

Indentifying the problem

Generating solutions

Selecting a solution

Implementing and evaluating the solution

Some of the limitations not considered in this model are issues such as not having enough information relevant to the problem and also the fact that problems can change in a short period of time.

The normative model of decision making takes into account the fact that leaders are bound by certain constraints when making decisions. These constraints include personal and environmental factors that reduce rationality, such as time, complexity, uncertainty and resources.

The normative model suggests that decision making is characterised by;

Limited information processing - there is a limit to how much information a person can manage.

Judgemental heuristics - shortcuts are used to simplify decision making.

Satisficing - choosing solutions that meet minimum requirements and are "good enough."[1]

A leader will only be able to manage a certain amount of information at any one time, so they make judgements based on their previous experiences wherever possible to speed up the decision making process. Often choosing a solution that is "good enough", is considered effective when there are multiple solutions that will produce similar outcomes.

Most people use variations of these theoretical models to make decisions in their day to day lives. Developing your understanding of the decision making process can help you become a better and more effective leader.

Decision-making Styles

Generally people differ in their approach to making decisions, we can term this their decision making style. "One perspective of decision making styles proposes that people differ along two dimensions in the way they approach decision making. The first is an individual's way of thinking. Some people tend to be rational and logical in the way they think or process information. A rational type looks at information in order and makes sure it's logical and consistent before making a decision. Others tend to be creative and intuitive. Intuitive types do not have to process information in a certain order but are comfortable looking at it as a whole.

The other dimension describes an individual's tolerance for ambiguity. Again, some people have a low tolerance for ambiguity. These types must have consistency and order in the way they structure information so that ambiguity is minimised. On the other hand, some people can tolerate high levels of ambiguity and are able to process many thoughts at the same time. When we diagram these two dimensions, four decision-making styles are evident: directive, analytic, conceptual and behavioural."[1]

Directive Style: A person has this style if they have a low tolerance for ambiguity and are efficient, rational, and logical in their way of thinking. They focus on the short term and are quick to make decisions, usually resulting in a decision that has been made with minimal information and not carefully analysing other alternatives.

Analytic Style: As opposed to the directive style, a person with an analytic decision-making style has greater tolerance to ambiguity. They are careful decision makers that like to be well informed and thoroughly assess their options. They usually have the ability to adapt or cope with unique and challenging situations.

Conceptual Style: Conceptual decision makers are generally very broad in their approach and consider all available alternatives. They are long-term oriented and are usually capable of formulating creative solutions to problems.

Behavioural Style: People with a behavioural decision-making style work well with others, are open to suggestions, and are concerned about the achievements of their team. They generally try to avoid conflict and place importance on their acceptance by others.

A good understanding of the various styles of decision-making each will allow you to recognise your own style and adapt accordingly to each situation.

Group Decision-making

There can be advantages and disadvantages in involving teams of people in decision making. Some advantages include; accumulating more knowledge, taking a broader perspective and gaining support by letting individuals participate in the process.

Some of the disadvantages in group decision making include often a slower time to get a decision, a necessity for compromise which results in a less than optimal outcome and the potential for an individual or clique to dominate the group, negating its original benefit.

One difficult decision in itself for a manager or business owner is determining when to engage a group, and the extent to engage a group to help make a decision or whether to go alone and make a decision individually.

As the advantages and disadvantages can be different for different situations, there are tools available to assist you in determining, if, when and how to make group decisions.

One such tool is the Vroom-Jago decision model. The model begins by analysing individual situations with questions including;

As the leader, do you have enough information of your own to make a good decision?

Is the problem structured in that it is clearly defined, organised and has recognised solutions?

Do the members of the group have to accept this decision for it to work?

If you make this decision yourself, are you sure the group will accept it?

Are the group members aligned with the same goals that you are trying to achieve?

Is disagreement likely among group members in reaching a decision?

If it is determined that a group decision is the preferred option, some simple guidelines for the decision making process can help as follows;

Develop a clear understanding of the problem and the need for a decision

Develop a clear understanding of the requirements for an effective choice

Thoroughly and accurately assess all the positive qualities of alternative solutions

Thoroughly and accurately assess all the negative qualities of alternative solutions

Although group decision making can be effective, it can also have disadvantages such as;

Social pressure. The pressure to conform to the group can have adverse effects on the creativity of the individual group member.

Domination by a vocal few. Group members may be ignored and outspoken by members who speak the loudest and longest.

Goal displacement. The primary objective of making a sound decision may be affected by a member's personal considerations such as winning an argument, or getting back at another group member.

Groupthink. Groupthink occurs when group members try to minimise conflict and want to remain within the comfort zone of the group's consensus thinking. Creativity and independent thinking are usually the first things to be sacrificed, resulting in poor quality decisions.

Types of Conflict

Unresolved or suppressed conflicts[1]

In the workplace, conflict is inevitable, usually occurring when one party perceives that their interests are being opposed or negatively affected by another party. Conflict can produce either a positive or negative outcome. By being able to identify potential conflict before it arises and knowing how to effectively manage it, you will be able to help your staff increase the chances of turning conflict into a positive outcome. There are two types of conflict, functional and dysfunctional.

Functional conflicts

Functional conflicts are constructive, support your company's goals, and improve performance. It generally involves people who are genuinely interested in solving a problem and are willing to listen to one another.

Stimulating functional conflict is a great way to improve your team's performance and generate new ideas. It involves getting your team to either defend or criticise ideas based on relevant facts rather than on the basis of personal preference or political interests.

There are two widely accepted techniques for doing this: devil's advocacy and the dialectic method.

Devil's advocacy

This method involves assigning a team member the role of a critic. This person should always question and critique any ideas that your team may have, usually resulting in critical thinking and reality testing. However, it is recommended that this role gets rotated amongst your team to avoid any particular person from developing a strictly negative reputation.

Dialectic method

This approach involves facilitating a structured debate of opposing views prior to making a decision. By hearing the pros and cons of all the different ideas, your team will have greater success in making sound decisions. However, it should be noted that a major drawback of this method is that the emphasis to win a debate often clouds the issue at hand.

Dysfunctional conflicts

Dysfunctional conflicts on the other hand, consist of disputes and disagreements that hinder your company's performance. This generally involves people who are unwilling to work together to solve a problem and is often personal.

When dysfunctional conflicts arise in the workplace, there are various methods for dealing with it, including: integrating, obliging, dominating, avoiding, and compromising.

Integrating

This method is also known as problem solving and generally involves encouraging opposing parties to confront an issue and cooperatively identify the problem, generate alternative solutions and select the most appropriate solution. Misunderstandings and similar disputes can often be resolved using this method.

Obliging

This occurs when a person neglects their own concern in order to satisfy the concern of the opposing party. A characteristic of this conflict management style includes playing down differences while emphasising on commonalities.

Dominating

Also referred to as forcing, people that adopt this approach often have an "I win, you lose" mentality. Dominating relies on formal authority to force compliance and is generally appropriate when unpopular but necessary solutions are implemented.

Avoiding

This involves either passive withdrawal from the problem or active suppression of the issue. It is generally appropriate for trivial issues or when the negative effects of confrontation outweigh the benefits of resolving the conflict.

Compromising

This is a give-and-take approach for resolving dysfunctional conflicts and is particularly useful when the parties involved possess equal power.

The following are some examples of situations that can produce either functional or dysfunctional conflict:

Incompatible personalities

Overlapping or unclear job boundaries

Competition for limited resources

Inadequate communication

Interdependent tasks

Unreasonable rules

Unreasonable deadlines or extreme time pressure

Collective decision making (the greater the number of people participating in a decision, the greater the potential for conflict)

Decision making by consensus

As a leader or manager, you should be continually aware of staff interactions within the workplace. As such, you should carefully observe and react appropriately to these early warning signs as they have the potential to lead to major conflict, reduce morale, motivation and cause business inefficiency.

Managing Conflict