The latest figures suggest Australian leadership, which used to rank well internationally, has fallen behind the pack. This trend, writes Innes Willox, needs to be reversed as soon as possible.
The evidence, from both academic research and business surveys, shows that workplaces with more effective leadership and management capability are more productive, profitable and innovative.
It follows, therefore, that lifting Australia’s leadership capability in order to enhance productivity, innovation and sustainability is critical to our future – and particularly for many Australian manufacturers confronting challenges including the imminent end of auto assembly and an economy rebalancing amid declining demand from the mining sector.
While of course there are exceptions, there remains a growing concern about the comparatively low standing of leadership and management of Australia’s enterprises.
Using the measures of the International Institute of Management Development (IMD) World Competitiveness Yearbook, the perception of management practices by Australian employees relative to other countries has been dropping, with our ranking falling from 8th in 2009 to 18th in 2014.
This month, Ai Group launched a key policy paper, Addressing Enterprise Leadership in Australia, which identifies some key barriers to the improvement of leadership practices.
On reading the report, our position may seem hard-hitting. But the changes needed must be shared by all – businesses, government, the education sector, and organisations such as ours.
What is clear is that a step change is needed regarding the commitment to developing our leadership capability and evolving our organisational structures and systems if Australia is to improve its productivity and capacity to innovate.
Ai Group urges the following to kick start this change:
• Businesses must recognise that existing levels of leadership capability in Australia need to be improved.
• Organisations should be encouraged to cultivate a longer-term orientation and to consider how they create value for all stakeholders in the short, medium and long term.
• Australia must continue to reform its leadership and management education through context-specific programs. Equally, organisations must commit to a more complete approach to the development of their workplace culture and the leaders within them.
• Collaboration between our schools, academic institutions and business will be fundamental to innovation and sustainability – we’ve been ranked dead last for collaboration by the OECD (2013) out of 33 countries.
• Culture impacts on strategy and in the case of Australia it is impacting on our ability to innovate. We need to better understand how our culture at both the organisational and national level is impacting on Australia’s ability to remain competitive.
Ai Group is practising what we preach. We are committed to helping Australian industry and its leaders to thrive, and we are doing this by:
• working on furthering our understanding of Australia’s unique cultural barriers as they relate to our leaders and their ability to lead their organisations. This will help enormously in informing our development approach and methodology;
• forming alliances with relevant education partners to cultivate a longer-term outlook across businesses at the Executive and Board level;
• developing a leadership community where we can collaborate, offer insight, and discuss leadership challenges with industry;
• working with Government to advocate and support further reform in the education sector as it relates to management education;
• seeking out opportunities to collaborate in areas of practical leadership research relevant to Australia;
• continuing to develop leadership tools and information to support the practice of leadership; and finally by
• sharing and promoting leadership success stories from across our membership to celebrate exceptional leadership and recognising its importance.
Australia’s future, its level of innovation uptake and its ongoing competitiveness and sustainability will largely depend on the capability of our leadership and the changes we make now.