It is widely accepted that effective leaders are critical to organisational success.
But in times of economic uncertainty, when confidence is low and even short-term predictions are impossible, a good leader comes into their own.
Right now, all across Europe, organisations are depending on their managers to ensure that they continue to perform in the face of difficulty. As a result, we decided to explore which countries have the most effective ones and which the least.
To this end, between January 2009 and March 2011, we surveyed some 70,000 European employees and asked them to rate more than 14,000 bosses. We then presented the results using a weather map as an analogy, with the sun representing high-performing environments and storm clouds, demotivating ones.
What makes an effective leader?
Our ongoing research indicates that successful leaders create an environment or workplace ‘climate’ that energises employees and focuses their attention on the things that matter. Although it is intangible, this climate is by no means a ‘soft’ concept. In fact, there are six factors that have a direct impact on a team’s ability to perform effectively. These are:
- Clarity: everyone knows what is expected of them
- Standards: setting challenging but attainable goals
- Responsibility: employees are given the authority to accomplish tasks
- Flexibility: there are no unnecessary rules, policies or procedures
- Rewards: employees are recognised and rewarded for good performance
- Team commitment: people are proud to belong to the organisation
Not all of these factors need to feature highly in every team setting, however. Some environments will naturally lean more towards certain areas than others –flexibility is likely to be more important in an R&D department than a nuclear power plant, for example.
But whatever the mix, our research indicates, unsurprisingly, that teams with a good climate perform up to 30% better than those with a poor one. And the single biggest factor that has an impact on a team’s climate is the behaviour of its leader.
There are six key leadership styles, which comprise the:
- ‘command-and-control’ coercive style
- ‘vision setting’ authoritative style
- ‘participative’ democratic style
- ‘developing relationships’ affiliative style
- ‘high standards’ pacesetting style
- ‘development-focused’ coaching style.
It consistently appears that whichever style a manager uses will account for up to 70% of the variation in any given workplace climate. But high-performance environments consistently evidence one of four styles – authoritative, affiliative, democratic or coaching. Demotivating climates, on the other hand, are created by bosses with coerciveor pacesetting styles, which focus on undertaking short-term tasks.
The climate across Europe
Our latest research, however, paints a picture that challenges traditional stereotypes of an easy-going Mediterranean outlook and a more exacting Northern European attitude. When it comes to the workplace, the opposite is true, however.
While Northern European countries may suffer from a comparative lack of physical sunshine compared with their more southerly neighbours, in general, companies based in the region create a warmer environment for their workers.
Russia and the Ukraine lead the way, with just over half (55%) of managers in both countries building an energising or high-performing work climate for their staff, followed closely by Scandinavia (52%), Germany, Switzerland and Austria (49% respectively).
It appears that Northern European leaders tend to favour a democratic leadership style, which concentrates on gathering team input. The Benelux countries top the table in this regard, with about three out of five employing this approach. About 55% of Scandinavian and half of German, Swiss and Austrian bosses take a similar tack.
In the UK and Ireland, however, the most common leadership style is affiliative (53%), an approach that focuses on maintaining harmony and positive relationships.
But the tack taken by managers in Southern Europe is generally more ‘do what I say’ and coercive in nature. Some three quarters in South Eastern Europe – Turkey, Greece and Israel – were found to adopt a coercive leadership style as did the majority of Italians (72%), Portuguese (69%) and Spanish (68%). Three out of five French leaders also employed a coercive approach.
This style has its uses. It is particularly valuable in pressurised and crisis situations, but is typically only effective when used in short bursts. Managers who rely on this style on a long-term basis often cause their staff to become disengaged and demotivated by being overly directive.
And the results bear this situation out. Some 68% of Italian managers were, at worst, deemed to be creating a de-motivating or, at best neutral, climate for their workforce – the highest proportion in Europe. French and Spanish managers also came in a close joint-second, with 64% failing to create a positive working environment.
Creating the right climate: the role of HR
Although the concept of organisational climate is predominantly concerned with how leaders manage their people, HR also has an important role to play in improving the workplace environment and, consequently, staff and business performance.
The key to getting this scenario right is to create an awareness that leadership really does matter. Even the most senior executives in too many organisations still see themselves first and foremost as ‘doers’ rather than leaders. Changing the perception that effective leadership is not a part-time ‘nice-to-have’ but a must is a first step on the journey.
Generating such awareness, meanwhile, should be undertaken by providing feedback and development opportunities that are specifically focused on leadership. It is a constant source of amazement how few senior executives have ever had any meaningful feedback about their leadership abilities (or lack thereof).
As the conscience of the business, the HR function has a critical role to play here, particularly in relation to managing performance and designing incentives.
Creating a positive, high-performance climate will not happen overnight. Instead it will require a cultural reorientation away from an over-emphasis on short-term performance and ‘hitting the numbers’ to a more sustainable long-term approach to doing business.
Graeme Yell is a director at management consultancy, the Hay Group.
