Australian Business Leaders Survey

Landmarking Leadership

Over a period of great change in business, the Australian Institute of Management has supported research to record the development of Australia's corporate leaders and executives. By Jason Day, Management Today, May 2007.

The contribution of leaders and managers to Australia's last decade-and-a-half of economic growth is immeasurable. While politicians and economists will argue over who or what should get credit for it – good economic management, industrial policy, commodity demand, retraining, an exhausting work culture and so on – it is important to remember that people as leaders drive growth with a blend of ambition, vision and skill.

If we go back in time to 1995, David Karpin, as Chair of the Industry Task Force on Leadership and Management Skills reports in the Task Force's Enterprising Nation: "increasing globalisation, technological innovation and pressure on business to customise products and services" stemmed from a global environment unrecognisable to managers of 15 years earlier. Imagine what he'd think of the changes since then.

Karpin was reporting to the federal government on measures to strengthen management development and business leadership, and he identified the challenge to implement strategies for "better leaders and managers" to compete internationally. Knowledge of the state of leadership in Australia is, perhaps, never more valuable than now.

The Australian Business Leadership Survey (ABLS) was conceived on the heels of the work of the Karpin Task Force, and the Australian Institute of Management began to research, over time, Australian corporate leaders and their opinions on how they lead.

A big undertaking

An outstanding undertaking in four major phases, the ABLS lays claim to being one of Australia's largest ever studies into managers' and leaders' behaviour. The ongoing research provides a timeline of findings through a period of great change – the dotcom boom and bust, GST, September 11, and the expansion in mobile telecoms and cheap flights – to an era with virtual and borderless business.

The ABLS has researched leaders' opinions during these challenges, as business and governments have been forced to reskill and upskill for more flexible business practices. ABLS also provides a mine of data on where leaders have come from, and insights into the pathways they see in the future.

Structure

A joint venture of the AIM and the Department of Management at Monash University, the ABLS was conceived as a mixture of qualitative and quantitative research to record the results of questions to leaders, such as:

  • how corporate leaders lead, and leadership styles
  • the outcomes of their leadership approaches
  • the cultures of the organisations they lead, and
  • how workers feel about their organisations.

The outcomes have been powerful and the findings resonate not only for businesses, but have significance for governments as they lay the platform for innovation in product and service, for cutting red tape, for the development of good organisational culture and for encouraging entreprenuerial spirit and vision.

The four major phases of ABLS research so far (see below) have involved self assessment, thus revealing executive Australia 's own perceptions of how they lead. ABLS focused on leadership methods, not approaches, and categorised these into two predominant styles:

  • transactional leadership, based on transactions between leaders and followers, such as providing rewards, managing by exception like pre-empting mistakes, or acting when something goes wrong.
  • transformational leadership, based on motivating others to do more than they wanted through charisma, acting as a role model, inspiring by vision, stimulating intellect, or coaching the individual.

(Demographics from the the first ABLS study were: 76 per cent male, 24 per cent female; 71 per cent of the male executives were aged 40-59; 69 per cent of females were aged 30-49; 42 per cent of all respondents were in administration; 57 per cent earned $60,000-$125,000 per annum; small-to-medium enterprises made up 62 per cent of the sample.)

ABLS (quantitative 1)

Quantitative study of 1918 survey returns from a random sample of 5000 AIM members. Examined leadership vision, style and organisational outcomes as a result of that leadership approach.

ABLS (qualitative 1)

Qualitative responses from 511 respondents from the first ABLS quantitative study who provided an answer on "other issues", plus telephone interviews with a further 129 executives.

ABLS (quantitative 2)

Quantitative study of 2376 survey returns from a random sample of 6000 AIM members examining relationships among organisational leadership, culture and innovation in Australian enterprises.

ABLS (qualitative 2)

Qualitative study with telephone interviews with 52 executives from second ABLS quantitative study.

ABLS (Quantitative study 1, 2000)

ABLS looked at leadership, organisational culture and job outcomes. Conclusions from the study highlighed a view of Australian leaders on the cusp of major changes in the way they lead and worked generally: executives were more aware of and willing to use transformational leadership behaviour to achieve results. The findings confirmed what we can see in many companies today:

  • that the more transformational leadership is used, the greater the leadership outcomes
  • the more performance orientated, socially responsible and supportive the organisational culture, the more trusting, loyal and committed the workers are in those circumstances.

ABLS adds to the body of existing work identifying what leadership factors are most associated with specific cultures and job outcomes. It tells us that to continually build and improve the state of Australian leadership, companies have had to identify leadership potential at an early stage, and implement training and development.

Further, the study urged companies to note the linkages of corporate culture and job outcomes by rewarding performance in order to build trusting and committed employees who, in turn, could feed into supportive responsible cultures. Confirming a steady growth in the education of business leaders, and an undoubted factor towards Australia 's international competitiveness, 65 per cent of ABLS participants had formal qualifications at undergraduate or postgraduate level, exceeding the findings of the 1995 Karpin report (35 per cent).

ABLS (Qualitative 1, 2000)

A large number of executives, 129, who participated in the quantitative ABLS showed a willingness to be interviewed on issues affecting Australian business leadership. The results turned up the following issues:

  • professional development issues such as the need for "continuing professional development" and "support structures for leadership"
  • strategic leadership issues including those of "managing in complexity" and "personal skills"
  • communication skills concerns such as "communication", "inspiring others" and "clear goals and vision"
  • values and ethics issues.

The key issues impacting on leadership were government policy and intervention, as well as internal human resource issues. Dealing with these and other concerns relies on a flexible leadership approach and ongoing professional development.

Significantly, companies were seen to be innovative and entrepreneurial in less than a fifth of all cases, indicating the need for ongoing leadership involvement in these imperatives. The data revealed that innovation and entrepreneurship in Australian companies registered low responses and perhaps indicated an ongoing malaise in developing these enterprise cultures.

The top issues of most importance to executives were:

  • the impact of external and internal issues
  • leadership development
  • leadership and culture
  • trust and commitment
  • leadership challenges and change.

ABLS (Quantitative 2, 2005)

The second quantitative study explores the linkages among leadership, culture and innovation in Australian enterprises. Most outstanding of all perhaps is that the result suggests that Karpin's 1995 recommendations, such as a more diverse workforce and higher levels of formal qualification, were being achieved earlier than was expected. The reason? Massive competition and growth.

However, the results also indicate glaring deficiencies in how far companies would go in providing the resources and time to achieve these outcomes. In particular, innovation as a cornerstone of competitiveness is a concern, as was a need to shorten the time lag between remaining competitive while becoming innovative. Specifically, the results indicate that while Australian managers are supportive of creativity, they are not as supportive in providing sufficient resources for innovation and the means to achieve creative endeavours.

Further, smaller-sized organisations report higher levels of innovation. The conclusion is that to build transformational and innovative workplace cultures, companies need to enhance the transformational behaviours of their leaders, build socially responsible and supportive workplaces, and provide the flexibility and resources to sustain these innovative cultures.

Industries associated with high levels of innovation:

  • building construction (in supporting innovation itself as well as non-conformity)
  • banking and finance (in supplying the resources)
  • manufacturing (in resource supply and support
    for creativity).

In all cases, government-associated organisations registered the lowest levels of innovation, followed by education and health providers.

ABLS (Qualitative 2, 2005)

Telephone interviews with the 52 executives who took part provided the following highlights:

  • Australian business leaders actively work on providing appropriate leadership and fostering healthy, positive organisation cultures.
  • the willingness of leaders and followers to work collaboratively is an important factor in success, and achieving high levels of collaborative effort requires bringing in new people.
  • the experiences of leaders suggest that systems and leader/follower dynamics are critical factors in determining the effectiveness of leadership style.
  • a strong correlation exists between the value leaders place on employee learning and development and the organisation's culture, openness to change and capacity to innovate.
  • in recent years, advances have been made in increasing the level of openness to change.
  • most participants do not believe that a lack of financial resources hinders the capacity of their organisations to be innovative.

Who ABLS can benefit

Today, companies have to compete aggressively in changing marketplaces and increasingly international marketspaces: globalisation requires an international perspective and approach to business.

ABLS provides both a confirmation and update of Karpin's findings that managers must become more global in orientation, more diverse in workforce, more formally qualified, and more innovative.

The outcomes from the Australian Business Leadership Surveys are valuable sources of information for leaders and managers, management teams, aspiring senior managers, people who want to make a difference in the workplace, researchers, graduate students, and people who are engaged with the business of business. ABLS concerns itself with identifying strengths and weaknesses in Australian culture and Australian leadership, levels of job satisfaction and stress, and an array of issues of which business needs to be aware. Policymakers can benefit, too. In comparing the public sector, not for profit, and private sectors, ABLS found that not-for-profits tend to be more inclusive on sharing, the public sector less so, while private enterprise generally came third in terms of introducing innovative practices and stronger organisational culture. That's knowledge that can be put to good use.

Continuing leadership research

In continuing its research into leaders, AIM is now planning to look at age and experience as they relate to the leadership style and the effectiveness of managers. With an ageing workforce, it is important to understand the effects of ageing on work performance, particularly the impact of ageing on leadership style and effectiveness. While there has been very little research on ageing and leadership or management effectiveness, there has been a great deal of research on the effects of ageing on aspects of cognition and personality. The study will link this research to test theories about the effects of age on leadership effectiveness, and will examine age related changes including personality, intelligence and emotional intelligence.

ABLS reports are available from www.aim.com.au.

Jason Day is the Editor of Management Today.


Academic staff who conducted the ABLS research:

Professor James C. Sarros – project leader, acting Head of Department of Management, Monash University

Associate Professor Judy Gray – Faculty of Education, Monash University

Associate Professor Iain Densten, University of NSW (ADFA)

Professor Ken Parry, Griffith University

Dr Anne Hartican, Director, CLiC Consulting

Brian Cooper, Research Fellow, Department of Management, Monash University

Carolyn Barker, AIM Project Manager

The Australian Leaders Profile

1970 - The autocrat

  • Male
  • Anglo-Celt, British or Australian citizenship
  • Started as message boy, rose through ranks. All management training on-the-job.
  • Very local focus, possibly one Australian state. Has travelled once, to England.
  • Established competitors, cartels.
  • Paternal view of workforce.
  • Stable environment. Relatively low stress, home to see kids most nights, long-term position.

1995 - The communicator

  • Male
  • Anglo-Celt, Australian citizenship.
  • Graduate, possibly postgraduate qualification. Career in corporate centre. Product of internal management development program.
  • Expanding focus, travels regularly to Asia, the United States of America, Europe.
  • Recently deregulated marketplace, rapidly changing competitors.
  • Sees workforce as stakeholder in business, working hard on communication and information sharing.
  • Turbulent environment. High stress, long hours, fears burnout.

2010 - The leader/enabler

  • Male or female
  • Wide range of ethnicities, citizenships.
  • Graduate, probably MBA or AMP as well. Wide ranging career, many placements. Product of major development program including placements.
  • Global focus, travels regularly. Has lived in two or more countries.
  • Manages in both regulated and deregulated economies.
  • Manages workforces in several countries. Shares information and delegates heavily.
  • Environment typified by rapid change. Limited term appointment, high pressure, results driven.

2015 - The leader/innovator*

  • Male, and increasing proportions of female.
  • Diverse ethnicities, more international in outlook.
  • Graduate, more executives with doctorates, greater international business relationships. Product of formal coaching and mentoring programs.
  • Global, dynamic interactions 24/7, frequent overseas travel, property ownership in two or more countries.
  • Heavily deregulated business economy.
  • Virtual leadership approach due to dislocated workforce on many continents – information sharing a necessity. Uses innovation to renew and grow business.
  • Dynamic and unpredictable business horizons due to global, environmental, political, social, and economic shifts. Work life integration has been mastered.

(Task Force Research: Boston Consulting Group 1995 report. *ABLS Research: Australian Institute of Management 2007).


ABLS Summary

Download the Australian Business Leaders Survey Key Findings [PDF; 550KB]