The majority of respondents in a recent global leadership study are “distinctly unimpressed” with their leaders and up to 60% have actually stopped buying altogether or bought less from a company over the past year because of poor leadership.
The 2013 Ketchum leadership Communication Monitor (KLCM) was conducted across 12 countries, including South Africa, and found that people do care a great deal about effective leadership and there are distinct characteristics of effective leaders.
The data provides extraordinary evidence that the quality of leadership – especially the leader’s communication skill – links directly to buying what the leader is selling. Imagine the impact of a 60% reduction in revenue, or votes, or members?
This is the ‘blueprint’ that the study reveals for effective leadership: leadership credibility hinges on a blend of decisive action, open communication and a leader’s personal presence.
Global research findings:
- Business and non-profit leaders performed relatively well, although that superior leadership performance was very relative indeed – just 34% rated business chiefs as being effective leaders and only two in five believe they are delivering against expectations.
- But far worse than business leaders, our representatives in government, labour organisations and the community simply aren’t representing. Political, union and community leaders scored poorly across pretty much every measure and each of these three leadership groups achieved a lowly 26% on communication effectiveness.
- Viewed by industry, the technology sector stands out as the clear victor across all industries and on every metric – markedly extending its advantage on leadership to 14 points ahead of its nearest rival, and also coming out on top on both communication and responsibility. The sector’s combination of quality products and services, a focus on innovation, putting the customer at the heart of what it does and establishing trust provides a compelling model for other sectors to consider.
- Short-term thinking and buck-passing by leaders stand out as major areas of public concern. Fewer than three in 10 feel leaders take appropriate responsibility when they or their organisations fall short of expectations, while more than six in 10 say that admitting mistakes is a very important leadership attribute. Interestingly – given the rampant stereotypes about corporations’ obsession with quarterly results – only business and non-profit leaders are viewed as prioritising longer-term considerations over short-term imperatives, at 61% and 55% respectively.
- To compound this generally dim view, leaders of all kinds also saw their score for communication effectiveness plummet compared with 2012, with a 28% gap between expectation and delivery on ‘communicating in an open and transparent way’. This was the largest gap of any leadership behaviour and particularly worrying as this remains the number one attribute of effective leaders, albeit marginally down on last year’s study results in terms of importance.
Behind the poor headline figures, there remains a sizeable 21% point gap between expectation and delivery. And importantly, leaders are continuing to underperform on the very behaviours viewed as the most important to effective leadership – open, transparent communication, leading by example, admitting mistakes and handling controversial issues calmly.
How does this translate to the bottomline?
In 2012, Ketchum found a significant (40%) correlation between positive perceptions of a leader’s communication and directly business-relevant decisions by consumers, such as the willingness to invest in stock and to recommend a company’s products or services. Indeed, 50% of perceptions of a leader’s overall effectiveness in 2012 were tied to his or her communication proficiency.
In 2013, the research has revealed an even more direct impact on the bottom line. In the past year, 60% of people stopped buying, or bought less, from a company due to poor leadership behaviour. Conversely, good leadership is an inducement to start buying, but its positive effect is not nearly as powerful as bad leadership’s damaging impacts. In the past year, below-par leadership performance led 44% of respondents to boycott a firm’s products and services, and 51% buy less of them – while positive leadership perceptions acted as a reason to start purchasing a company’s products and services for only 42% of respondents or for 36% to buy more.
South African leadership results:
- Business leaders (39%) are the most effective category of leader according to South Africans, followed by leaders of non-profit organisations (30%). Similarly, 42% of South Africans feel that business leaders are the most effective communicators followed by leaders of non-profits (30%). Political leaders are the least effective communicators in South Africa (14% compared to 26% globally).
- 91% of South Africans feel effective communication is important to great leadership, higher than the global average (75%) and higher than any other included country.
- Building trust and ‘walking the walk’ are crucial for leadership in South Africa, at the individual and industry level. More than most countries, South Africa feels that leading by example (81% compared to 65% globally) and communicating in an open and transparent way (80% compared to 66% globally) are important behaviors to be considered an effective leader. South Africans cite ethical business practices (53% compared to 37% globally) as most important for a company to demonstrate to be considered a leader, followed by trustworthiness (51% compared to 48% globally).
- By far, South Africans view the technology industry (47% compared to 43% globally) to be the industry demonstrating the most effective leadership, followed by the hotels, leisure and tourism and automotive industries (both at 32% compared to 29% globally). The technology industry also outpaces other industries as the most effective at communicating (56% compared to 44% globally), and taking appropriate responsibility when they or their organisation falls short of expectations (38% compared to 34% globally).
- South Africans feel business leaders and leaders of non-profit organisations (both 29%) take appropriate responsibility when they or their organisation falls short of expectations. Conversely, only 9% of South Africans feel political leaders take appropriate responsibility.
- South Africans have strong opinions on how a leader should handle a time of crisis. Consumers feel it is most important for a leader to provide a clear and timely action plan to rectify the situation and define the problem properly and commit to identifying real solutions (80% each compared to 61% each globally).
- 67% of South Africans have purchased less of a company’s products and services due to the behavior of a company’s leadership, and 60% have stopped purchasing a company’s products and services for this reason.
- South Africans think that in 2013 leaders need to be open and honest about the nature and scale of the challenge ahead (70% compared to 59% globally) and provide a clearer overall vision for how economies, businesses and other organisations can survive (55% compared to 50% globally).
- Half (50%) of South Africans feel that leading by example is most likely to grow in importance over the next 10 years, compared to 36% globally.
- While only 6% of South Africans have more confidence in political leaders looking towards 2013, 27% have more confidence in business leaders. South Africans, more so than any other country, feel that political leaders are focused on short-term considerations (76% compared to 60% globally), as are union leaders (77% compared to 64% globally).
- More than half of South Africans (59%) feel that leaders aged 35-50 are most likely to navigate through challenging and rapidly changing times over the coming 3-5 years (62% globally).
Leadership that works – trends identified in the 2013 study:
- THE GOOD LEADER FORMULA: Open communication + decisive action + personal presence continues to be the magic formula for today’s credible leader – and tomorrow’s. That hasn’t changed, reinforcing the three-part balancing act suggested by the 2012 research and indicating a sort of timelessness to good leadership.
- DON’T SPIN ME – TALK TO ME: Around the world, people crave leaders who are honest about future challenges, clear in how to deal with them, collaborative in finding solutions and practical in their actions. This is particularly the case in a crisis, where honestly acknowledging the problem and acting decisively to fix it are seen as essential to good leadership.
- BE HONEST, SELL ME GOOD STUFF AND TREAT ME RIGHT: Trust is still the top corporate leadership attribute (up two points to 48%), but the importance of caring for and serving customers with the right products has risen sharply. Indeed, providing quality products and services rose five points to tie for first place among the attributes that establish corporations as leaders.
- TRUST YOUR TEAM AND PEOPLE TRUST YOU: The CEO and other senior management rank only sixth and seventh as credible sources of information on a company. This means that excellent relationships with employees and expert commentators is an essential, not a nice-to-have. They are the people who will do most to determine your brand’s credibility.
- DEATH TO THE SAY-DO GAP: The need to close the gap between words and deeds will only grow in urgency for leaders over the next decade. Almost two in five say that open, transparent communication is the leadership attribute most likely to become more critical over the coming decade, followed closely by leading by example, having a clear long-term vision, admitting mistakes and making tough decisions.
- TOMORROW’S LEADER IS TODAY’S – BUT FASTER, HIGHER, STRONGER: Building and inspiring teams of people who will build the future together, turning complex problems into opportunities, and discerning a clear future through the fog of today will be the mark of tomorrow’s leaders. Those are the leadership behaviours set to rise up the agenda in the next 10 years.
- OVER TO YOU, HOT STUFF: By a striking margin, rising-star Generation-X leaders (aged 35-50), who have patiently waited to take the reins from Baby Boomers, are now squarely in the spotlight, with the old guard and young Turks less trusted to define the future. A striking 62% are looking to leaders aged 35-50 to navigate the world through challenging times, while only 25% want 50-64 year-olds to hold onto the wheel and 10% expecting most from 18-34 year-olds.
Source: Magna Carta/Ketchum
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