Monday, November 5, 2007

A Rare Breed

The bullshit that passes for accountability amongst our leaders; politicians and business leaders alike, makes a farce of the meaning of the word "leader".

What does a leader do Darren?

Well, it is quite simple really, even though some individuals in the positions that they find themselves in and in rarer and rarer cases those than actually achieve those positions, would like others to think that being a leader is a complex issue only understood by the likes of those with over sized craniums.

Being a leader as such is as straightforward as setting examples for those that you lead, for it is clear, even to a two year old, for those that observe a good leader doing good things are likely to model themselves on good behavior. Psych 101 really.

Conversely, bad behaviour by a leader will almost guarantee a negative culture: at the workplace or anywhere else for that matter.

Bad leadership flows down to individuals in a company. It can cause resentment among workers, gossip and it saps productivity, morale and effects the long term viability of the organisation or business.

The worst and most public example of leadership failure in New Zealand would have to be Teresa Gattung, the recent retiring CEO of Telecom New Zealand [TEL.NZ]

Her culture of blame, resentment, lies and underhanded competition at leadership level managed to pervade the company culture to such a core extent that any customer getting in touch with a customer services representative at Telecom would have been well aware that there was something going horribly wrong at head office.

Gattung was the head at that head office and she was fully responsible for the disastrous mess that she managed her way into while in tenure behind the big desk.

After leaving of course she was rewarded for her mismanagement with a bundle of cash and plaudits from other mediocre managers of other businesses and arse kissing mainstream "business media" who patted her on the back for "a job well done".

Excuse me!!

On the other hand, the quiet achievers like Don Braid, the CEO and Bruce Plested from Mainfreight Ltd [MFT.NZ]:

"As we grow to become a world player we must maintain our culture and style of business by keeping a strong grip on our policy of being anti-bureaucratic; continuing to allow branch managers to make bold decisions; being energetic and entrepreneurial; and so continue to grow our business.

Don Braid, GM 2007.

Braid and Plested lead from the front and as a result an excellent company culture has evolved. The workers love working there and most of all customers enjoy their contact with Mainfreight.

Without this strong, leader led, focused running of this business Mainfreight would no doubt be floundering in the extremely competitive business environment that they operate in.

Plested and Braid would be sorely missed if they ever left the company so hopefully they can pick a good replacement when that happens.

Given that company culture is so good, the likelihood is that other good leaders will emerge, thanks to the example set by Mainfreight's leaders.

The lack of accountability by leaders when things go wrong in an organisation or business is probably the biggest barrier to business excellence for the medium and long term in this country.

Corporate history in NZ is littered with the corpses of businesses mismanaged to the point of surrender and over the last 8 years the level of managerial incompetence has continued.

The difference over the last 8 or so years though is that management and specifically leaders of that management haven't been accountable or been made accountable by fellow board members, shareholders and customers.

We have had a litany of cases of unaccountable leaders recently. Tim Saunders, former director at failed Feltex Carpets has recently been voted back in as a director of Contact Energy Ltd [CEN.NZ] after being found by an independent body as being partly culpable for Feltex's demise.

Is it any wonder why those working at the coal face at Contact are suffering from low morale. Its CEO or its board should have summarily dumped Saunders. Totally the wrong message sent to the troops and not good for the long term health of the company, global warming fuzzies or not.

Countless heads at the restaurant operator, Restaurant Brands Ltd [RBD.NZ] have failed miserably at the helm, none of them were held responsible in any way, other than they were forced to leave, long after the rot of their management had set in. RBD continue to suffer this vacuum of leadership all the way down to store level and it is obvious in almost every aspect of the business, from the non responsive middle managers all the way down to the surly staff serving customers.

There is a more successful culture in low fat yogurt than at RBD head office.

Sky City Entertainment Group Ltd [SKC.NZ] CEO Evan Davies made a series of mistakes that ended in his being pushed out the door earlier this year but not before he resided over dramatically falling fortunes in gaming profits, a couple of bad asset purchases and a conflict of interest case when his wife was promoted to a position of significant importance in the company.

Davies was allowed to stay at the helm despite his failures because his fellow board members and Sky City shareholders failed to make him responsible and he himself failed to realize that he wasn't managing the company the way it should have been and to fall on his own gilt edged sword.

Management under him at the time are still there at head office and continue to run around like headless chooks wondering what to do, while bargain hunters are hanging around, presumably with better management skills, waiting to pounce on the mismanaged beast that is Sky City.

When is it that leaders will take responsibility for company success and its failures?

It will happen when others make them responsible for those failures. In the case of company leaders; shareholders, employees and customers fail to make them accountable and need desperately to do so.

It shouldn't be up to others to make individual leaders responsible though. Being taught to be a leader from an early age is the antidote to the sickness that we as a society are suffering in terms of leadership.

The New Zealand Prime Minister, Helen Clark, should be a leader to look up to but her copybook is unfortunately blotted with so much irresponsibility and lack of accountability the ink is turning into a sickly red and spilling over the whole corpse.

With good role models in New Zealand being as rare as 15 year old virgins it looks like the problem is going to get worse before it gets better.

Our socialist education system where it is taught that it is OK to lose and that the word"failure" has been erased from the school vocab to be replaced by the phrase "did not achieve" is certainly only going to make the problem of future good leadership a goal that is "not achieved".

Disclosure: I own SKC & MFT shares in the Share Investor Portfolio

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