Australian managers are a mediocre lot who haven’t mastered the basics such as performance monitoring, lack formal training and struggle to achieve targets, according to Australia’s largest survey of business leadership and the first major leadership study since 1991.
When they do make decisions, few senior leaders seek advice, leaving their organisations vulnerable to poor strategic insight and decision-making.
And the ranks of managers are still dominated in Australia by older men from English-speaking backgrounds. Women, younger leaders and those from non-English speaking backgrounds are under-represented.
The Study of Australian Leadership, by the Centre for Workplace Leadership at the University of Melbourne, interviewed almost 8000 people including CEOs, frontline leaders and employees in more than 2700 organisations.
The study reveals significant shortfalls in business performance, innovation and leadership development.
“The findings reveal a pattern of mediocre leadership in many organisations that will likely impair their capacity to shift to a knowledge economy and impede their efforts to raise productivity,” the study says.
- Managers rate themselves more highly than employees rate their managers
- 40% of Australian companies miss key performance targets
- Too few (18%) private sector organisations are at the forefront of innovation
- One-third of workplaces underperform on their sales target.
- More than 80% of senior leaders in large Australian organisations are male. Only 10% speak a language other than English at home.
- Two in five workplaces offer bonuses based on profits, yet nearly half do not.
- Highly unionised workplaces are more likely to offer clearly specified jobs, performance appraisals and training opportunities.
“This study suggests many Australian organisations need a reality check,” says Peter Gahan, the director of the Centre for Workplace Leadership.
“The danger for Australia is that the resources boom, now rapidly evaporating, has obscured the need to invest in the leadership capabilities required to deliver future growth and productivity.”
The study found many organisations are not getting basic management practices right, including performance monitoring, target setting and the appropriate use of incentives.
Only one third of display KPIs (key performance indicators) in a readily accessible and visible place, and one in three don’t provide employees access to KPIs.
Knowledge of performance targets is also limited, with only 34% of workplaces reporting that all employees — both managerial and non-managerial –- had access.
The report finds that the lowest levels of radical innovation are in mining, transport and postal businesses.
Public sector organisations were more likely than private sector organisations to have high levels of both radical innovation and incremental innovation (improving the efficiency of existing ways of working and expanding current markets).
The study also found a gap between managers’ perceptions of their own leadership skills and the way they are viewed by staff.
What staff think of their managers
Employees see their managers as less effective at things such as information sharing and gaining commitment than managers perceive themselves.
For example, while 84% of frontline managers believe they are effective in gaining employee commitment, only 50% of employees say their manager involves them in decisions.
Many workplaces do not invest in leadership development at all, or invest very little. And those that do often spend in the wrong places.
Recent evidence for the Asia-Pacific region, including Australia, shows that for every $10 spent on senior leaders, only $1 is spent on frontline leaders.
“Our advice to Australian businesses is to get some quick wins on improving management, but also take an urgent review of what leadership skills you need for the future,” says said Professor Gahan.
“Quick wins include taking a look at your basic management practices such as setting goals and communicating KPIs. Over the longer term organisations need to increase investment in leadership and ensure sufficient investment is being made at all levels, particularly front line leaders who have been shown to have a real impact. “
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