Do Australian leaders have what it takes?

Major new management research undertaken by the Centre for Workplace Leadership has questioned the capabilities of Australian leaders.

Surveying almost 8000 individuals, from baseline employees up to CEOs, The Study of Australian Leadership  is the largest of its kind ever undertaken in Australia. It’s also the first in more than 20 years to ask whether Australia has the capabilities to meet future challenges and remain competitive.

The findings of the study reveal that Australian organisations should be concerned about the state of leadership and management capability, as identified by managers themselves. The following seven gaps and weaknesses were highlighted:

  1. Many Australian workplaces are underperforming: More than 40% are not meeting performance targets and one third underperform against their sales targets.
  1. Many Australian organisations do not get the basics right: Many leaders and managers fail to master basic management fundamentals such as performance monitoring, target setting and the appropriate use of incentives.
  2. Few Australian organisations report high levels of innovation: Only 18% of private sector organisations report high levels of innovation. Without high levels of innovation, growth and productivity are impeded.
  1. Many Australian leaders are not well trained for the job: A high proportion (one in four) of senior leaders in private sectors have no qualifications beyond secondary school. Formal education is not the only path to successful management and leadership, but it remains an important foundation for a diverse range of skills.
  2. Too many organisations underinvest in leadership development, especially at the frontline: The study revealed that investing in leadership development is positively correlated with workplace performance and innovation. Yet the findings reveal that many workplaces are investing little or not at all in leadership development. For those that do invest, it is often in the wrong areas. Recent evidence for the Asia-Pacific region shows that for every $10 spent on senior leaders, only $1 is spent on frontline leaders.
  1. Leadership in Australian organisations does not reflect wider social diversity: Diversity is associated with greater creativity and innovation, improved productivity, and higher employee engagement and commitment. Leadership in Australian organisations is dominated by older males from English speaking backgrounds. Women, younger leaders, and leaders from a non-English speaking background are underrepresented.
  2. Many senior leaders do not draw on strategic advice in making decisions about the future: Few leaders seek advice from external sources such as associations, consultants, experts or other senior leaders in their industry or elsewhere. In the current environment marked with disruption and uncertainty, this leaves organisations vulnerable to poor strategic insight and decision making.

The study paints a concerning picture about the current state of leadership in Australia and mirrors much of the discussion in Ai Group’s 2015 policy paper, Addressing Enterprise Leadership in Australia. On an international scale, Australia’s ranking in leadership and management efficacy has been falling against a number of measures over recent years. So how can Australia lift its leadership capabilities in order to enhance innovation, productivity and sustainability?

The positive relationship between investing in leadership development and improved workplace performance, employee engagement and ability to meet KPIs has been well documented. In light of this, it is imperative that organisations direct their attention to longer-term value creation, and understand how best to develop effective leadership capabilities at all levels. The overarching message of the study is that investing in leadership capability pays.

Ai Group is committed to improving Australia’s leadership capabilities and works with organisations to link business strategy and key drivers with a sound leadership strategy and associated development needs. A range of tools are used to implement leadership strategy solutions including cultural reviews, individual and team diagnostics, executive and team coaching, customised programs and on-the-job leadership learning projects. Our leadership development programs are tailored for new, developing and mid-level leaders. 

Contact us for further details.

Has your organisation identified a gap in leadership skills? And have you developed a response to address the problem? Share your experiences and ideas below.

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Katherine Cashmore
Katherine Cashmore is a Graduate Education and Training Project Officer in Ai Group's Education and Training Policy Team. Her projects currently include research on the new gig economy and its implications for business; analysing data collected from companies concerning their workforce education and training issues; and developing and circulating information on employability strategies to assist employers. She has a Bachelor of Commerce from the University of Melbourne.
Katherine Cashmore

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