Business Basics 6: Leadership and Management

I have been reminded this week that so much of business comes down to leadership and management at the top level. In particular the way in which senior people set the values and tone of an organisation. You might call it the predominant meme of the business.

By leadership, I am not thinking of the sort of problems that have been in the papers recently about the role of John Terry as Captain of the England team – whatever the ethics and morals of that situation the management issue there is about relationships within the team.

When I started in consulting one of my drivers was to help improve the status and delivery of purchasing within businesses. My view was that this important function was undervalued, under resourced and misunderstood in many organisations.

This week I was at a seminar at Bradford University on Innovation, which emphasised how easy it is for management to accidentally prevent innovative behaviours in their organisations by not showing behaviours that will encourage innovation, such as experimentation, broad thinking and (that most difficult thing to accept) failure.

It is quite easy to see both of these as functional issues, and indeed tackling them functionally is part of what we do as a consultancy. However it is also clear that the problems of both of these vital business activities can easily arise from failures in general business management and leadership.

Senior managers have difficult and demanding jobs, and naturally they tend to pay the most attention to the areas that they understand in detail – which are usually the areas that they previously worked in. Which is only natural, but some functions then get stuck in a catch-22 like cycle where they get little attention because they are not a route to senior management roles, and therefore no senior manager understands them and gives them special attention.

The senior management also set the tone for communication within the business. A positive outlook can be essential for success in a business, but if that slips into a refusal to listen to negative comments a business may lose the opportunity to solve problems quickly at an early stage. A focus on improving standards may stifle trying out new concepts and ideas. A culture of success may actually encourage staff not to do anything untested in case it is not successful.
It is difficult to get the balance right, but senior managers have to be aware that they set the tone for the business, and that although company culture is a very difficult thing to pin down and measure, it is vital to the success of a business.