INSPIRED LEADERSHIP

"Insights into people who Inspire exceptional performance “

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CONTENTS PAGE

1. Introduction 3

2. Overview of Key Conclusions 7

• What is it that singles out truly inspirational leadership

from the rest?

• What practical examples are there to help leaders inspire

exceptional performance?

• How leaders can listen and keep in touch

• How leaders demonstrate trust in employees

• How leaders show thanks and appreciation

3. Quantitative E-Survey 14

4. Qualitative Results 25

5. What Happens Next? 34

Appendix 1: Outline Project Plan 35

Appendix 2: Mapping The Three Perspectives 37

Note: The DTI acknowledges the help and assistance that the Chartered Management
Institute have given in carrying out this research.

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Introduction

The Inspiration Gap

It is now accepted that for the UK to maintain its competitiveness there is a growing need for
companies to adopt strategies that will enable a greater level of innovation and the provision
of higher value goods and services.

Consequently we have seen significant changes in what is required of good leaders over
recent years. Indeed, those organisations whose leaders do not respond to these required new
ways of working will undoubtedly face serious problems in an ever more uncertain future.

As recently summarised in the DTI 2003 Innovation Review1, the literature clearly shows that
high performance, innovative organisations require: “Inspirational leadership, stronger
management skills, a highly-trained and motivated workforce, a flexible labour market that
promotes diversity and fair treatment, and workplaces that recognise environmental issues
and the need for greater resource productivity”.

However, this combination of attributes that result in successful workplaces is all too rarely
in evidence. In particular, the work of the Council for Excellence in Management and
Leadership (CEML) reveal significant shortages in leadership skills that relate to:

• Creating a sense of vision in a fast changing environment

• Motivating people and leading them through change

• Being innovative in products and services and ways of working

A major survey of nearly two thousand managers by the Chartered Management Institute and
Demos, in 2001, which built upon the work of the Council for Excellence in Management
and Leadership, revealed a significant inspirational gap in the leadership across UK
organisations.

The single most important factor most people would like to see in their leaders (highlighted
by 55 per cent of the sample), was “inspiration” However only 11 per cent actually saw this
“ability to inspire” in their leaders. With the top two attributes actually observed being
“knowledge” and “ambition”.

Addressing the Gap

This “Inspired Leadership” research project has been developed to explore how to start
closing this critical leadership “inspiration gap” to achieve

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Competing in the global economy: the innovation challenge, December 2003
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optimum employee engagement and the resulting high levels of innovation and performance.
Throughout 2002 to 2003, three complementary workstreams were undertaken, designed to
contribute to the development of an “Inspirational Leaders Index”.

• A comprehensive literature review of successful leadership, and personal interviews

with 38 top leaders nominated by their peers as having achieved exceptional results.
• Two separate studies among followers from the management population.
• An e-survey with 568 respondents followed by telephone interviews with 100
managers to explore in more detail some of the key issues raised by the quantitative
research.

The Index will enable chief executives and directors to identify and assess their key
leadership behaviours and values that have a significant impact on inspiring “followers” in
their organisations.

The organisational viewpoint

This work builds on several DTI “business learning from business” best practice
programmes2 – and is being supported by a number of lead partners (including CBI, Work
Foundation, IoD, Investors in People (UK), British Quality Foundation, the Chartered
Management Institute, the Strategic Planning Society, Learning Skills Council, SMMT,
DfES, SSDA, Civil Service College, SEEDA, NWDA, SBS, SBC, ACEVO and Cabinet
Office). The work is providing a number of powerful pointers as to what makes for
inspirational leadership.
From the work and survey outlined above and the development of best practice case studies,
the following six essential elements of “inspirational leadership” were highlighted.
They:

• Genuinely care about their people

• Involve everybody
• Show lots of appreciation
• Ensure work is fun
• Show real trust
• Listen a lot

In order to discover how these elements can be better realised in practice, a comprehensive
research project was designed to look in more detail at the qualities of inspirational leaders.
This idea was to explore whether there is a clear pattern in the way exceptional leaders
behave, act, and inspire.

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These programmes include Partnerships with People, Living Innovation, and the “100
Best Companies to Work For”.

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The approach chosen for this phase of the research was to examine the values of those leaders
who had been successful in creating exceptional results in their organisations and also the
perspective of “followers” who were best placed to describe how such leaders motivate and
inspire them on a day-to-day basis.

In carrying this work out, the following assumptions were made:

• Effective leadership is a pre-requisite for successful change and innovation

• Many organisations do not recognise the cost of failing to address a leadership deficit
• Leadership is about what leaders do in relation to others, as well as who they are as
individuals

The view from the Leaders

A series of in-depth qualitative interviews with leaders who had been selected by peers as
having achieved exceptional results, revealed common themes in terms of their most
prevalent leadership characteristics:

• Strong communication – storytelling and listening

• Passion for learning and intense curiosity
• Focus on developing people
• Having fun and very energised
• Strong self-belief, coupled with humanity and humility
• Committed to giving something back and to making a significant difference
• Clarity of vision and ability to share it with their people
• Dogged determination and often “ relentless”
• Very strong focus on priorities
• Not afraid to show some vulnerability
• Regular use of reflective periods
• Almost universal dislike of jargon
• Passion for and pride in what they do

The view from the followers

Not surprisingly, many of the leadership qualities desired by the ‘followers surveyed also
reflect the views of both exceptional leaders and the findings from best practice case studies:

• Genuine shared vision

• Real confidence and trust in their teams
• Respect for employees and customers
• Commitment to developing people
• Clear standards of ethics and integrity
• Willingness to take risks

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Appendix 2 (see Page 37) contains a matrix of the agreement across the three perspectives. It
also provides an indicative measure of the gap between desired leadership qualities and those
experienced in reality.

Search for inspiration

Given that there is now such a shared understanding and agreement of the basic tenets of
inspirational leadership, why is there the need for further research?

Headline findings from the followers’ survey clearly demonstrate that the majority of
organisations are still not providing a culture that is engaging the hearts and minds of their
employees:

• “Leaders are genuinely in touch with how people are feeling” (62 per cent disagree)

• “We work hard but senior management makes sure we have fun (54 per cent disagree)

• “There is a good buzz and feeling of energy (50 per cent disagree).

The latest research

This report is based on the results of three interlinked pieces of research:

• A comprehensive literature review of successful leadership, and personal interviews

with 38 top leaders who were nominated by their peers as having achieved
exceptional results. The interviews looked at what are the specific personal drivers
and characteristics of inspirational leaders.
• Two separate studies among followers from the management population (carried out
during October to December 2003 by the Chartered Management Institute).
• An e-survey with 568 respondents was followed by telephone interviews with 100
managers to explore in more detail some of the key issues raised by the quantitative
research. (See Sections 3 and 4 of this report for more information)

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Overview of key conclusions

For the past 30 years there has been increasing amounts of data to suggest that leadership has
a lot more to do with inspiration and vision, rather than straightforward technical
competence.

Leadership is now recognised as a transferable skill, it can be developed by continued

learning and development throughout a person’s career. By contrast, the Great Man theories
of leadership and cults of personality are now seen as largely irrelevant in a fast-moving and
much less hierarchical world (see Pedler, Burgoyne and Boydell, 2004).

This latest DTI research report based on a new study carried out in 2003 among 568
followers at different management levels working in a wide variety of UK organisations,
confirms that today’s workforce is more diverse, informed and sophisticated than ever before.
Ultimately people are still looking for something different and better in organisational
leadership.

The research found that managers demand visionary leaders who win not only results, but
also the trust and respect of their teams. It is the relationships between people that result in
actions. Followers will respond to leaders who let them know what they do is important and
that it makes a difference.

Clearly most organisations are not the stable, predictable structures of the past. Keeping
followers motivated and committed in an era of unrelenting change, means that leaders must
be able to create organisational cultures that foster not only performance, but also a sense of
pride and fun.

Because cultures evolve over many years and are usually deep-rooted, they can be difficult to
change. Some commentators have observed that it is easier to change behaviour by changing
processes and systems in an organisation than it is to change peoples’ attitudes. While goals
change in the course of a person’s life, values tend to remain constant and help determine an
employee’s attitudes to their employer.

The 2003 research suggests that over half of managers are working for organisations which
have apparently not yet fully evolved to meet the needs of today’s high performing
workplaces. Too many experience excessive bureaucracy and command and control
behaviours, which have a tendency to inhibit, rather than improve, individual and
organisational performance. Bureaucratic and authoritarian command and control structures
are still too prevalent in UK organisations.

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What is it that singles out truly inspirational leadership from the rest?

Key findings from the followers’ perspective:

Managers confirm that individuals and teams who are inspired and enthused will operate at a
different level from the competition. In this context the study reinforces the important
influence of organisational culture on performance and results.

61 per cent of those working in a participative environment (compared with 40 per cent from
command and control cultures) were much more likely to rate their organisation’s financial
performance as better than others in their sector.

Around one-third of followers admit that they have never worked for, or been motivated by,
an exceptional leader in their lives. Outside of the work context, many appreciated the
inspirational role played by sporting coaches and teachers or professors.

Over 60 per cent of followers report that their leaders are out of touch with how people are
feeling. This remoteness and distance has a negative impact on morale and motivation levels.

Giving people space and responsibility, and recognising and believing in their abilities,
remain the most effective and powerful ways to motivate followers - participative rather than
command and control cultures tend to encourage these behaviours.

Followers believe that their leaders are kept awake at night worrying about performance
targets, achieving bonuses and competitive pressures rather than people issues.

Although many organisations claim that people are their greatest asset, when it comes to
measuring performance, 80 per cent of organisations measure in financial terms. Employers
also need to consider other less tangible criteria such as employee satisfaction levels and
innovation/creativity. Only one in seven organisations takes employee satisfaction into
account in this respect.

This finding is probably linked with the finding that followers do not, on the whole, see their
leaders creating a feeling of energy, fun and excitement in the organisation – 93 per cent
identified this a key leadership attribute, yet only 32 per cent are actually experiencing this
closer to home.

Some organisations are better than others in generating a good buzz and fun in the workplace
- smaller firms with fewer than 20 employees for example tend to be more successful in this
respect.

It is concerning that only a third of leaders are currently creating a feeling of energy in the
organisation. Perhaps this is linked with the finding that

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managers are weary of working for poor communicators - only 43 per cent could agree that
their leaders listen more than they talk.

Table1: Results from telephone interviews with followers - leadership behaviours desired v
experienced (see Section 3)

Base: 100 Want leaders in Saw demonstrated Gap

general to in own organisation
% %
Create a feeling of energy, fun and 93 32 -61
excitement in the organisation
Be good communicators and listen 96 43 -56
more than they talk
Encourage creativity and innovation 98 56 -42
Present an open and honest face to 98 62 -36
their people
Show genuine appreciation of 98 76 -22
contribution and efforts

• The smallest experience gap shown in the table above – that related to showing
appreciation (-22) is still concerning however, as it indicates a sizeable minority of
followers feel that their efforts are mostly unrecognised.

• It is not surprising to discover that around three quarters of followers want leaders to
create and demonstrate vision, trust and respect, as these are common and recurrent
themes across the literature and other research studies.

Table 2: Results from e-survey with followers - leadership behaviours desired v experienced
(see Section 2)

Base: 568 Want Saw Demonstrated Gap

Leaders in in
general to Own organisation
have %
%
Genuine shared vision 79 38 -41
Real confidence and trust in their 77 37 -40
teams
Respect for employees, colleagues 73 42 -31
and customers
Commitment to helping people in 66 43 -23
organisation develop and grow

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Clear standards of ethics and integrity 59 49 -10
Willingness to take acceptable risks 44 38 -5
Customer-focussed strategy that 42 47 +5
drives performance
Skill in forming alliances and 30 42 +12
partnerships
Dogged determination to deliver 24 46 +22
objectives

There remains a key concern however in the finding that there is such a sizeable “experience
gap” whereby around 60 per cent of followers do not currently see vision, trust and respect
being demonstrated in their own organisations.

What practical examples are there to help leaders inspire exceptional performance?

The quantitative e-survey asked respondents to describe how they had been motivated and
inspired by exceptional leaders in the past. Some key themes and patterns emerged which
were then explored further at the telephone interview stage.

The 100 followers were asked to describe in their own words how leaders in their
organisation…

• Listen and keep in touch (talk)

• Show trust in their people (trust)
• Show thanks and appreciation (thank)

1. How leaders listen and keep in touch

Base: 88 respondents %
Team/staff meetings/briefings 57
Come and talk/chat to staff/one to one sessions 40
Feedback from meetings/feedback sessions 39
Written information/newsletters 33
Open door policy 19
Appraisal /review system 10

It is interesting that only 19 per cent of respondents experience an open door

policy in the organisation. More formal processes and procedures seem to
apply in more than half of respondent organisations.

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Listed below are some of the more positive examples that managers have
experienced:

• Toolbox talks – listen to those on the shopfloor

• Listening lunches – where the Chief Executive has a monthly lunch with staff at all levels
• Management by walking about, just asking questions and listening
• Fortnightly department meetings
• Monthly one-to-one with line manager
• Quarterly have-your-say questionnaire
• 3-monthly employee meeting bringing people together from 7 different locations
• Newsletters every month
• Open chat room via email
• Moderated chat room on website where anyone can post a question
• Daily news release on the intranet to keep us informed of what’s going on

How not to do it….

• They didn’t do much listening but transmitted a lot of information down a management
tree (Manufacturing)

• Recently our Chief Executives attended some meetings with all staff to hear about
problems and issues – 10 months later nothing has changed, its been a waste of time
(Public administration)

• They listen only when they have to, when the issue is forced (Health/social work)

• They communicate via the Intranet rather than verbally and in person/they sit in their little
goldfish bowls typing emails (IT/telecoms)

2. How leaders demonstrate trust in employees

Base: 87 respondents %
Staff left to own devices/degree of autonomy 71
Encouraging staff to come up with ideas/to develop 23
Flexibility/working from home 16
Responsibility for sign-off 8
Representing organisation at external meetings/seminars etc 6

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Although this shows quite promising results in the degree of autonomy that is apparently
enjoyed by these followers, some managers suggested that this was actually due more to a
lack of understanding or interest on their leader’s part:

“In my case I’m given very wide-ranging autonomy. This is motivated primarily by the
leadership’s lack of understanding of my function.”

Practical examples of how leaders can demonstrate their trust are given below:

• Invoice approval and signoff

• Company credit card
• Represent organisation externally at seminars, public speaking, replace boss at strategic
meetings
• Job description defines limits but high degree of autonomy/freedom
• No-blame culture
• Right-first-time culture
• It comes through strongly in promotion, we believe in their potential but people are still
unproven in the scale of the jobs they are going into.
• You have to allow the decision making process as low as possible onto the shopfloor and
trust employees enough to try and take those decisions for themselves.

How not to do it..

• We operate in a culture of mistrust. Frequently officers of the Council are undermined by

elected members who are backed up by senior managers (Public administration)
• They don’t tend to divulge, so they keep everybody at arms length (Manufacturing)
• We invented trust. We trust all our employees depending on their security clearance
(Defence/emergency services)

3. How leaders show thanks and appreciation

Base: 89 respondents %
Personal thank you to individuals 61
Public acknowledgement e.g. notice board, intranet, newsletter, meeting 49
Team event/outings 44
Financial reward e.g. cash gift, bonus 40
Non-financial reward e.g. chocolates, flowers, wine 17
Additional holiday/time off in lieu 7

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 Promotion 6
Events/outings to include families of staff 3
Long service awards 3

Followers seem to appreciate the personal rather than the process-driven approach.

Much of the importance attached to a gesture of appreciation is attached to the

timeliness/direct relationship to the event. Thanks and appreciation should apply to situations
where praise is warranted, but not given every single time a person does something right.

Other comments/examples included:

• Rewards such as salary have a short-term beneficial effect. Constant verbal appreciation
and an appreciative attitude from your manager build a culture of appreciation, which has
a longer-term effect.
• Internal departmental or employee awards for excellence
• Scratch card for achieving targets in finance department
• All expenses trip to Barcelona for achieving sales targets
• Store Manager of the Year is given a car
• When a project was completed successfully we would arrange for the whole team from
bottom upwards to the project manager to go for a pint.

How not to do it.

• They tend to take us out for a Christmas lunch and assume that’s all it needs (Public
administration)
• My line manager shows appreciation with sweets or choc ices but management higher
than that don’t get involved in that kind of activity (Public administration)

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3. QUANTITATIVE E-SURVEY

BACKGROUND

• The Chartered Management Institute, in partnership with the DTI, designed and carried
out a survey by e-mail of followers at different management levels during October 2003,
to which 568 individuals responded.

• It was designed to meet the following key objectives:

- To validate the preliminary findings from the qualitative interviews with inspirational
leaders carried out earlier in 2003

- To explore with followers the qualities that leaders need to inspire them to deliver
improved performance/extraordinary results

- To provide a robust data series that will enable the development of a draft Index for
development with a wider partner group.

• The survey was emailed to 5,000 followers including members of the Chartered
Management Institute and CBI contacts, during October 2003. The response rate of 11
per cent is above average for business-to-business email surveys.

• The e-survey was complemented by 100 semi-structured telephone interviews designed to

probe respondents’ understanding and experience of inspirational behaviour and
attributes. This was sub-contracted to an independent external market research agency
NOP and interviews were completed by mid-December 2003.

THE SAMPLE

• The managerial level of the 568 respondents is as follows:

Management level %
Chief Executive 8
Director 16
Senior manager 36
Middle manager 29
Junior manager 11

Over three-quarters of individuals (76 per cent) are below Board level and were thus able
to provide a comprehensive upward perspective on the leadership styles in their
organisations.

Age %
Under 25 8
25-29 21
30-34 22
35-44 17

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 45-54 19
Over 55 13

Respondents were almost equally divided between the under-35 and over-35 age groups.

Gender %
Male 80
Female 20

This division is broadly representative of the UK management population.

Region %
London 15
South East 15
North West 13
South West 8
Yorks/Humberside 8
West Midlands 7
Scotland 7
East Midlands 7
East Anglia 5
Wales 4
N.Ireland 2

Three in ten respondents work in London and the South East, reflecting both its economic
dominance and the membership pattern of the Institute.

Sector %
Public administration 16
Manufacturing 14
Business services 11
Education 10
Construction/engineering 9
IT/telecoms 7
Health/social work 6
Financial services 5
Defence/emergency services 4
Charity/not for profit 3
Transport/distribution 3
Leisure/hotels 2
Retail/wholesale 1
Other 9

The sectoral breakdown broadly reflects the national picture, albeit with an under-
representation in the leisure and retail industry.

Number of employees %
0-19 14
20-49 12

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 50-99 16
100-249 18
250-499 12
500-999 8
1000-4999 12
Over 5000 8

All sizes of employer are represented including SMEs and micro-businesses, which
permits useful comparisons.

Turnover %
Below £1m 13
£1m-£5m 12
£6m-£10m 14
£11m-£50m 22
£51m-£100m 10
Over £100m 29

There is also a reasonable representation of the different financial turnover

bands.

1. LEADERSHIP CULTURES

Respondents were asked how far they agreed (on a four-point scale) with a series of 12
statements describing various organisational scenarios.

Table 1 Agreement with various statements about leadership culture

Base: 568 Strongly Agree Disagree Strongly Total Total

agree Disagree Agree Disagree
% % % % % %
I believe leaders 5 31 46 16 36 62
in my
organisation are
genuinely in
touch with how
people are feeling
We work hard but 12 33 42 12 45 54
senior
management also
makes sure we
have fun
There is a good 10 38 40 10 48 50
buzz and feeling
of energy in my
organisation

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I get annoyed 11 41 42 4 52 46
when I hear
negative
comments about
the top team
Everyone in this 12 44 38 5 56 43
organisation is
looking to do
things better
One of the good 13 44 33 9 57 42
things about this
organisation is the
way we are
helped to develop
personally
My boss ensures 11 47 32 7 58 39
objectives are
stretching but not
to the point of
overload
I am normally 22 48 23 4 70 27
thanked by my
boss when I have
done a good job
Leaders in my 26 48 20 5 74 25
organisation are
approachable/
have real open
door policy
I am confident my 38 44 13 4 82 17
boss listens to my
views
I am actively 56 34 8 1 90 9
encouraged to
come up with
ideas/be creative
My boss trusts me 61 33 5 0 94 5
to make my own
day-to-day
decisions

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KEY FINDINGS

• It is worrying to note that only just over a third of respondents - 36 per cent - agreed that
their leaders are genuinely in touch with how people are feeling. Furthermore less than
half of respondents (48 per cent) agree that there is a good buzz in the organisation, and
that they have fun even while working hard (45 per cent).

• These are unwelcome results, especially since the pressures of change in an era of higher
employee expectations demand that leaders find new ways of generating shared
commitment. Improving the quality of leaders’ relationships with the rest of the
organisation will make an important contribution to exceptional performance.

Corporate versus individual perspectives

Table 1 shows some differences in the responses between statements worded in the first
person describing specific individual behaviours/outcomes e.g. I am confident my boss
listens to my views, and those relating to organisational behaviour over which there was no
perceived personal control e.g. We work hard, but senior management makes sure we also
have fun.”

Respondents seemed more likely to report negatively on the latter, more “abstract” aspects of
organisational culture, and to apportion blame at more senior levels.

In contrast a more positive picture was painted when answering those statements in the first
person, especially concerning levels of autonomy or decision-making.

These two issues are particularly linked with managers’ image of themselves in the
workplace, and so an element of overclaiming/ providing a socially acceptable response is not
unexpected in research design terms.

Differences by management level

In looking more closely at the three statements in Table 1 with the lowest agreement scores,
further analysis by level reveals something of a division at the Boardroom door as shown in
Tables 2a-2c.

Table 2a Agreement with statement: I believe leaders in my organisation are

genuinely in touch with how people are feeling

Base: 568 All Director Senior Middle Junior

% % % % %
Strongly agree 5 12 4 2 2
Agree 31 36 36 19 22
Disagree 46 41 47 54 49
Strongly disagree 16 8 13 23 27

Middle and junior managers are particularly dissatisfied with the remoteness of the top team,
in that around three-quarters disagreed with the statement that leaders are genuinely in touch.
Typical comments in terms of their leaders’ performance included:

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“Need to ensure that communication is more efficient and take time to talk to people in the
organisation and at the chalk face.”

“Make top management more visible to rest of the workforce. Too much of ivory towers!”

“Get out there and walk about more.”

Table 2b also shows that directors and senior managers have a different perspective on how
things really are within an organisation.

Table 2b Agreement with statement: We work hard but senior management makes
sure we also have fun

Base: 568 All Director Senior Middle Junior

% % % % %
Strongly agree 12 26 6 7 10
Agree 33 35 32 30 29
Disagree 42 25 54 46 37
Strongly disagree 12 9 8 17 24

Only 39 per cent of junior managers agree that they have fun at work compared with 45 per
cent overall, and 62 per cent of directors. This suggests a real divide between organisation
leaders and those lower in the hierarchy, although followers were willing to offer some
practical solutions:

“ Monthly team lunches at the local Indian restaurant.”

“ Made sure we all celebrated when we had a good win.”

“ Always around when anyone had to work out of normal hours even if just to make the tea.”

“By celebrating achievements.”

“My boss was colourful, controversial and arrogant. Right or wrong he challenged peoples’
ways of doing things.”

Table 2c suggests that energy levels in UK companies could be increased, which would
possibly have an impact on fun levels as well.

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Table 2c Agreement with statement: There is a good buzz and feeling of
energy in my organisation

Base: 568 All Director Senior Middle Junior

% % % % %
Strongly agree 10 25 9 3 3
Agree 38 41 44 29 32
Disagree 40 28 41 54 39
Strongly disagree 10 4 6 14 24

Almost two-thirds (63 per cent) of junior managers report that their leaders are not creating
buzz and energy in the organisation, compared with 47 per cent of senior managers. This is a
significant difference.

There was also a size effect in that employees working in organisations with under 20 people
were considerably more likely to agree that there was a good buzz and feeling of energy
present (71 per cent versus 48 per cent overall). It is likely that the flexibility and relative
intimacy of small organisations creates the right conditions to produce the buzz that managers
are looking for.

2. LEADERSHIP ATTRIBUTES AND BEHAVIOURS

The survey was designed to indicate the size of the “experience gap” between desired
leadership behaviours and the reality as demonstrated within respondents’ organisations.

Table 3 Desired leadership attributes

Base: 568 Leaders in general Demonstrated in Gap

Own organisation
% %

Genuine shared vision 79 38 -41

Real confidence and trust in 77 37 -40
their teams
Respect for employees, 73 42 -31
colleagues and customers
Commitment to helping people 66 43 -23
in organisation develop and
grow
Clear standards of ethics and 59 49 -10
integrity
Willingness to take acceptable 44 38 -5
risks
Customer-focussed strategy that 42 47 +5
drives performance
Skill in forming alliances and 30 42 +12
partnerships

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Dogged determination to deliver 24 46 +22
objectives

KEY FINDINGS

• The three most frequently identified leadership attributes are vision (79 per cent), trust
(77 per cent) and respect (73 per cent), yet less than four in ten followers see these
behaviours demonstrated within their own company. It was those at middle and junior
management level who were less likely to report a shared vision and to feel they were
trusted.

• Clearly leaders in the majority of UK organisations continue to struggle with the twin
challenges of developing and communicating a shared vision, and with relaxing control
to allow their teams to deliver. Instead they are much more likely to report success at a
practical operational level i.e. focus on customers, partnership working and from solidly
and steadily pursuing organisational objectives.

• This is not to devalue the contribution made to results and performance by these
strategies, but there is clearly work still to be done at a more fundamental level in order to
capture hearts and minds. The survey reinforces the need for values-based leadership,
with an increased focus on people rather than systems and processes.

Previous Institute research among followers (Leadership: the challenge for all, 2001 and
Leading change in the public sector: making the difference, 2003) has identified the critical
importance of visionary leadership, and respondents to this survey proved no exception as
the following comments illustrate:

“ He has a focus on the long term – he thinks in decades, not in budget cycles.”

“ Guides but does not dictate the company direction.”

“ Quiet air of confidence, I felt he knew where we were going and was determined to get
there.”

“ He was open from day one as to what he wanted to achieve.”

“ Compelling stories about future possibilities.”

The single highest attribute that followers see demonstrated in their own
organisations (reported by 49 per cent) are Clear standards of ethics and integrity.

It is not entirely clear however whether this involves new approaches post-Enron, or existing
organisational processes and procedures. Nevertheless this attribute recorded the smallest
“gap” between what leaders in general should do and what is being done by leaders in
organisations.

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3. MEASURING RESULTS

The overwhelming majority of organisations measure success in financial terms (80 per cent)
and while this is not surprising, it is chastening to note how little notice is taken either of
employee satisfaction levels (13 per cent) or innovation and creativity (10 per cent).

Table 4 Performance indicators in UK organisations

Top three measures used %

Financial performance 80
Productivity and efficiency 45
Corporate reputation and image 40
Quality standards 40
Market share and growth 37
Customer loyalty 19
Employee satisfaction levels 13
Innovation and creativity 10

• Public administration employers were however more likely to include employee

satisfaction levels (22 per cent against 13 per cent overall) as one of their performance
measures.

4. OTHER ISSUES

This section is based on the replies to three open-ended questions as outlined

below.

4.1 Thinking about the leader who has motivated you most in your working life, please
describe how they did this.

Two-thirds of followers report having been motivated in their working lives by an

exceptional leader, while just under one-third (31 per cent) admit that they never have been.
This is an indictment on the quality of leadership experienced in UK organisations and
confirms that there is room for improvement.

Outside of the work situation, respondents were most likely to have been motivated in a
sporting context (34 per cent) or as part of the education process e.g. primary school teacher
(25 per cent) or at university/college (25 per cent).

An initial analysis of the replies revealed that in the work situation that the key ways to
motivate people were:

- Giving them space and responsibility

- Recognition and appreciation
- Believing in their abilities

22
Several managers explained how they had been motivated in terms of space and
responsibility:

“Let me move forward at own pace and in own direction, but positive advice given when
asked for.”

“Allowed to take responsibility for both positives and negatives.”

“Allowed me to make the decisions and said he would trust me no matter what the result.”

Comments about being appreciated included:

“Recognised my dedication and hard work.”

“Always appreciative of subordinates and peers’ contributions and efforts.”

“By giving me the credit for the things I did well to others in the organisation.”

Finally managers described how they were motivated by a leader’s belief in them:

“I was allowed to develop naturally and to make mistakes.”

“Freedom to do things my way, with the knowledge that I was supported.”

“In public he fully supported every member of his team and only dealt with disagreements in
private.”

4.2 What keeps leaders awake at night?

• Somewhat cynically perhaps, around one in ten respondents to this open-ended question
felt that their leaders did not lose any sleep over organisational problems.

“I am convinced the leader of my organisation stops thinking about work the moment he
leaves the office at 5pm.”

Others believed that the ability to switch off is an important leadership ability:

“ I believe our leaders are well enough balanced NOT to lie awake at night.”

Performance targets and competitive pressures were the most commonly reported worries as
illustrated by these typical comments:

“ Fear of failure to deliver performance, reliability, quality and safety.”

23
“ How can we maintain a successful organisation to keep the City happy and fend off a
potential takeover?”
“Trying to decide what to do next i.e. how to grow the business.”

“ Maintaining staff motivation and finding what will give us the edge over
our competitors.”

4.3 If you were Chief Executive, what one thing would you change to achieve
exceptional results?

Initial analysis showed that the one thing to be changed to achieve exceptional results in the
opinion of many is the internal communications process. This finding is not unexpected and
serves to underline its crucial importance.

Leaders need to:

- Listen
- Encourage an open forum for ideas
- Promote upward communication

Managers commented on this key aspect of leadership by suggesting what good

communications involves:

“ Tried to give everyone an idea of the bigger picture.”

“ Regular team meetings and one to ones. Everyone knew what was expected of them.”

“ Explained why things were being thought about or changed.”

“ The individual who solved a problem was always given credit publicly.”

“ Honesty even when the news is bad.”

“ The fact that never resorted to management-speak or jargon.”

24
4. QUALITATIVE RESULTS

BACKGROUND

• This report contains an analysis of the results from 100 semi-structured telephone
interviews carried out by an independent external market research agency NOP.

• Fieldwork took place between 17 November and 8 December 2003, among individuals
who had responded to the earlier e-survey carried out in October 2003, and had agreed to
take part in the subsequent follow-up.

• The questionnaire was designed to probe followers’ views and experiences of inspired
leadership, including tangible examples of being thanked, trusted and listened to.
Interviews contained a mixture of closed (precoded) and open-ended questions.

KEY FINDINGS

• Half of respondents reported that their organisation had an explicit budget for leadership
development and training, while five per cent did not know. Although based on very
small sub-samples, explicit budgets were more likely in the public administration and
health/social sectors.

• Fifty per cent of followers were aware of specific leader networks in the UK, of which the
Chartered Management Institute was the most frequently mentioned (55 per cent). This is
not entirely surprising in view of the composition of the sample. The Institute of Directors
was mentioned by 20 per cent and the CIPD by six per cent.

• Less than half of managers (44 per cent) described the prevailing organisational climate
as participative i.e. a shared approach, with high levels of employee involvement in
decision-making.

• Bureaucratic structures (31 per cent) and authoritarian command and control styles (25
per cent) are together still perceived as prevalent in over half of UK organisations.

• This finding is no doubt closely linked with the finding that followers do not, on the
whole, see their leaders creating a feeling of energy, fun and excitement in the
organisation – 93 per cent identified this as a key leadership attribute, yet only 32 per cent
are actually experiencing this closer to home.

• Neither do their leaders demonstrate the attribute of being good communicators and who
listen to others more than they talk themselves –

25
• 96 per cent of followers identified this as a key attribute, while only 43 per cent report
that this is being demonstrated in their organisation.

• Less than half of managers (48 per cent) agreed that most people in their organisation
would be able to describe its vision if required. In contrast 59 per cent of those working
in participative cultures agreed that most people could do so, compared with only 32 per
cent of those in bureaucratic organisations.

• The three main employee satisfaction measures used are resignations/staff turnover (69
per cent), sickness rates (63 per cent) and absence rates (62 per cent). Only nine per cent
of organisations do not measure satisfaction levels.

THE SAMPLE

• The sectoral breakdown of the 100 respondents is as follows:

Sector %
Public administration 22
Business services 16
Manufacturing 15
Education 11
Construction/engineering 11
Health/social work 5
Financial services 4
Defence/emergency services 4
IT/telecoms 4
Transport/distribution 3
Charity/voluntary 3
Leisure/hotels/restaurants 2

As in the first e-survey, the sectoral breakdown broadly reflects the national picture.

Gender %
Male 86
Female 14

This picture is broadly representative of the UK management population.

Employment status %
Work full-time 91
Work part-time 1
Work on interim basis 1
Work on fixed-term contract 1
Self-employed 6

The majority of respondents are employed on full-time permanent contracts.

26
 Length of employment %
0-2 years 25
3-5 25
6-10 15
More than 10 years 35

Over a third of respondents have worked for their current employer for over 10 years.

Less than half of followers (44 per cent) report that they work in organisations with a
shared approach to decision making and where they are encouraged to participate. The
majority (56 per cent) describe a more rigid and authoritarian approach.

Organisational culture %
Bureaucratic e.g. rigid, process driven 31
Command and control e.g. authoritarian 25
Participative e.g. high employee 44
involvement in decision-making

Bureaucratic cultures are much more prevalent within the public administration sector,
while employees working in business services were more likely to describe the culture as
participative.

Manufacturing concerns tend to adopt more of a command and control approach, perhaps
reflecting the need to meet defined production and quality schedules.

Base: 100 All Bureaucratic Command & Participative

respondents control
% % %
Business services 23 19 16 30
Public 22 42 12 14
administration
Manufacturing 15 10 28 11
Construction/ 11 10 12 11
engineering
Education 11 10 8 14
Health/social work 5 3 4 7
Charity/ 3 - 4 5
Voluntary

LEADERSHIP ATTRIBUTES AND BEHAVIOURS

The telephone interviews sought to identify further the size of the “experience gap” between
desired leadership behaviours and the reality as demonstrated within respondents’
organisations.

27
Table 5 Desired leadership attributes

Base: 100 Leaders in general Demonstrated in own Gap

organisation
% %
Create a feeling of 93 32 -61
energy, fun and
excitement in the
organisation
Good communicators 96 43 -56
and listen more than
they talk
Encourage creativity 98 56 -42
and innovation
Present an open and 98 62 -36
honest face to their
people
Show genuine 98 76 -22
appreciation of
contribution and efforts

• It is concerning to see followers confirming the pattern highlighted in the quantitative

survey in terms of lack of organisational energy and buzz (only 32 per cent of managers
experienced this).

• This lack of energy is probably compounded by poor communications – indeed only 43

per cent of managers could agree that their leaders were good communicators who listen
more than they talk. As one respondent commented:

“They didn’t do much listening, but they transmitted a lot of information.”

• Unsurprisingly perhaps, participative cultures encourage these behaviours – 89 per cent of

respondents from that type of environment agreed that leaders genuinely appreciated
peoples’ hard work, compared with 56 per cent of those working in a command and
control environment.

28
 EXAMPLES OF LEADERSHIP BEHAVIOURS

Respondents were asked to describe in their own words specific and tangible examples of
how leaders in their organisation show their thanks and appreciation
• Listen and keep in touch
• Show trust in their people

An analysis of the common themes is given below, and a full listing of the managers’
verbatim responses is also available.

Table 6 How leaders show thanks and appreciation

Base: 89 respondents %
Personal thank you to individuals 61
Public acknowledgement e.g. notice board, 49
intranet, newsletter, meeting
Team event/outings 44
Financial reward e.g. cash gift, bonus 40
Non-financial reward e.g. chocolates, flowers, 17
wine
Additional holiday/time off in lieu 7
Promotion 6
Events/outings to include families of staff 3
Long service awards 3
Company car 2

Followers seem to appreciate the personal rather than the process-driven approach.

Much of the importance attached to a gesture of appreciation is attached to the

timeliness/direct relationship to the event. Often line managers provided a
contribution of effort on a “personal” basis as it was too hard to fit within the
bureaucratic process:

“ He will out of his own pocket do some of the things you have mentioned.”

“Our line manager shows appreciation in with sweets or choc-ices: management higher than
that don't get involved in that kind of activity”.

Table 7 How leaders listen and keep in touch

Base: 88 respondents %
Team/staff meetings/briefings 57
Come and talk/chat to staff/one to one sessions 40

29
Feedback from meetings/feedback sessions 39
Written information/newsletters 33
Open door policy 19
Appraisal /review system 10
Investors in People 3

It is interesting that only 19 per cent of respondents experience an open door policy in the
organisation. More formal processes and procedures seem to apply in more than half of
respondent organisations.

Table 8 How leaders demonstrate trust in employees

Base: 87 respondents %
Staff left to own devices/degree of autonomy 71
Encouraging staff to come up with ideas/to 23
develop
Flexibility/working from home 16
Responsibility for sign-off 8
Representing organisation at external 6
meetings/seminars etc

Although Table 8 shows quite promising results in the degree of autonomy that is apparently
enjoyed by these followers, some managers suggested that this was actually due more to a
lack of understanding or interest on their leader’s part:

“In my case I’m given very wide-ranging autonomy. This is motivated primarily by the
leadership’s lack of understanding of my function.”

The results do show something of a paradox however. Despite the high levels of autonomy
reported by these managers, it is notable that only one in six were apparently trusted enough
to work away from the traditional office setup i.e. at home, out of sight of the boss. This is
surprising in view of the technological advances that enable remote working, but which have
not been accompanied by corresponding advances in attitude and behaviours.

3. MEASUREMENT AND BENCHMARKING

While the quantitative survey showed that only 13 per cent of organisations
took employee satisfaction into account when measuring performance, it
was nevertheless felt important to explore this issue further among followers in the
qualitative survey.
Results are shown below. Although many employers (58 per cent) undertake

30
employee surveys which can give an ongoing indication of overall satisfaction levels, it is
noticeable that many (69 per cent) seem to take notice only when remedial measures would
be too late i.e. when staff have already resigned.

Table 9a Measures of employee satisfaction used in UK organisations

Base: 100 respondents %

Resignations/staff turnover 69
Sickness rates 63
Absence levels 62
Attitude surveys 58
Productivity/output 43
Focus groups 38
360-degree feedback 37
Industrial action/strike/go-slow 17
None of these 9

Employee attitude surveys, with feedback of the results used to trigger action at all levels of
the organisation, can increase levels of employee involvement. Well-designed suggestion
schemes can have similar benefits. However both depend critically on employees seeing a
positive response to their views and ideas: in the absence of a positive and well-
communicated response, the outcome is merely increased cynicism.

Nine per cent of respondents report that their employer does not measure employee
satisfaction - this rose to 16 per cent in those organisations that were described as having a
command and control culture.

Table 9b Comparisons of organisational performance

Base:100 Bureaucratic Command & Participative

control
% % %
Resignations/staff 61 64 77
turnover
Sickness rates 48 72 68
Absence levels 52 60 70
Attitude surveys 61 56 57
Productivity/output 29 44 52
Focus groups 26 36 48
360 degree feedback 39 12 50
Industrial action 23 8 18
Informal contact 10 4 25
Appraisals/regular 10 8 14
meetings
None of these 10 16 5

Managers were then asked about their organisation’s performance over the past year
compared with others in their sector, rated on a five-point scale.

31
Table 10 Organisational performance compared with others in sector

Base:100 respondents Very Much About the Much Very much

much worse same better better
worse
% % % % %
Quality of 4 7 28 48 13
products/services/
programmes
Customer/client 6 8 30 40 16
satisfaction
Ability to attract high- 7 14 37 25 17
calibre employees
Financial performance 11 14 23 31 21
New product 7 21 30 40 16
development

While these responses may be partly based on perceptions rather than actual data,
respondents are most positive about corporate performance in terms of product and service
quality. They also consider that their customer/client satisfaction levels are higher than those
of the competition.

Quantitative findings revealed that 80 per cent of organisations measure success in financial
terms. Further analysis of the second stage results indicates that organisational culture has
an influence on financial performance/turnover.

Table 11 Influence of organisational culture on financial performance/

turnover

Base: 100 Bureaucratic Command & Participative

% control %
%
Very much better 13 20 27
Better 35 20 34
Neither 26 28 18
Worse 19 8 14
Very much worse 6 24 7

Employees working in a participative environment were much more likely than those
working in a command and control culture to describe their organisation’s financial
performance as better than others in their sector (61 per cent against 40 per cent).

Leaders who wish their organisation to be an employer of choice need to be aware of the
contribution of culture to an organisation’s success at attracting high-calibre employees.
Table 12 shows that only 25 per cent of bureaucratic

32
organisations seem to be effective at recruiting high-calibre individuals, compared with 61
per cent of participative companies.

Table 12 Influence of organisational culture on ability to attract

high calibre employees

Base: 100 Bureaucratic Command & Participative

% control %
%
Very much better 6 12 27
Better 19 16 34
Neither 55 32 27
Worse 13 28 7
Very much worse 6 12 5

33
5. What Happens Next?

The project outline is shown in Appendix 1. The next stage of this work will be to validate
the work completed to date with HR Directors and others and to look at the factors applying
in leadership selection by headhunters and other selection agencies and a sample of non-
executive directors. The collective research findings will then be used to develop the
inspirational leadership index

Further Information
If you are interested in becoming involved in this project (for example in helping to develop
an Inspired Leadership Index) or simply wish to know more about it, please contact:

John Baker, Management, Leadership and Skills Unit, Department of Trade and
Industry, Bay 349, 151 Buckingham Palace Road, London SW1W, 9SS.

34
Appendix 1 Outline Project Plan

Inspired Leadership Program m e

CEM L research CM I Leaders and Stakeholder M LSU /W EU

by CM I and Follow ers Review and Head-hunters
Dem os Research, presentations research
analysis from
the 2004 100
Background Best Com panies
Research: to W ork For data
• W inning Inspired
• Partnerships Leaders
w ith people Index
• Living (draft)
Innovation
• 100 Best
Com panies Interim findings
published
Fer r ar a In sp ir ed
Lead er s -A BBP b r o ch u r e
Co n fer en ce
Lead er sh ip & N etw o r k – - fir st r esear ch
In n o v atio n p r o files an d r ep o r t
N etw o r k sy n th esis

2000 2002 2003 M ay 2004 Dec 2004

35
 Inspired Leadership Program m e

Inspired Launch
Leaders Index
Stakeholder Inspired
City & Venture (second draft)
Review and Leaders
Capitalist presentations
Research Index

Inspired
Leaders
Index
(first draft)

Analysis from the Research on

Leadership and M apping
2005 100 Best Leadership
Com panies to M anagem ent
Developm ent N etw orks
W ork For data
Tools

Dec 2004 M arch 2005 June 2005

36
APPENDIX 2: MAPPING THE THREE PERSPECTIVES ON INSPIRATIONAL LEADERSHIP
DTI “BUSINESS LEARNING
FROM BUSINESS”
Inspirational leaders ensure work is
fun
Inspirational leaders listen a lot
Inspirational leaders genuinely care
about their people
VIEW FROM THE TOP
Leaders who have achieved
extraordinary results characterise
themselves as:
“Passionate and enthusiastic”
“I want this place to be a place where
people are thrilled to come to work –
a wow company. People come to
work with a smile and love that real
sense of being there.”
“Powerful listeners”
“Hungry for learning”
“Giving a priority to building and
developing teams of inspired leaders”
“Biggest concern is letting my people
down”
37
VIEW FROM THE FOLLOWERS
Followers were looking for the
following attributes in their leaders:
Creates a feeling of energy, fun and
excitement in an organisation
Good communicators who listen to
others more than they talk
themselves
Commitment to helping people
develop and grow
GAPS
The reality check from the
followers perspective difference
between desired quality and
leadership experienced in their
organisation:
-61% gap
-56% gap
51 per cent do not have budgets for
leadership development and training
DTI “BUSINESS LEARNING VIEW FROM THE TOP VIEW FROM THE FOLLOWERS GAPS
FROM BUSINESS”
Leaders who have achieved Followers were looking for the The reality check from the
extraordinary results characterise following attributes in their leaders: followers perspective difference
themselves as: between desire quality and
leadership experienced in their
organisation:

Inspirational leaders and their people “Need for a clear vision, it is about A genuine shared vision of where the -41% gap
are deeply committed creating what is not” organisation is going

“Passionate about a cause”

“Desire to improve the quality of life

not just profitability”
Inspirational leaders involve “Belief in making it work for Present an open, honest and human -36% gap
everybody everybody as an experience” face to their people

“Dogged determination to take

people with them”

Inspirational leaders show lots of No direct references from leaders Show genuine appreciate of -22% gap
appreciation individual / team contribution and
efforts

38
39