By Marko Gregurek – Client Manager at Accord Group Austria

Leadership development ranks consistently among the major concerns companies have. This article takes a look at 5 characteristics of companies that nurture a leadership-friendly culture - to blossom, leaders need fertile ground.

Learnings from Our Practice - Case 1: True Leadership Culture Grows From the Top

Our client was willing, ready and able to grow the business by establishing a new subsidiary. The bottom line was strong, as was the business case, and they had a clear idea of the type of manager they needed to lead this new endeavor. We were equipped with the best tool a recruitment company can have when waging battle in the war for talent: a plausible and appealing story.

Working with clients who show such a degree of ambition and drive to get the leaders of the future to join their ranks is invigorating and makes the recruiting professional gladly go the extra mile. In this case, our heightened enthusiasm got the better of us and we decided to ignore the first signals…

Still, the little voice grew louder and stronger until we were forced to admit to ourselves that our client company was not all it promised to be. Despite the fiery storytelling and the apparent willingness to provide room for true leaders, they were simply not ready. They came to realize they cannot buy a leadership culture – it had to be developed and implemented from the top down.

The word leadership gets tossed around a lot nowadays. Apparently, it is something that is constantly lacking everywhere. They say that lack of leadership can be healed by trainings, succession planning, coaching, and a host of other tools and diagnostics. And that is true - in the second step. All the investments made towards developing leadership skills in middle management will only lead to an inevitable amassment of costs, frustration of the workforce and loss of job engagement unless a culture that allows for leadership is in place. Now this starts at the very top and realizing this – is the first step.

So what are some of the characteristics of company culture wherein leaders can blossom? Let’s look at a few examples.

Case 2: Seeing Employees as Internal Entrepreneurs

Another client of ours positions itself as a large, but not too-large industrial producer, that uses its flat hierarchy to stimulate an entrepreneurial mindset and inevitably add speed to their decision-making. And they really do. The kind of market they are in demands an ability to quickly recognize and act upon market opportunities. The employees are treated as entrepreneurs and business owners. This company has been successful in recruiting the exact cadre of people they want and need. Oftentimes they do not even need to offer salary increases to people they want. The candidates come because they want to make a change and get away from stale, conservative, leadership-unfriendly environments.

Key Learning: Allow for Project Ownership to Promote Efficiency and Efficacy

Inextricably connected with a culture of entrepreneurship is enabling assumption of responsibility and project/idea ownership. What happens when no one takes responsibility? Money is spent inefficiently and success evaporates.

Case 3: When Lack of Decision-Making Disrupts Internal Processes

A larger company we served rode on a wave of favorable market trends and technological developments to high profit margins and a strong position in international markets. While successful, this was in reality a risk-averse and conservative company.

The search assignment was to find a department head for an important back office function. The story was strong, the candidates were plentiful, and the top candidates provided an excellent fit to the job. But no one was hired. As it turned out, the senior VP allowed the VP to search externally for this crucial position, although the SVP knew exactly whom he himself would like to give the job to.

Nevertheless, in a meritocracy the best person gets the job, so the SVP chose not to take responsibility for this important placement and allowed for an external recruiter to find the right person. He was sure we would fail, but we only failed at proving his thesis. This resulted in months of wasted time, wasted efforts on all sides, and a burgeoning war-footing between the SVP and the VP. In the end, the SVP’s preferred choice ended up getting the job, thus nullifying all the investments made toward the personnel search.

Key Learning: Scheming Does not Equal Leading

The placed candidate was not even the best candidate out of the batch. But, after the whole thing escalated, the SVP simply had more clout than the VP. Now, a few years down the line, and still without a leadership culture, the company is not doing so well.

Most companies have a vision, and all companies should work on developing something similar to a vision if they want to stay around for a while. Companies we have worked for who display fewer crises of leadership allow their employees to have individualized visions too. Some of the best candidates we have placed with our clients had a very clear idea of how their careers should develop and what they wish to develop into.

For example, a candidate might take a certain position because it requires heavy travel and he or she wants to see the world before settling down in a specific country on the itinerary. There are employees who wish to make obscene amounts of profit for the company with the goal of eventually taking part in those profits. And some wish to be simply the best in their fields, whether it be accounting, PR, or production planning. To be fair, the last example is only a vague vision, and rule of thumb says that the more specific the vision, the easier it is establish a retention plan. In the end, an employee with a personal vision has it easier when she or he needs to lead others.

Key Learning: Allow Your Employees to Be Individuals

Implied between the lines written thus far is the need for flexibility on the side of the companies. The larger the company, the more difficult it is to stray from established structures, rules and procedures. However, we worked with a Division GM of a large multinational industrial player with more than 25,000 employees who was successful and highly valued by the company. He was also directly involved in a number of recruitment processes at all levels, as he recognized the value of having the right people in key positions.

When he would see a candidate he was convinced of, he would issue a direct order to hire the person. If the candidate’s salary was beyond the company’s preferred range, he would make a case for extending the range. If the candidate could make a case for working in one location, rather than the one the company envisioned, this GM took it upon himself to enable this flexibility. The bigger the company, the more difficult it is to be flexible. But large companies require ingenuity and flexibility from their top managers anyway, so there usually is a way.

Key Learning: Employers Should Be Flexible To Attract High-Caliber Employees

I would like to use the example of this GM from the previous company to talk about personality. Much like we were blinded by the charisma of the company mentioned at the beginning of this article, so companies tend to pursue the obvious, archetypal choices when selecting their leaders. This happens more often than anyone imagines. Tall, eloquent, extroverted, charismatic – these qualities are likely somehow related to our collective idea of a leader.

But companies that allow for leadership, allow for it to come from unexpected directions. The aforementioned GM was not an extrovert, and his charisma left something to be desired. His eloquence stemmed from his intelligence, but he was not the kind of person who would convince by constructing a few winning phrases and pull people in by the power of his presence. Although, now that I think of it, he was quite tall… Nevertheless, it sometimes took time to understand his strength as a leader, and the company he worked for made room for his leadership style and personality.

Key Learning: Real Leader Comes in All Shapes and Sizes

Identification of future leaders is not easy, but if the cultural elements we discussed exist, chances are, they will emerge at one point or another. By default, leadership should be a function of position in a business environment. The onus of enabling and displaying leadership is with the top management. After that, it’s a trickle-down effect that can be enhanced, but not replaced, by trainings, succession planning and coaching.

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*This article has been published on the WU Executive Academy website and newsletter