JULY 26-AUG 1, 2014 FOCUSM 43enterprise

Gathering the reins through 3EsExcellence, ethics and endurance will see you first past the post

LEADERSHIP is some-thing most businesses, regardless of size, struggle daily to get right. Not only is it the foundation of a

company but it also reverberates across all departments and plays a central role in driving growth.

The consequences of failure are far-reaching. For all that, leaders still seem to repeat mistakes, often to the detriment of their ventures.

Where then does the problem lie? The answer, according to Triple Crown Leadership authors Bob and Gregg Vanourek, is simple. It is in the brand of contem-porary company leadership. They suggest a new model, called triple crown leadership.

The name originates in US t h o ro u g h b re d horseracing – the Kentucky Derby, the Preakness Stakes and the Belmont Stakes. Referred to as the Triple Crown, these are held over five weeks, making it close to impossible to win all three in the short period. To date, only 11 thoroughbreds have achieved this feat since 1875.

Bob and Gregg use this as a simile for three leadership goals (the 3Es), which are to build organisations that are excellent (achieve results that pos-itively affect stakeholders); ethical (do the right thing); and enduring (operate sustainably over the years).

In the case of SMEs, Bob says some CEOs are very advanced in leadership practices and are flourishing – but that these are in the small minority of businesses in Malaysia.

“Most SMEs, as in America, are stuck in traditional metrics. They’re always worrying about how they can beat the competition. They aren’t talking about shared values, vision, or how to empower other people to lead. Everything goes to the CEO to make decisions,” he says.

The Malaysian scenarioOne of the issues highlighted by local companies when the two leadership practitioners spoke to their staff was the issue of founder dependence, when the organisation becomes overly reliant on the decisions of one person.

Gregg relates: “This is very common in smaller organisations. The problem is you’re not tapping into the tremen-dous leadership potential around you and it crushes the entrepreneurial pursuit. It’s a trap you have to watch out for.”

This problem frustrates efforts at employee retention; people seek to leave as they do not see a possibility of moving up in and growing with the organisation. To remedy this problem, Gregg’s advice is for the entrepreneur or leader, regardless of position, to be open to feedback.

“You don’t have to carry the whole burden on your shoulders as CEO, especially with the current environ-ment. They [these CEOs] are burning themselves out and they won’t have to do that if they just open leadership opportunities in their team. There’s a wealth of talent there,” comments Bob.

This is related to the culture of a company, and Gregg says SMEs typi-cally prefer not to work on it, which is problematic.

He notes: “Many SMEs say, ‘We don’t want to work on formal things’. They have a culture but it’s implicit and it gets neglected. It’s wise for an SME leader to build a culture proactively. It’s not hard to do. Culture is simply how you do things in your company. Are you burning people out, are you too focused on the bottom line?”

Financials are important but, at the same time, employee satisfaction and giving back to the community should not be sidelined. If an SME is able to do that, it would put company culture on the agenda and would take a positive step that contributes to sustainability and employee retention.

One of the challenges unique to Ma-laysia is that of cultural difference and a resulting discrimination. The fear of speaking up was another point raised. Staff at SMEs or corporate companies believe speaking up would be going against convention and may put them in the firing line.

The duo say while there are no easy answers, it is about seeking com-monalities and interests, and putting aside differences that must slowly be bridged. Constructive feedback or comments are also important.

Other issues are similar to what they have heard in other countries,

including micro-management, con-flicting goals, the financial metric focus and the like.

Internal and external sustainabilityWhen it comes to sustainability, local SMEs have much to learn. In Bob and Gregg’s definition of enduring organi-sations, there is internal and external sustainability.

“Internal is to make sure you’re not burning your people out, you balance their real life with the demands of the job, and care about their health and wellbeing. Engage in financially sustainable activities and practices, rely on a scalable financial model, and ensure you have a succession plan,” Bob says.

On the external side, smaller com-panies often neglect external sustain-ability in terms of a carbon footprint and resource consumption. However, they need to start meeting the needs of the present without sacrificing the needs of the future.

Gregg explains: “Businesses can no longer operate in a bubble and focus only on their financials. They’re part of a connected system and there’s a role to play. It’s about taking a multiple-stakeholder view – you’ve to reward your shareholders but also think of your employees, customers, vendors and the environment, and manage those effects responsibly.”

A focus on sustainability will boost

the bottom line by increasing efficiency in the supply chain, inspire employees and meet the expectations of today’s customers.

Nowadays, engagement and com-mitment on the part of employees are a huge problem. On average, Bob says, only 30% of workers are engaged, 50% are going through the motions and 20% are actively disengaged and working to sabotage the organisation.

By encouraging the 50% of neutral workers to be passionate about and committed to the company, momen-tum and growth will be increased. The newer-generation workforce hungers for purpose and meaning, and SMEs can take advantage of this to attract talent.

“Big organisations are bureaucratic and too huge, and they want more face-to-face authenticity where people know each other in ways that are impossible for large organisations. It’s more attractive to be in an SME because there’s more possibility for change, making a difference and an exposure to so much more,” Bob says.

Putting theory into practiceOrganisations must take a realistic look at resource waste, redundant pro-cesses as well as boosting innovation and creativity.

It can be punishing leading an SME because there is so much on the own-er’s and founder’s shoulders, which may lead to bad decisions. While it’s important to maintain control over your company, Gregg says ego and control will not build businesses that last.

He explains: “Get over yourself. It’s a fear of someone’s being better than you. You need to look back and go back to your original vision. Bring in great people and let them lead, and watch your business blossom because it benefits everybody. What you’ll find is it’s not as bad as you feared, so you need to try to push through it.”

To create leaders in your own organisation, SMEs need to invest in their employees. Coaching them and giving them challenging leadership tasks to accomplish is the best way to develop leaders, addressing the need for a succession plan, Bob says.

“You’ll find they have ideas [you may not have thought of]. You’ll be able to coach them along and slowly, the burden will come off your shoul-ders. You’re giving them little projects to complete,” he adds.

There is a risk in such leadership practices but if an SME creates the culture described by the Vanoureks, it will be beneficial to the company in the long run as it will, for example, result in greater profits and create an environment in which people choose to stay and want to work.

“It’s about working on people, work-ing on the fundamentals. It’s all these five practices that bring it together to reach the 3Es, a powerful [brand of leadership] that can transform an organisation. It’s easy to understand but difficult to deal with in practice,” Gregg concludes.

by Calyn Yap

More on page 44

photos by Jonathan Loi

It is the culture of a company that retains employees, say Bob (left) and Gregg

JULY 26-AUG 1, 2014FOCUSM44 enterprise

THROUGH their combined experience of being leadership practitioners and their interviews with leaders of more than 60 organisations in different countries, Bob and Gregg Vanourek have distilled their findings into five key practices that will enable businesses to achieve the leadership objectives of becoming excellent, ethical and enduring organisations (3Es).

The first, Gregg notes, is head and heart, meaning a candidate’s hard and soft skills. “When recruiting, managing

and developing people, most leaders focus on the ‘head’ side of things – knowledge, skills, experience. What we say is of course that’s important – but you should look at ‘heart’ qualities, too. These are things like character, emotional intelligence, who fits your company culture, has passion and courage,” he explains.

Next is “colours”, a reference to the racing colours won by horse and jockey that set them apart from others, which the two employ to explain the shared values, vision

and mission of an organisation.This needs to be built into the very

fabric of an organisation and has to be derived from people in the organisation instead of coming from top management. This is because the “colours” will become the standards by which a company’s people judge and make decisions.

Gregg adds: “They [companies] do it but they don’t imbue this into the organ-isation’s DNA by communicating it often and placing it at the centre of whatever the

Building strong foundations for sustainabilitycompany does, by building it into performance reviews, for example.”

Leading the right wayLeaders now, especially in smaller businesses where they are also founder and owner, often enforce what they deem right in a top-down approach, which may be detrimental to the company. They have to understand the “steel and velvet” method, in which leaders vary their leadership approach between hard and soft.

“We have a personality we’re born with; it’s nice to be authentic, of course, but sometimes the decision makes it tough. You have to make decisions that are tough and make you unpopular, and you have to be willing to do that.

“At the same time, you need to be ‘velvet’ more often than ‘steel’ – listening to people, creating an environment where people feel comfortable to speak up. You have to understand to develop your organisation,” Gregg explains.

He adds what a leader must do is act in ac-cordance with the company’s “colours” and says in leadership, “steel” qualities include authority, decisiveness and accountability; and “velvet” ones involve collaboration, inspiring people and building relationships.

Enabling sustainable businessesStewards, in horseracing terms, are officials who regulate a race; but in organisations, the next step is to create “stewards” which, Gregg says, is to foster people who develop and protect the company’s colours and culture.

“You need to create an environment where everyone’s empowered to help the organisation become the 3Es, regardless of title and authority. If you do that, it changes the role for everybody and these stewards speak out when necessary and help others resist the temptation to take the easy way out,” he adds.

Lastly comes alignment, when leaders strive to align the organisation on its journey to achieving triple-crown objectives. He says: “It starts with the ‘colours’ and goes from there into goals, strategy structure, action plans, communication loops, people and processes. It’s a collaborative process. You need to make sure everyone is mov-ing in the same direction.”

According to Gregg, many organisations are misaligned and do not form a cohesive whole. People may be doing good work but unintention-ally working at cross purposes, so alignment is meant to really let people thrive.

Coaching employees by giving them small leadership tasks is a good way of fostering leaders in an organisation, says Gregg

When the people have the freedom to speak without fear, the country grows

- Jacqueline Ann Surin

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“While some of us may belong to a minority group in Malaysia, that doesn’t mean that we’re not just as equal in citizenship as those who belong in the majority group.

The new voice for MalaysiansThe Heat takes a curious and critical look at current issues which resonate with the urbanites and emerging affluent

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“At times we say things to please people, to gain acceptance, or we say intentionally hurtful things to gain attention.