A Small Business Guide to Leadership

We look at the key ways employers can inspire and encourage their staff – and create a team that drives your business' growth

A Small Business Guide to Leadership

Why People Respond to Leaders

In the previous section we looked at the qualities of inspiring leaders. The question is, why do these traits produce results?

Pay is only one component of job satisfaction. Other factors like respect and prestige can be tremendously important in making staff feel good about their jobs. The reason that inspiring leadership produces results is that it contributes directly to fulfilling many of people’s emotional needs.

The following are some of the ways that best practice in leadership contributes to improved job satisfaction, motivation and productivity.

Suzie Welch, the learning and development manager at TGI Fridays advises that “When our Step Change programme was introduced, this was explained in a highly visionary way and with such excitement that it made you want to grasp it and say: “This is what we need to do!”

Being Listened To

A business where only senior managers are allowed to “have ideas”, rarely achieves great staff satisfaction. Inspirational leaders ask for, and respect, what their people tell them about how to do things better, and they provide the resources to ensure that the solutions are delivered.

Being Involved

Inspirational leaders involve their people in changes for them to be a success. They give their people the freedom and support to get on with the job. When you walk around these companies, there is an electricity in the air – you can feel the energy and buzz.

Having Fun

In successful companies, people work hard but enjoy themselves in the process. Fun is a great indicator that an organisation is innovative and is also a key innovation driver. At the “100 Best Companies to Work For” you see a lot of fun at work.

Being Trusted

It’s no coincidence that, when you ask people what it is like to work in an organisation run by an inspirational leader, they talk about openness, honesty, respect and trust. These firms can boast highly committed staff who have a great sense of responsibility to their work.

Being Appreciated

Recognition is an absolutely crucial element of inspiration, and few things are more powerful, or simple, than a genuine “thank you”. Inspirational leaders know that it’s vital that people feel appreciated and valued, so they show their appreciation through extensive celebration of success – both formally and informally.

Valuing and Being Valued

The best leaders promote a culture where their people value themselves, each other, the company and the customers. Everyone understands how their work makes a difference. This helps to build a commitment to higher standards where everybody is always looking to do things better. According to Nigle Paine, head of people developement at BBC “To keep faith with staff is the only way forward.”

Leadership Case Studies

Beaverbrooks

Beaverbrooks places great emphasis on communication. It holds annual focus groups and all senior management visit stores regularly to find out what the staff think. In the stores themselves, there are daily meetings and each member of the company gets a monthly one-to-one meeting with a member of the management team. The company is also keen to encourage teamwork and social responsibility, particularly through involvement in charitable activity. Over 4,000 people took part in the most recent Beaverbrooks 10K fun run.

Universal Music

Recognition and reward is a central part of Universal Music’s philosophy. It happens through a mixture of ad-hoc, immediate awards – like concert tickets, nights out and parties – and structured awards and increases in annual leave to recognise long service. To keep things interesting, all staff also have a monthly CD and DVD allowance. The company has found that little, regular “thank yous” like this are a powerful way of creating a buzz at work.

Timpson Ltd

Timpson is consistently in the top five of the annual Sunday Times “100 Best Companies to Work For” survey. This is especially impressive when you find out that over 90% of Timpson’s staff took part in the most recent survey.

So how has Chief Executive John Timpson created this culture?

The Timpson approach is based on “upside down management”, which means giving responsibility and support to staff to make their own decisions. For example, store managers have freedom to:

  • set prices – there is a price list, but it is just advisory
  • spend up to £500 resolving a complaint without escalating it – based on the idea that the cheapest settlements are always at source
  • control stock and ordering.

Staff also have the freedom to test new ideas and ways of working.

John puts it simply: “If it works, tell us. If it doesn’t, we suggest you stop doing it.”

This devolution of responsibility is reinforced through trust and training. All new store managers at Timpson are sent on a two-day residential induction course to learn “how to be free”. From then on, individuals are in charge of their own training. The higher the skill levels they attain, the greater the bonuses they are entitled
to.

One of the most novel aspects of the company’s organisation is the way it has resolved the conflict between the company’s aim of keep costs down and staff’s natural desire to earn more. Timpson set each store’s turnover target at 4.5 times the wage bill. A staff bonus is then paid based on a proportion of any turnover above target.

There’s no upper limit and bonuses are paid weekly, which keeps people motivated.

John says of the bonus scheme: “Our aim becomes helping our people earn more money. We’ve failed if they don’t increase their take home pay substantially each year.”

Other staff benefits include a company pension scheme, financial hardship fund and the use of company holiday homes. This last idea was borrowed from Julian Richer of Richer Sounds, and it’s used as a way of rewarding employees for five or more years’ service.

The net result of this whole approach to management is that staff report that “our management trusts people to do a good job without looking over our shoulder” and that “I can be myself around here”.

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