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Do Australian retailers practice great leadership?

Written by Mike Holtzer for Inside Retail

Do Australian retailers practice great leadership? By ‘great leadership’, I’m referring to the concepts from one of my favourite books, Good To Great by US business consultant and lecturer, Jim Collins. Collins describes a level five leader as, “Self-effacing, quiet, reserved, even shy – these leaders are a paradoxical blend of personal humility and professional will”.

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This says a lot in a few words, but using this definition of a great leader, I don’t believe there are currently many great leaders in retail in Australia.

In addition to the various other stages of taking a good company and making it great, Collins defines what level five leadership is and why it is so important. He uses detailed in-depth analysis of companies that transformed from ‘good’ to ‘great’ over a 15-year period. The list of companies analysed is very impressive.

A level five leader never lets their ego get in the way of successfully transforming a business. They put the long-term success of the business ahead of their own achievement. A proper leader makes decisions that benefit the long-term transformation of the company, instead of short-term decisions that have a short-lived benefit and the glory that goes with it. This can be an issue with Australian retail leaders that is sometimes exacerbated by private equity firms and public companies.

The mirror/window notion is a key concept for level five leaders. They look in the mirror, at themselves, when something goes wrong and blame themselves. When things go right, they look out the window and credit other people for the success. They do not crave the attention and the celebrity status of success.

Often times, people outside the company or industry don’t even know their names. Think of the most successful companies and see if their leaders are front and centre, or if they put the company front and centre. Look at some of the troubled or failed retailers and see if there was finger pointing at who was at fault.

The willingness to set up a proper succession plan and understanding when the business would be better served by a successor is an important aspect of a great leader. The best ones don’t care that they get credit for the success; whereas lesser leaders actually take pride in the fact that the company would fall apart without them.

Level four leaders are effective leaders who push towards a clear and convincing vision, but they lack the humility needed to achieve true greatness. Their egos get in the way of transforming a business. They typically have short-term success and even some great transformation triumphs, but fail to transform companies in the long run. Think Al Dunlap (Scott Paper) and Lee Iacocca (Chrysler). Collins’ Good To Great outlines many examples of these types of leaders.

There are five levels of leader in all. A level five leader is a combination of all of the levels. With stoic resolve, they do whatever it takes to make a company great. As an apt description, a level five leader is referred to as a ‘plough horse’ and a level four leader a ‘show pony’.

It is no small irony that the determination and motivation that gets people into positions of authority often conflicts with the modesty that is required to be a great leader. Many business owners and boards mistakenly believe that they need a CEO who is larger than life.

You will find a potential level five leader where you find extraordinary results and no person is singled out taking all of the glory. As former US President, Harry S. Truman, put it, “You can accomplish anything in life, provided that you do not mind who gets the credit”.

A level five leader has a blend of personal humility and professional will, where they channel ambition into the organisation, not the self. They are not high flyers or larger than life. They look in the mirror when something goes wrong and look out the window when giving credit.

Now, based on this definition, do we have great leaders in retail in Australia?