Foreword by
First published in 2014 by Major Street Publishing Pty Ltd
@ Nicholas S. Barnett 2014
The moral rights of the author have been asserted
National Library of Australia Cataloguing-in-Publication data:
---------------------------------------------------------------------------Author:
Barnett, Nicholas S.
Title:7 Business Habits that Drive High Performance /
Nicholas S. Barnett.
ISBN:
9780987542953 (hardback)
Includes index
Subjects:
Employee motivation.
Personnel management.
Success in business.
Dewey Number: 658.314
---------------------------------------------------------------------------All rights reserved. Except as permitted under the Australian
Copyright Act 1968 (for example, a fair dealing for the purposes
of study, research, criticism or review), no part of this book may
be reproduced, stored in a retrieval system, communicated or
transmitted in any form or by any means without prior written
permission. All inquiries should be made to the publisher.
Illustrations by Elizabeth Barnett
Cover and internal design by Anthony Barnett & Elizabeth Barnett
Printed in China through Asia Pacific Offset Limited
ISBN: 9780987542953
I dedicate this book to the staff of Insync Surveys
who are so passionate about helping their clients
achieve sustainable high performance.
Praise for 7 Business Habits That
Drive High Performance
“Our highest performing business units all have the highest
scores in employee engagement, Client Net Promoter Score
measures, Contractor Satisfaction and are lead by our best
leaders as measured by their people in our leadership surveys.
Our best leaders also deliver the best financial results, are the
most efficient in terms of productivity and have the lowest
staff turnover. We find the common theme across each of our
high performing business units is that the leaders of those
business units practise the 7 Business Habits That Drive High
Performance. There’s a clear, tangible link. Practise the 7
Business Habits and your business unit will become a high
performing business.”
Peter Acheson, CEO, Peoplebank Australia Limited
“This book is a timely reminder that economics is essentially a
human enterprise. The emphasis that it gives is an ever-needed
caution about the importance of human factors in any enterprise:
it is a lesson that we ignore at our own economic risk. The basis
of the presented argument is one steeped in hard-core data and,
as such, is one strongly deserving of our serious consideration.”
Dr Ronald D Francis, Author and academic. His books
include: The science of management (with S. Moss),
Leadership in Asia-Pacific (with A. Armstrong & N.
Muenjohn) and Business ethics in Australia: a practical guide.
“7 Business Habits is a must read for all business leaders. The
outstanding learning for me is the fact that success is driven
not by any one of the habits alone, or even a few together, but
it is only through embracing them all that leaders will drive
high performance.”
Katie McNamara, Partner, Consulting – Strategy, Deloitte
Touche Tohmatsu
“In the 10 years I have known Nicholas Barnett I have observed
his great ability to grow his businesses and make them successful
high performance organisations. What you read in 7 Business
Habits That Drive High Performance is what really works and
resonates strongly with my own experience.”
George Savvides, Managing Director, Medibank Private
“The key to delivering sustainable, superior shareholder returns
is getting the people dimension right. In any organisation,
people are the key to driving high performance – whether in
terms of internal productivity or customer satisfaction. Nick’s
book provides a simple framework for leaders at every level to
understand the importance of creating an authentic vision and
motivating their teams to achieve extraordinary performance,
within the context of the highest standards of values, behaviours
and ethics. This resonates with my experience of leadership in
a range of major organisations, which has reinforced the belief
that people truly make the difference.”
Michael Ullmer, Non-Executive Director, Woolworths
and Lend Lease, and previously Deputy CEO, National
Australia Bank
“Nicholas Barnett’s new book titled, 7 Business Habits That
Drive High Performance is well worth the read. Powerfully
simple, it concludes that the most important habit is to live
an inspiring vision. Everyone wants to be led with a sense of
purpose and hope and this result confirms that. Five of the
other habits go to the heart of how an organization manages
its people and customers – lessons all too often forgotten as
hard numbers and egos can regrettably take centre stage. And,
yes, finally – it’s good to have sound systems that are accessible,
simple and clear. This research is highly consistent with research
from our Institute. Making it all happen continues to represent
the journey ahead for all of us in the workplace.”
Peter Wilson AM, National President and Chairman,
Australian Human Resources Institute
“At BHP Billiton we have the good fortune to have a charter that
recognises the need for superior performance in all our people.
In our industry we have the equally good fortune to know that
what we do makes a difference; helps improve the lives of millions
of people and develops the global economy. To be successful we
need to harness the energy of one team. The 7 Business Habits
provides a guide to achieve this by creating a clear and compelling
vision and fostering a transparent, caring culture underpinned by
shared values. Consistently applied over the long term, the Habits
will meet the personal needs of each employee by developing
trusted leaders who are respected and supported and who create
that vision. They will also foster a workplace where each person
can make a meaningful, valued and sustainable contribution.”
Karen Wood, President, BHP Billiton and previously
President, Human Resources
Acknowledgements
I could not have written this book without a huge amount of
support, advice and encouragement from so many people. To
those many people, I say a very big thank you!
This book, like my first book, GPS for your Organisation®:
how to energise your employees and build sustainable high
performance, has been a family affair which makes me ever so
proud. My eldest daughter, Elizabeth, did all the illustrations,
the lettering on the cover and the chapter numbers. My son,
Anthony, designed the cover and did the layout of the book.
My daughter Sara typed many drafts of the book.
My wife, Lisa, as always provided me with much support,
wise counsel and encouragement during the 12 months or
so that I dedicated to this book. Her unfailing love, unique
perspectives and intuition add to the effectiveness of all my
endeavours and have made this a better book.
A special thank you also to Insync Surveys for supporting
not only me in writing this book, but in providing me with
access to the important and extensive research upon which
this book is based. Those who carried out or assisted with
that research or who read and gave me advice in relation to
this book included Lily Ivicic, Laura Barker, Laura DaintonSmith, Dr Eva Wachsen and Murray Chapman. Laura Barker
met with me weekly, particularly in the early stages, which
helped me stick to a project plan for this book that we had
created together. She also followed up on many important
administrative matters to bring this book to life.
To my Executive Assistant, Margaret Rogers, a big thank you
for typing and restructuring so many drafts of this book and
for acting as my confidant and advisor and providing me with
such loyal, outstanding service for the last 12 years.
Steve Clifford, Simon Barnett and others also read this book
and gave me some helpful advice. Thank you also to Stephanie
Rountree and Louise Sweetland who carried out particularly
good edits of this book. Thanks also to Ken Blanchard and
Renee Broadwell for their invaluable advice in the latter stages
of finalising this book.
A big thank you to Peter Acheson, Ronald Francis, Katie
McNamara, George Savvides, Michael Ullmer, Peter Wilson
and Karen Wood for reviewing this book and giving it
such wonderful endorsements and also to Brian McNamee
who wrote such a fabulous Foreword. You are all true high
performers who have exemplified the 7 Business Habits in
your leadership of high performing teams and organisations.
And finally, thank you also to Lesley Williams of Major
Street Publishing for her wise counsel and support and for
publishing this book.
Contents
Foreword by Dr Brian McNamee AO
Preface
xv
xvii
Introduction
What this book is about and why it is important
100,000 employees can’t be wrong
High performance is cumulative
Businesses, companies and organisations
The 7 Business Habits are inter-related and indispensable
Organisational habits, not individual habits
Ethical leadership and good governance
Not a quick fix
Who should read this book?
How to use this book effectively
How this book relates to the author’s first book
1
1
3
4
5
5
6
7
9
10
11
11
Chapter 1 Habits create cultures
Your organisation’s culture is a reflection of you and
your habits Geographic, cultural, personality and other differences
Dominant cultures and sub-cultures
Action checklist
13
Chapter 2 What is a high performance organisation?
Financial sustainability
Balanced scorecard
19
19
20
13
15
16
18
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7 Business Habits that Drive High Performance
Non-financial measures
Lead and lag indicators
It’s a journey not a destination
The look, feel and smell of high and low performance
Action checklist
22
23
24
24
27
Chapter 3 Habit 1: Live an inspiring vision
It all starts with an inspiring vision
A vision for your organisation, not for the world
A shared vision, not just the leader’s vision
Connect with the heart, not just the mind
A vision must become a way of life
A strong foundation in difficult times
A minor crack can become a chasm
Many vision statements gather dust
How to create and embed an inspiring vision
Action checklist
Chapter 4 Habit 2: Communicate clear strategies
and goals
Strategy brings vision to life
Answer key strategic questions
Strategy on a page
Invest in clarity of internal communications
Add energy and focus with a tagline or slogan
Cascade your goals and develop a scorecard
Consider the risks
Action checklist
29
30
31
32
33
34
34
35
36
37
38
Chapter 5 Habit 3: Develop your people
Select, recruit, coach and support the right people
49
51
39
40
41
42
43
44
45
46
48
Contents
Unleash the potential within
Start with your leaders
“On-the-job” development is underrated
Develop career paths
Holistic education in the organisation’s affairs
Partner with others to develop your people
Build a mentoring and coaching structure
Action checklist
52
53
54
55
56
57
58
59
Chapter 6 Habit 4: Go out of your way to recognise
your people
Saying thanks makes a big difference
Be bold, be surprising
Build recognition into your culture and DNA
Institutionalise employee and team recognition
Recognise strengths even when reprimanding an employee Action checklist
61
62
63
64
65
66
68
Chapter 7 Habit 5: Genuinely care for your people
Be authentic
Individuals must care for individuals
Caring has many dimensions
Manage the psychological contract well
Inaction speaks loudly too
Don’t undo years of great work
Action checklist
69
70
71
72
74
76
77
78
Chapter 8 Habit 6: Listen and adapt to your customers’
needs
79
Do customers or employees come first?
80
Where is your money coming from?
81
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7 Business Habits that Drive High Performance
Build relationships, not transactions
Move from satisfaction to loyalty to advocacy
Build a customer-centric organisation
Action checklist
82
83
84
86
Chapter 9 Habit 7: Continually improve your systems Frustrating systems undermine your other good work
Align IT and business strategy
Recognise the constraints of legacy systems
Incremental improvements or wholesale changes?
Installing a new system is only step one
Action checklist
87
88
90
90
92
93
94
Chapter 10 How the 7 Business Habits inter-relate
All 7 Business Habits are essential
Habits 1 and 2 form the foundation
Habits 3, 4 and 5 turbo-charge your efforts
Habit 6 provides the necessary external focus
Habit 7 greases the wheels
Action checklist
95
95
96
97
99
100
102
Chapter 11 Why incur the cost and effort?
Is it worth it?
A much better place to work
Improved employee engagement and retention
Improved customer engagement and loyalty
Greater productivity and innovation
Greater resilience and change capability
Sustainable high performance
There will be a lead time
Action checklist
103
103
104
105
106
107
108
109
110
111
Contents
Chapter 12 How to ingrain the 7 Business Habits
How do you know?
What gets measured gets managed
Treat it like any other change program
Use the right brain too
Disciplined implementation of initiatives
Bring your people on the journey
Recognise and celebrate your organisational achievements Recruit people with good habits
Be persistent – see it through
Keep raising the bar
Action checklist
113
113
114
114
116
117
118
119
120
121
122
123
Chapter 13 Why don’t more leaders adopt these habits? Some questions
Quick fixes and new fads
Old habits die hard
Hard heads and hard hearts
Lack of leadership and organisational conviction
Ego, greed and self-obsession
No innate belief in human potential
Action checklist
125
125
125
126
127
128
129
130
131
Chapter 14 The importance of good leadership
Not just an HR exercise
Leaders shape the culture
Leaders must walk the talk
Leaders inspire
Leaders set a clear direction
Authenticity and servant-hood is required
133
133
134
135
136
137
137
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7 Business Habits that Drive High Performance
Action checklist
139
Chapter 15 A 7 Business Habits test for your
organisation
141
Appendix 1: About Insync Surveys’ study
How this study was conducted
The biggest gaps between high performance and low
performance organisations
Employee and CEO perceptions are linked
145
146
147
152
Appendix 2: Insync Surveys’ high performance
framework
Alignment and engagement
Energise
Execute
Engage
153
154
155
156
157
Appendix 3: The 7 Business Habits’ test for your
organisation
158
xv
Foreword by Dr Brian McNamee AO
I am delighted to write the Foreword to this book because
the 7 Business Habits gel so strongly with my own experience
during my 23 years as Chief Executive Office and Managing
Director of CSL, a leading global specialist biotechnology
group. At CSL, I endeavoured to practise and to achieve
simplicity and clarity of message. This book provides a simple
and clear message – if you want to increase your organisation’s
performance, adopt and live the 7 Business Habits.
CEOs and business leaders have many things they need to
get right. Most have their own framework, methodology or
list of the important few things that guide their thinking
and actions. The 7 Business Habits are those important few
things when it comes to dealing with and getting the most
out of their employees. It starts with adding meaning and
purpose and inspiring employees. The next building block is
the communication of clear strategies and goals. Habits 3, 4
and 5 turbo-charge your efforts by putting your employees as
number one. Habit 6 ensures there is a strong customer focus
and Habit 7 greases the wheels as systems and processes are
continually improved.
As business leaders, we spend an enormous amount of time,
money and effort discussing, debating and formulating our
strategies and planning our major projects. It’s probably fair
to say that we do not spend enough time discussing, debating
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7 Business Habits that Drive High Performance
and developing plans to change our organisational habits
and culture that have such a large bearing on whether our
strategy will be executed successfully. This book sets out a
simple framework for CEOs and their executive teams to use
to ensure that they are practising the right business habits
and creating the right cultures to drive high performance.
Each of the 7 Business Habits are covered individually in
many hundreds of books. The extensive research, however,
conducted by Nicholas and his team, shows that the 7 Business
Habits are an inter-related and indispensable group of habits
that differentiate high performance from low performance
organisations. Nicholas points out that you can’t treat the 7
Business Habits as a smorgasbord where you just select the
ones you like, nor can you just try some or all of them for a
season. To achieve high performance, all 7 Business Habits
must become your organisation’s way of life.
xvii
Preface
The message of this book is that boards, CEOs, executive
teams and their organisations have within them all they need
to substantially lift their performance. They simply need to
look inside their organisations at how they deal with the
biggest and most valuable asset they have – their employees.
Many leaders say their employees are their most valuable
asset, many of their actions send a different message.
Every organisation is capable of lifting its performance,
including those that are already out-performing their peers
or competitors. Low performance organisations have the
scope to lift their performance even further. Many need to
learn some new habits – the 7 Business Habits – and begin
to embed them deeply into their organisation’s culture and
DNA until those habits become its new way of life.
If an increase in performance is to be sustained over an
extended period, much of that increase will, necessarily,
be derived from the extra focus and urgency of engaged
employees who apply extra discretionary effort in the pursuit
of their organisation’s goals. The 7 Business Habits, taken
together and applied consistently, are the key that will unlock
that extra focus, urgency and extra discretionary effort.
You can’t force employees to be more engaged. If you try to
force them, it will almost certainly have the opposite effect.
In those circumstances, they are more likely to withhold
xviii
7 Business Habits that Drive High Performance
their normal effort and will be most unlikely to provide extra
discretionary effort.
Whilst CEO of an IT recruitment company, our leadership
team and I applied, to varying degrees, what we now
know as the 7 Business Habits, to grow the revenue of that
organisation in excess of tenfold to over $300 million during
a five year period. Around one-third of that growth was
achieved through acquisition, with the balance was achieved
organically by passionate, committed, competent and
highly engaged employees who applied considerable extra
discretionary effort in their quest to build the leading IT
recruitment company in Australia. I am convinced that had
we not lived the 7 Business Habits the way we did, our growth
in revenue and value would have been much smaller.
As CEO of Insync Surveys, I’ve had the privilege, with our
team, of helping measure and improve the engagement,
leadership and performance of hundreds of organisations.
I’ve had the privilege of meeting leaders of high performance
organisations and of many organisations that aspire to high
performance. I’ve also met a small number of leaders who
aren’t interested in changing their habits and the habits of
their organisations, as they have either been content with
the status quo or they think it’s their employees who are
the problem.
The leaders I have most admired have been the ones who
have been truly authentic and genuinely cared about their
employees and the community in which they operate. Their
employees have reciprocated and responded accordingly.
Preface
The perspective of those authentic leaders has been far
broader than making as much money as possible. That has
almost been a by-product of living an inspiring vision and
being the best that they can be at delivering a differentiated
product or service.
I have been privileged to have one of Australia’s best and most
respected CEOs, Dr Brian McNamee AO, write the Foreword
for this book. He led Commonwealth Serum Laboratory
(CSL) at the time of its listing on the Australian Securities
Exchange (ASX) in 1994 and retired as CEO and Managing
Director just short of 20 years later, having transformed CSL
into a leading global specialist biotechnology group. During
that time, CSL out-performed the S&P/ASX 100 Industrial
Index by 2.5 times, which represents around a cumulative
5% per annum out-performance of the average comparison
companies and possibly achieved around a 10% per annum
out-performance of comparable low performance companies.
The 7 Business Habits are well worth adopting, because the
difference between high and low performance is so significant,
particularly over an extended period. A cumulative difference
of only 7% per annum in performance and enterprise value
will mean that a high performance entity will achieve double
the growth in value of a comparable low performance entity
over a 10 year period.
There are numerous additional benefits of adopting the
7 Business Habits, including making your organisation a
better place to work, improving employee engagement and
retention, customer loyalty and advocacy, productivity,
xix
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7 Business Habits that Drive High Performance
innovation, organisational resilience and change capabilities.
All of these factors are inter-related and build on each other
to increase your performance even further.
I hope this book helps challenge your thinking and gives you
new reasons and impetus to embed and live the 7 Business
Habits for the significant benefit of your organisation, your
employees and you.
Introduction
What this book is about and why it is important
Do you wish you knew the main initiatives your organisation
could take to increase its productivity, performance and
profitability? Would you like to know the main activities that
high performance organisations do that low performance
organisations do not do? What are the main initiatives that
low performance organisations need to take to improve their
performance and begin their journey to high performance?
What are the main activities on which high performance
organisations should expend extra energy in order to lift
their performance even further? These and other important
questions are addressed in this book.
In times of uncertainty and periods of little or no growth
many organisations downsize, outsource, restructure, cut or
defer discretionary and capital expenditure and find other
ways to cut employee and other costs. Many organisations
2
7 Business Habits That Drive High Performance
have little extra “fat” to cut without also cutting significant
organisational capacity and capability. There is another way.
Organisations can significantly increase their productivity and
performance by changing some of their organisation’s habits.
This book identifies the main things (the “habits”) that
most differentiate high performance organisations from low
performance organisations. To be truly considered as habits,
these things must be so deeply engrained into the culture and
DNA of the organisation that they become its way of life.
The 7 Business Habits, which are also referred to as the
7 Organisational Habits, are:
2
3
Communicate
clear strategies
and goals
Develop your
people
1
4
Live an
inspiring vision
Go out of your
way to recognise
your people
High
performance
7
5
Continually improve
your systems
Genuinely care for
your people
6
Listen and
adapt to your
customers’ needs
Introduction
Leaders of high performance organisations embed the
7 Business Habits so deeply into every nook and cranny of
their organisation that they are lived no matter what the
circumstances, during both good times and bad. They are
relentless in their search to find new ways to express these
habits and bring them to life. They treat their quest for
ongoing improvement as a journey, knowing that there is no
finish line.
100,000 employees can’t be wrong
The extensive research on which the 7 Business Habits is
based draws on the views of over 100,000 employees from
around 200 different organisations and was conducted by
Insync Surveys in Australia. Those views were analysed to
derive the 7 Business Habits. Details of the way the research
was carried out and the differences in the views of employees
of the high and low performance organisations are included
in Appendix 1. The differences in views of the employees of
the high and low performance organisations were significant,
as can be seen from the charts in Appendix 1.
This research was supplemented by interviews with many
directors, CEOs and business leaders, including with ten
CEOs from some of the highest performance organisations in
the research study. Some of the practical advice included in
this book was shared by those interviewed.
3
4
7 Business Habits That Drive High Performance
High performance is cumulative
High performance companies will make significantly more
profit and generates significantly more cashflow that they
can reinvest in additional capacity and capability than low
performance companies. This further compounds the benefits
achieved by the high performance companies. Similarly,
low performance companies make significantly less profits
and have significantly less cashflow to reinvest. If the low
performance companies make losses, they will be starved of
cashflow and might actually go broke and be forced to close.
High performance companies regularly out-perform low
performance companies in terms of profitability by up to 30%
per annum. If a high performance company outperforms a low
performance company by only 7% compound per annum, the
high performance company, starting from the same base, will
be worth double the value of the low performance company
in around 10 years. The extent of the greater performance,
particularly over an extended period, is significant.
There are numerous other inter-related benefits of adopting
and living the 7 Business Habits which also add to the
cumulative effect of increasing performance. Those benefits
include making the organisation a much better place to
work and improving employee engagement and retention.
Those engaged employees will give more extra discretionary
effort and apply extra energy and focus towards achieving
the organisation’s goals. The higher employee retention
will reduce employee turnover costs. Customer loyalty and
Introduction
advocacy will improve, as will productivity and innovation,
as a result of having more engaged and longer serving
employees and customers. The organisation will also build
greater organisational resilience and change capability. All
the above will build on each other and increase performance
even further.
Businesses, companies and organisations
The concepts apply to all groups of people that come together
for an extended period to achieve an established objective,
including to “businesses”, “companies” and “organisations”.
Accordingly, these words are used interchangeably The
concepts also apply to partnerships, joint ventures, firms,
government bodies, not-for-profit entities and charities.
The 7 Business Habits are inter-related and
indispensable
The 7 Business Habits are inter-related and indispensable
to the delivery of sustainable high performance. Extensive
research has shown that the 7 Business Habits, taken
together, are the main differentiators of high and low
performance organisations.
Leaders who think they can choose to adopt one or more, but
not all, of the 7 Business Habits will be disappointed. Those
who choose to trial some or all of the 7 habits for a period before
5
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7 Business Habits That Drive High Performance
moving onto something else will be similarly disappointed. It is
only by embedding all of the 7 Business Habits and continually
improving the way they are lived that organisations can expect to
achieve sustainable high performance.
Embedding the 7 Business Habits will be much less costly and
disruptive than most other productivity and performance
programs. In addition to costing less, embedding these 7
habits into your organisation’s way of life will actually add
to your organisation’s cohesion and make it a better place to
work. Productivity and performance will be improved as a
result of the increase in employee engagement and the extra
discretionary effort, energy and focus of employees.
Leaders will need to walk the talk. If the 7 Business Habits
are not continually practised, lived and modelled by the
leadership team, they won’t gain traction in the organisation.
Leaders must adopt the habits in an authentic way in the belief
that adopting these habits will not only increase performance,
but it is the right thing to do by all employees.
Organisational habits, not individual habits
Stephen Covey wrote an excellent book titled The Seven
Habits of Highly Effective People.1 That book has been widely
read and has helped many thousands of people improve their
own individual effectiveness.
Mr Covey’s book is focused on the habits that individuals
must adopt and ingrain to improve their own effectiveness
1
S. Covey, The Seven Habits of Highly Effective People (Free Press, New York 1989).
Introduction
and to stand out from the crowd. His book is recommended
for young people, in particular, so they can create the right
individual habits as early as possible on their life journey.
Ingraining those habits will make them more effective people
in all aspects of their lives, whether personal, family, business
or community focused. Mr Covey’s book identifies the habits
of individuals that most differentiate effective individuals
from ineffective individuals.
This book identifies the 7 Business Habits that most differentiate
high from low performance businesses, companies and
organisations. In doing so, it identifies the habits that low
performance organisations need to begin to adopt if they
are to set out on their journey towards high performance. It
also identifies the habits that medium and high performance
organisations need to more deeply ingrain and excel at if they
are committed to continually improving their performance.
Organisations are made up of individuals. The 7 Business
Habits are things that all employees must do as part of “the
way we do things around here”. As the 7 Business Habits are
modelled by the CEO and leadership team and practised by
employees, they will become deeply ingrained into the fabric
and culture of the organisations and become its way of life.
Ethical leadership and good governance
The traditional view of leadership stated that the primary
goal of a leader was to increase productivity, performance
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7 Business Habits That Drive High Performance
and profits for the benefit of the organisation’s shareholders.
This resulted in many leaders becoming overly obsessed with
financial outcomes, no matter the costs or implications. This
obsession became inextricably linked to the leaders’ view
of their own self-worth and their pursuit of personal gain.
Some say this self-serving approach was a cause of the Global
Financial Crisis (GFC).
Ethical leadership starts from the premise that an
organisation’s licence or right to operate is provided
by the community. Accordingly, ethical leaders have a
high degree of respect for the rights and dignity of their
employees, customers and other stakeholders, including
their community. They ensure their organisations live an
inspiring vision (Habit 1), and develop a worthy purpose
that goes deeper than simply pursuing profits regardless
of the consequences. Those leaders will empower their
employees by making their strategies and goals clear and
linking individual goals to the organisation’s goals (Habit
2). Developing, recognising and caring for their employees
(Habits 3, 4 and 5) will be priorities for ethical leaders.
As ethical leaders hold themselves and their organisations
accountable to higher standards of values, behaviours and
ethics, their leadership will transform their organisations’
culture and motivate others to adopt those same higher
standards. All of the 7 Business Habits are essential to the
development and maintenance of ethical leadership. Without
ethical leadership, organisations can suffer significant risks
to their reputations and sustainability. This has been borne
Introduction
out over and over again, with the collapses of Enron, Arthur
Anderson, HIH and Lehman Brothers being prime examples.
Ethical leadership is also an essential element of good
governance. Good governance requires that the board
ensures ethical leadership is ingrained in the organisation’s
culture, that the organisation lives an inspiring vision,
and sets and communicates clear strategies and goals. The
board is responsible for setting a high tone at the top of its
organisation and ensuring the high standards set for integrity,
performance and risk management is cascaded down through
the organisation.
The board is also responsible for overseeing the organisation’s
culture and ensuring it is formed and shaped in an appropriate
way. This requires the board to regularly monitor progress of
the extent to which the 7 Business Habits have been embedded
and are being lived, including by reviewing the results of
employee and customer surveys and other measures. They
should also ensure appropriate action plans, resources and
improvement initiatives are put in place to bring about the
change required.
Not a quick fix
If you want to use one or some of the principles in this book
as a quick-fix employee-motivational exercise or to gain
improved performance without a genuine desire to buy in to
the principles, your efforts will probably backfire. Equally,
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you cannot treat the 7 Business Habits as a smorgasbord
where you choose the ones you like, nor can you just adopt all
or some of the habits for a season and expect the full benefits
of higher performance to be achieved.
If, however, you buy in and adopt the framework, principles,
case studies and practical advice in this book, in a passionate
way, then your people will notice. Your words and actions
will be in harmony. Your employees are likely to model
your example, buy in themselves and join you and your
organisations on the journey to high performance.
Who should read this book?
All leaders and aspiring leaders of organisations should read
this book.
It provides important frameworks, principles, case studies and
practical advice to help organisations start or continue on their
journey to sustainable high performance. It is equally applicable
to small, medium-sized and large organisations, whether local,
national or global. The principles in this book can also be
applied in divisions or business units of organisations.
This book is also relevant to all public and private companies,
government entities and bodies, and not-for-profit
organisations. It is particularly relevant to boards, CEOs and
leaderships teams, but will also be useful for aspiring leaders
and executives.
Introduction
How to use this book effectively
This book has been designed as a leader’s handbook or user’s
guide. It does not need to be read straight through from front
to back. You can choose to read the chapters or parts that are
most relevant to you at the time. An extended contents list
has been included for this purpose. It is essential, however,
that readers gain an understanding of the importance of all
7 Business Habits and how they inter-relate, so reading the
whole book will provide the maximum benefit.
It is also recommended that this book be reviewed annually,
say at the start of each calendar year, as a refresher and a call
to action in relation to any habit or habits that need to be
revitalised.
There are many other resources available to support this book
at www.7businesshabits.com and at www.insyncsurveys.com.
au/books
How this book relates to the author’s first
book
The author’s first book, GPS for your Organisation®: how
to energise your employees and build sustainable high
performance, was published in late 2011. It is a practical
guide to help boards, CEOs and leadership teams add clarity
and add buy-in to their organisations long-term direction,
purpose and values. It also adds focus and urgency to their
strategic and business plans.
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GPS for you Organisation shows readers how they can
develop, communicate and embed their own Guidance
and Positioning Statements (GPS) into their organisation’s
culture, messaging and DNA.
Both books note that living an inspiring vision and providing
employees with meaning and purpose is so fundamental
to energising employees and building sustainable high
performance. Both books also highlight the importance of
communicating clear strategies and goals that are aligned to
the organisation’s vision and the importance of leadership
and messaging to embed and make the vision, strategies and
goals come to life.
Habits create cultures
Your organisation’s culture is a reflection of
you and your habits
Who is responsible for creating and maintaining a constructive
organisational culture, providing appropriate leadership and
delivering compelling messaging? The universal answer is the
board, CEO and leadership team. It is not your employees,
your customers or someone else – it is you!
Leaders are accountable for the culture and performance
of their organisations and the outlook of their employees.
This realisation is empowering but to some it can also
be disconcerting. If things are not going so well, if your
employees are not really putting in, or if there is a whole lot
of negativity in the workplace, it is all too easy to blame it
on your employees or on other circumstances. How many
boards listen to, and accept, the CEO’s reasoning for things
being a bit tough rather than asking the CEO what he or she
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needs to change? How many CEOs in those circumstances
fail to look at themselves? Unfortunately, the answer to both
questions is – too many.
If a leader’s prime objective is to make as much money as
possible by simply employing workers who are themselves
only interested in doing the job in order to be paid, they
will end up with employees who are not engaged with
the organisation. The leaders will also be unlikely to
achieve their planned financial success over a sustained
period. Conversely, if they genuinely aspire to build a
high performance organisation, they are far more likely to
achieve this than those who simply desire to maximise their
profits from the business. They will also be more likely to
attract and retain employees who take pride in their work
as part of a greater whole. Sustained financial success will
be a likely by-product.
This book sets out the 7 Business Habits that leaders
need to adopt and live every day if they want to develop
a constructive organisational culture and build sustainable
high performance with employees who take pride in
their work.
If you are not happy with your organisation’s culture and
environment and the approach of your employees, take a
good look at yourself and your habits. Your organisation’s
culture is a reflection of you and your aspirations, messaging,
values and behaviours.
Habits create cultures
Geographic, cultural, personality and other
differences
An employee’s outlook and approach will depend to some
extent on his or her personality, upbringing, cultural
background, religious beliefs, geographic location and other
factors. Individuals are, by definition, unique. Individual
differences can be significant, particularly in different
countries and even in different regions.
A constructive culture is essential to the effective
implementation of strategy. A destructive culture will kill a
good strategy every time.
Creating a constructive organisational culture with people of
different personalities and backgrounds and from different
geographies can be a challenge. Some organisations simply
allow their cultures to evolve. Others are deliberate about
forming and shaping their organisation’s culture with the
attributes that are most likely to lead to success. The latter
approach is more desirable.
Diverse employees can be bound together across hierarchies,
geographies and timeframes by a constructive culture.
Culture can be the glue that ensures groups have common
aspirations, goals, plans and values. If an organisation is
explicit and intentional about embedding its vision, purpose
and values in its culture and DNA it will develop employees
with a greater passion and commitment, no matter what their
background or personality. If it talks little about its vision and
purpose and is not explicit about the values that it believes
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are important, it is more likely to attract employees with
little commitment to its organisation. Cultures built on a
compelling vision and explicit values will act as a magnet
to attract employees who are inspired by that compelling
vision and who live those values; also it will repel those
employees who do not live by those values and are not
inspired by that vision.
Before setting up in new geographies or regions or trying
to integrate new acquisitions, boards and CEOs need to
make well informed judgements as to whether, how well,
and how quickly they can replicate their organisation’s
constructive culture.
Dominant cultures and sub-cultures
Many diversified organisations have a dominant culture
that emanates from its head office or its dominant business.
The core elements of the culture of diversified groups can
be clearly evident. Those core elements often go back to the
organisation’s roots; for example, a diversified consumer
products retailer may be described as “a grocer at heart” if
that is the way they started out.
Diversified groups that have strong central control and share
resources and systems will be likely to have a dominant
culture that emanates from its centre, that may or may not
be in the best interests of all business units. Non-core, or
peripheral businesses of large groups, usually fail to reach
their full potential until they are cut loose.
Habits create cultures
The sale of Dick Smith electronics by Australian retailer
Woolworths, a grocer at heart, is a good example of this.
The private equity buyer was able to increase the value of
Dick Smith at least five-fold within the first twelve months
following its acquisition. The main reason given for the rapid
turnaround was that it could develop a far more agile and
aggressive culture once it was set free from the heavy weight
of Woolworths’ corporate culture.
A strong corporate culture will be supportive of the ongoing
roll-out of additional offices and stores that have the effect of
duplicating the core business.
Organisations that choose to diversify from their core,
however, need to think long and hard about the impact that
the burden of their dominant corporate culture will have on
the performance and profitability of their new business unit.
The new unit will find it hard to develop its own constructive
culture and a compelling vision that is unique yet fits well
with that of its holding company. It will be harder to attract
and develop committed employees to a non-core business of a
group with strong central control. It will be harder to clearly
articulate a compelling vision and a unique set of cultural
values for the new business unit.
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Action checklist
1Reach a common view with your leadership team on
the extent that they are responsible for the outlook and
engagement of their employees.
2 Discuss with your leadership team whether your
organisation has mainly committed employees working
for it and why you think this is the case.
3 Discuss which parts of your culture enable, and what
parts inhibit, the execution of your strategy. If relevant,
develop a detailed plan to bring about the desired change
to your culture.