Politicians can learn from business says new report

Politicians can learn from forward-thinking business leaders, according to  the second annual Ketchum Leadership Communications Monitor (KLCM).

Sixty-one percent of people around the world see business leaders as focused mainly on the long-term, countering stereotypes that corporations are obsessed with the next quarter’s profits.

Business chiefs also come out on top for taking responsibility when things go wrong. Politicians, by contrast, trail behind all other leadership categories suggesting that the world of politics has much to learn from the business community.

This is a key finding of the second annual Ketchum Leadership Communications Monitor (KLCM), a global study which polled 6,000 people in 12 countries on leadership, communication and the link between them.

Business leaders still have ample room for improvement despite attaining the highest scores in almost every area.

Of those polled, only 34% view business chiefs as effective leaders and just 35% as effective communicators.

Business leaders experienced the largest drop (13 points) on open, transparent communication –  the number one leadership attribute for the second year running – with leaders overall seeing a 24% drop in their communication score.

Poor leadership communication can directly affect corporate performance and sales.

In the past year, 60% of people stopped buying, or bought less, from a company due to poor perceptions of the behavior of those in charge.

Leadership failure also hits the bottom line far harder than good leadership enhances it.

Poor leadership perceptions led 51% of respondents to buy less of a firm’s products and services, and 44% to boycott it – while positive leadership perceptions prompted only 36% of respondents to buy more and 42% to start buying.

People also view employees and third party analysts as the most credible representatives of an organization ahead of senior leaders, with the CEO and other senior management coming in respectively at 6th and 7th place from among 12 sources of trustworthy information.

Overall, one in four said leaders in general were demonstrating effective leadership and there is a 21 point gap between expectations of leaders and their ability to meet them.

This cynicism is strongest in Europe, where only 8% are more confident that leaders will be effective in 2013. Just 16% believe leaders are effective communicators and only 14% credit European leaders for taking appropriate responsibility when they fall short of expectations. China has the most positive views on its leaders with 58% believing that business chiefs are the most effective, followed by 49% for politicians who topped the list last year.

Perceived effectiveness of Chinese political leaders dropped 12 percentage points in 2013 (from 61% to 49%), falling behind business leaders who are up from 53% to 58%. Effectiveness of communication from political leaders also declined greatly year-over-year, falling 14 percentage points from 2012 to 2013.

In order to build credibility, the Chinese want leaders to listen and consult more to help find elusive solutions (63%) above all other behaviours. Under the current challenging and rapidly changing times, 58% of Chinese feel that leaders need to provide a clear overall vision for how economies, businesses and other organizations can survive and prosper.

China values collectivist attributes such as corporate social responsibility and ethical business practices over individual-focused attributes. In China, 44% recognize the importance of corporate social responsibility, higher than any other nation included in this year’s study.

“This year’s data shows a striking link between leaders’ words and deeds, and their customers’ impact on what they are selling,” said Kenneth Chu, partner and CEO of Ketchum Greater China. “At the same time, the fact that employees at large currently carry far greater credibility as company ambassadors than senior management cannot be ignored.”

While confidence that leadership will improve in 2013 remains fragile, the study clearly shows  a desire in countries around the world  for a different breed of open, collaborative, consultative leadership, which balances leadership  by example with the humility to admit mistakes. And ‘Generation-X’ leaders, aged 35-50, are the community the world has in its sights, with 62% globally and 58% in China looking to them to shape the future.

If leaders in any industry serve as a role model, the technology sector is setting the standard, performing highest on every measure and enjoying an overwhelming 14 percentage point advantage over its nearest rivals on leadership prowess.

The leaders in the technology industry also come out on top on both communications effectiveness – 44% rate those in the sector as impressive communicators – and taking responsibility when their industry falls short, with 34% scoring them strongly.

Chris Liu, partner and Chief Business Officer of Ketchum Greater China, said: “Business chiefs surpass politicians in perceptions of leadership in China as a result of the country’s high economic growth, particularly with Chinese businesses’ increasing presence in the international market. The survey shows that the technology sector is setting the standard for effective leadership in China with 58% recognizing the leadership prowess of tech leaders. This finding is echoed in a recent Entrepreneurs’ Daily report where seven out of 12 leading business chiefs are from the tech sector, including Jack Ma of Alibaba, Yang Yuanqing of Lenovo, and Ma Huateng of Tencent, who are no strangers to us.”

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