Kirstin Ferguson – Australian Financial Review

June 2, 2022

Leaders are so busy ‘leading’ they seldom listen to feedback about their own flaws, thus failing to see the consequences of their actions.

Too many leaders believe they are always right, until it becomes clear they are not.

Convinced they are the smartest person in the room, leadership blind spots can make it hard to read the room. That’s why some leaders find themselves in a different room altogether.

Less than two weeks ago, Mike Cannon-Brookes and his investment arm, Grok Ventures, warned the board of AGL it would need to start listening.

AGL’s then-chairman, Peter Botten, shot back. Cannon-Brookes’ proposal, Botten maintained, was “out of touch, undeliverable and irresponsible nonsense”. This week Botten resigned, leaving the company in a “godawful mess”, according to Tony Wood, energy program director at the Grattan Institute.

Former prime minister Scott Morrison has lost the federal election and resigned as leader of the Liberal Party. Asked by a journalist on the campaign trail if part of his problem with Australians is to “keep telling them what they know, rather than listening”, he responded by acknowledging he could be a bit of a bulldozer. Few trusted this brief moment of insight would lead to any meaningful change, and he is no longer prime minister.

Last week in The Australian Financial Review, Australian Institute of Company Directors CEO Angus Armour correctly suggested the election result sent boards a critical message about trust. The message was even louder when it came to understanding the impact individual leaders play in building and maintaining that trust.

It is tempting to believe any recriminations directed towards former prime ministers after electoral defeats are nothing more than fodder for the Canberra bubble, and in Morrison’s case the feedback is coming hot and strong.

Ousted MPs have reported how often voters spoke to them of their disdain for Morrison. Senior Coalition members have said they stopped listening to him when he failed to understand the gravity of Brittany Higgins’ rape allegations.

Cognitive biases leading to errors

Much of the criticism levelled at Morrison suggests an inability to listen, a culture where colleagues did not feel safe to speak up and, ultimately, a failure to “read the room”, whether it is the party room itself or a much larger room. A room filled with Australian voters.

Morrison is far from the only leader who has been accused of failing to listen. No-one is immune from cognitive biases leading to errors in how we think. We all have them, and they may become amplified by power, title, status and authority.

Before Hamish Douglass stepped away from Magellan, a leaked Mercer report said “there seems little room for views that differ to Douglass”. The former CEO of the Sydney Symphony Orchestra, Emma Dunch, was described in yet another leaked report, as having “a character that seeks to assert control rather than build consensus”.

Newcrest CEO Sandeep Biswas was forced to apologise for his previous command-and-control style and commit to being a more inclusive leader.

What if developing self-awareness and an ability to “read the room” had a greater focus in Australian organisations? Could the endless procession of cultural reviews and reputational consequences be avoided?

Early results from research I have undertaken in conjunction with the QUT Business School shows that being able to lead with perspective – or an ability to make sense of and “read the room” – has a truly special quality. Also critically important for modern leaders is being able to understand your limitations. Both require high levels of self-awareness.

People who lack self-awareness typically have inflated opinions of their contributions and/or performance as compared to how others see them.

They might not listen to feedback or they might take credit for successes while blaming failures on others. They typically overestimate how much others agree with them and assume everyone shares the same beliefs they do.

Here’s the rub. Ask senior leaders if they are self-aware and the chances are they will say yes. Accurately appreciating the impact we are having on others is difficult.

A whopping 95 per cent of people believe they are self-aware, but the sobering statistic is that only 10 to 15 per cent of the people we work with are likely to agree with us.

All leaders must take a searching look in the mirror and make sure the genius we see reflected is not a monster to others.

Business leader Jeff Immelt confessed his unwillingness to listen to good advice was one of his five big mistakes while chief executive of General Electric. Reflecting on his time as CEO, Immelt said he realised it was the frank, tough advice of Ruth Porat, then investment banker at Morgan Stanley and now chief financial officer at Alphabet, whom he relied on most during the financial crisis. She would fearlessly tell Immelt what others saw and thought but were presumably too frightened to share.

Without working hard to develop our levels of self-awareness about the impact we are having on others, including understanding and acknowledging our limitations, we are flying blind as leaders.

Culture of psychological safety

Coinbase, a US cryptocurrency trading firm, is trying to create a culture of radical transparency by offering frequent “moments of micro-feedback” using an app called Dot Collector.

Employees rate their co-workers and bosses on how well they exemplify the values of the firm including giving a thumbs up, thumbs down or neutral rating during meetings and other interactions.

Sounds a little like the worm of past election debate nights.

However, for these leaders it is your colleagues providing real-time feedback of your leadership.

More traditional 360-degree reviews offer an in-depth way to help leaders develop insight into a leader’s impact on others. Perhaps one way to help avoid electoral defeat in future might be to institute 360-degree reviews for cabinet ministers before loading onto the campaign bus.

At a minimum, leaders can build self-awareness and trust by creating a culture of psychological safety so the people they lead can speak up directly without fear of repercussions. Companies such as Google and Microsoft have ingrained processes in their workplace cultures to continually measure and assess the level of psychological safety people feel at work.

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