When employees aren’t just engaged, but inspired, that’s when organisations see real breakthroughs. Inspired employees are themselves far more productive and, in turn, inspire those around them to strive for greater heights.
Our research shows that while anyone can become an inspiring leader (they’re made, not born), in most companies, there are far too few of them. In employer surveys that we conducted with the Economist Intelligence Unit, we found that less than half of respondents said they agree or strongly agree that their leaders were inspiring or were unlocking motivation in employees. Even fewer felt that their leaders fostered engagement or commitment and modelled the culture and values of the corporation.
To understand what makes a leader inspirational, Bain & Company launched a new research programme, starting with a survey of 2 000 people. What we found surprised us. It turns out that inspiration alone is not enough. Just as leaders who deliver only performance may do so at a cost that the organisation is unwilling to bear, those who focus only on inspiration may find that they motivate the troops but are undermined by mediocre outcomes. Instead, inspiring leaders are those who use their unique combination of strengths to motivate individuals and teams to take on bold missions — and hold them accountable for results. And they unlock higher performance through empowerment, not command and control.
Here are some of our additional findings about how leaders both inspire, and get, great performance.
Vision, focus, servanthood and sponsorship help them lead.
We found that people who inspire are incredibly diverse, which underscores the need to find inspirational leaders that are right for motivating your organisation — there is no universal archetype. A corollary of this finding is that anyone can become an inspirational leader by focusing on his or her strengths.
Although we found that many different attributes help leaders inspire people, we also found that you need only one of them to double your chances of being an inspirational leader. Specifically, ranking in the top 10% in your peer group on just one attribute nearly doubles your chance of being seen as inspirational. However, there is one trait that our respondents indicated matters more than any other: Centeredness. This is a state of mindfulness that enables leaders to remain calm under stress, empathise, listen deeply and remain present.
Effective leadership isn’t generic. To achieve great performance, companies need a leadership profile that reflects their unique context, strategy, business model and culture — the company’s unique behavioural signature. To win in the market, every company must emphasise the specific capabilities that make it better than the competition.
We found that the same is true of leaders: They must be spiky, not well-rounded, and those ‘spikes’ must be relevant to the way that the company creates value. For example, an organisation that makes its money out-marketing the competition isn’t likely to be inspired by a leader whose best talent is cost management. Spiky leaders achieve great performance by obsessing about the specific capabilities that underpin their company’s competitive advantage. They make sure those capabilities get an outsized, unfair share of resources and provide the key players the freedom they need to continue to excel.
Even with a clear idea of your company’s winning behavioural signature, leaders need to develop new ways of operating. We found that leaders who both inspire people and generate results find ways to constructively disrupt established behaviours to help employees break out of culture-weakening routines.
When Howard Schultz returned to Starbucks as CEO after a nearly eight-year hiatus, he realised that Starbucks’ unique customer-focused coffee experience was now in the back seat. In the front seat were automation and diversification, both implemented in pursuit of throughput and growth. Schultz took swift action to change the company’s direction; he even shut down 7 100 US stores for three hours on 26 February 2008 to retrain the baristas in the art of making espresso. In this highly symbolic move, he left no doubt about his intentions — and about what he thought it would take to make Starbucks great again.
When Alan Mulally came to Ford in 2006 to help turn around the business, he took bold actions to change the way the company operated. In one highly visible moment, he applauded Mark Fields (who would eventually become his successor) for admitting to a failure in an executive meeting. That was pretty much unheard of at Ford and it set the tone for the open and honest communications required for a new culture at the company.
Drawing insight from Eastern philosophy, one of our clients once said, “If you want to change the way of being, you have to change the way of doing.” This struck us as profound in the moment and even more profound over time — and the sentiment matches what we learnt in our research. Leaders can only change by doing things differently. The more often they behave in a new way, the sooner they become a new type of leader, an inspirational leader. We know that individual inspiration is the gateway to employee discretionary energy, and that, in turn, is critical to making the most of your scarcest resource — your human capital.
To win in the market, every company must emphasise the specific capabilities that make it better than the competition.
We found that the same is true of leaders: They must be spiky, not well-rounded, and those ‘spikes’ must be relevant to the way that the company creates value.
What do you when a potential client thinks you’re too expensive? If you’ve been in the design business for a while, you’ve likely heard this from potential clients before, “you’re too expensive!” or something to that effect, anyhow.
You’ve got a few options! Here are some handy-dandy email scripts I’ve created that you can copy+paste, and tweak to send to that potential client who thinks you’re too expensive.
Note: These scripts are not intended to be used verbatim, but to be edited to fit your own situation and level of professionalism. Use these scripts as a starting point, but tweak them to work for you!
I realize that this is a large investment, but I can assure you that I am delivering top-notch service that you won’t receive with a low-cost alternative. My clients have seen results such as ____ and ____ because I work with you to really make sure that you’re receiving a design that works for you and your brand. I’m not just creating a _____, I’m helping you achieve your goals.
If you don’t have the funds available at this time, I understand. Please keep me in mind for the future. If you are able and willing to invest at this time, let me know and I’ll tell you the next steps.
You acknowledge the cost of your services, but assure her that you’re offering great work. You explain why you’re qualified to charge the amount that you charge by giving examples of the results that your past clients have seen after working with you. At the end, you give her the option to walk away, but you don’t back down on your pricing, putting the ball in her court.
I realize that this is a large investment, so working with your budget I’ve come up with this alternate option (see attached). You’ll still get a killer website, we’ll just remove some of the bells and whistles for now, so you can stay on-budget. Right now we’ll focus on just the main goals of your website to create something that meets your needs. In this case I’ve removed ____ so we can include ____ which is what will really help you achieve more sales. If you want to add those whistles in down the road, we can schedule another project to do just that!
You acknowledge the cost of your services, but don’t back down from your pricing. Instead, you offer an alternative that meets your client’s main goals (the important stuff!) while removing anything extra that raises the cost, but doesn’t really change the overall effectiveness of the website. For example, if the client is a photographer who wants a custom theme with a killer photo gallery, but can’t afford both, using a pre-made theme (with some tweaks to match her branding) and installing a fantastic gallery that will showcase her work might be the best option. Use your best judgement, and don’t be afraid to discuss what the real priorities of the website are.
I realize that this is a large investment and it sounds like funding isn’t currently available for this project. I completely understand that this is more than you budgeted for, and that working with me right now may not be the best option for you.
If, in the future, funding becomes available, please do not hesitate to reach out so that we can work on your _____ together!
You acknowledge the cost of your services, and you don’t back down. You let her know that if she’s ready to invest in the future, you’re ready to work with her. Staying firm on your pricing tells clients that you are worth what you’re asking.
These scripts are simple, to-the-point, and make it clear you’re not willing to haggle your prices. Standing firm re-enforces the value and expertise you provide. Don’t stress about how to respond, simply copy+paste and tweak one of these templates!
The Pareto principle is a universal truth that can help us recognise where to focus our efforts to be most productive. The basic rule of thumb works like this: 80 percent of results will come from just 20 percent of the action. In other words, roughly 20 percent of your customers will account for 80 percent of your total profits. Likewise, about 20 percent of your daily tasks account for your most important and time-consuming projects. The remaining 80 percent of daily tasks are relatively low-level functions and less important undertakings.
Procrastination often hits us when we’re feeling overwhelmed. We avoid starting a huge project because it feels daunting and we can’t imagine how we’ll tackle it. So stop trying to take on monster-sized jobs.
Break tasks into manageable pieces so you’re just taking on one small task at a time. Make sure your to-do list is broken into tasks that can be accomplished relatively quickly – a half hour or less. Then start using a stopwatch to kick your focus into high gear.
Set a timer for 20 minutes and tell yourself you must stay totally focused until it goes off. You’ll be shocked by how much you can accomplish! And once you’ve finished the allotted time, you may be motivated to keep going – how much more can you do in another 20 minutes?
What time of the day do you have the most energy? When are you most creative? In order to be efficient and make the most of your productivity, you have to know how to manage your energy. You have to understand your body’s natural timetable. Is there a time of day when you always feel in a slump or a time when you feel raring to go? Prioritise important tasks to those times when you know your mind is alert.
It can be annoying when a tantalising thought enters your brain when you’re in the middle of doing something else. “I need to remember to this!” you tell yourself. And then you try to set the thought aside, while simultaneously trying to remember it.
It’s nearly impossible to be hyper-productive if you’re feeling exhausted, hungry or overwhelmed. It’s important that we continue to engage in self-care, even when we’re slammed at work or are feeling overwhelmed with projects. You’re not a machine – you need rest, food and a clear mind to perform well. That means ditching junk food and fast food, and nourishing your body with healthy meals and snacks. It means getting a solid eight hours of sleep at night, exercising during the day and carving out time for mental breaks.
DURBAN – Ithala Development Finance Corporation is looking for female and youth entrepreneurs to join their supplier development programme.
The 12-month programme will help female and youth entrepreneurs to develop and hone their skills set in the construction sector.
Through this programme, the entrepreneurs will learn about construction management, financial management, training on how to complete bid documents and construction regulations amongst other construction-related courses.
Farhana Abdool-Kader, Acting Properties Executive for Ithala said that with the renovation of their northern KwaZulu-Natal properties and future development projects in the pipeline, we want o help 60 fully black-owned, experienced construction businesses become recognised and certified suppliers on our database.
On the reasoning behind choosing just female and youth entrepreneurs for their programme, Ithala said that we find that female and youth companies are still scarce in the construction sector and we are aiming to bridge that gap.
According to Thuli Galelekile, Acting Executive Ithala HR, Marketing and Communications, the development and growth of SMME’s are crucial to the expansion of the KZN economy.
She added that Ithala is looking to create sustainable companies that can create job and other economic opportunities for KZN.
In order for applicants to be eligible for the programme, applicants need to meet strict requirements.
2. The company must provide a letter of motivation for joining the supplier development programme.
4. Have a valid BEE certificate or a sworn affidavit that proves that 100% black youth or female-owned.
7. Employ at least five people.
The companies applying for the programme also need to be registered with the Construction Industry Registration Board.
Applicants should have a grading of 1-3 in one of the classes of General Building; Water Supply, Drainage and Plumbing; Landscaping, Irrigation and Horticulture or Building Electrical Engineering Works. The company should also have a certificate of disease and injuries.
“You cannot get rich if you have short term debts such as credit cards, clothing accounts and overdrafts,” explains Ingram. He continues to say that if you really want to become wealthy, you’ll need to pay off these bad types of debt as quickly as possible. After that you can keep your good debts such as home loan and car debt. Unless you’ve inherited a large amount of money, you will most likely need a loan to buy your first car or house. This isn’t a bad thing.
“Debt can be a wonderful tool for wealth creation if you’re using it to buy assets that will appreciate in value at good growth rate,” reveals Ingram.
Once you’ve eliminated all of your bad debit, you should start building up a cash account that is accessible at short notice, for when disaster strikes. “Try to keep 3-6 months’ worth of your monthly expenses in this account. It’s not an investment and should only be used to pay for emergencies such as a car breakdown or insurance claim,” explains Ingram.
This account will enable you to still pay for emergencies without having to sell investments at the wrong time.
The earlier you start saving the better, but even if you’ve left it until later in your life, you can still benefit from compound interest. The longer your savings has access to a good interest rate, the larger the final amount will be. Starting early enables you to accrue compound interest but starting right now can also impact your financial future.
“Few people in their 20s realise how drastic the impact will be of only starting to save in their 30s. Starting to save at age 35, as opposed to 25, can chop a massive 40% off an investor’s potential retirement benefits. In fact, our research has shown that your first 10 years of investing are even more important than your last 10 years,” explains Jeanette Marais, Director of Retail Distribution and Client Service at Allan Gray.
If you saved R1 000 a month for 10 years (i.e. a total contribution of R120 000), then stopped contributing but continued to invest the money for 30 years, you’d achieve the same total as someone who started 10 years later by contributed R1 000 a month for 30 years (i.e. total contributions of R360 000).
“Younger people can invest all their savings in shares because they have the time to let these investments grow,” explains Ingram. However, if you’re starting to save later in life, you haven’t missed the boat, there is still time to accumulate savings. You’ll most likely need to save a larger amount every month, as well as choosing more aggressive investment options, but the faster you start saving the brighter your future will look.
Once you have these spending habits under control you can use the money you’re saving every month to invest in your future. Here are some investment options for you to choose from.
Now that you’ve reduced your debit and are saving money every month, you can take the next step to building wealth. There is a perception that investing requires large sums of money, but the reality is many investment accounts have very low minimum monthly contributions making it possible for almost everyone to start investing.
Appreciation of value from a stock portfolio, real estate or other assets.
There are of course risks associated with any type of investment, but to mitigate this risk you can diversify your investment portfolio. If you invest all your savings into the shares of a single business, you could lose all your money should that business fold.
On the other hand, if you invested in a single bond in a handful of top performers and one of them declared bankruptcy, you wouldn’t be left with nothing.
Another type of diversification is to ensure you invest across multiple asset classes. This is because conditions that cause one asset class to do well often lead to another to have poor or average returns. Splitting your assets across classes will balance your portfolio.
Various factors influence how you decide on what percentage to invest in each asset class, including your risk tolerance and the amount of time you can invest for.
For example: Shares are considered the riskiest and cash-like investments the least risky. Keep in mind, that the greater the risk the greater the reward, so while shares come with the highest risk, they also have the potential for the greatest returns.
Bonds are less volatile in comparison, but they also help a more modest return, with cash-like investment carrying the smallest risk, but the lowest returns.
Case Study: If you wanted reasonable returns and are comfortable taking some risk, you could choose 80% in shares, 15% in bonds and 5% in cash. Alternatively, if you had a shorter time to invest in and wanted a safer option, you would be better off with a more conservative asset allocation with a smaller percentage invested in shares and more in bonds and cash.
It’s vital that your investments are constantly growing, to ensure they aren’t eroded by inflation. If you consider, at current inflation rates, the value of your money today could halve within 12 years. If your investments don’t at least keep up with inflation, you’ll be going backwards.
If you have 15 -20 years to grow your investments, a good option could be local and global equities. Equities is however the long game, short-term disruptions in the market can cause the share price to fluctuate. Ultimately, if you selected wisely, the share price will reflect the business’ growth in profits, which should be above inflation.
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” – Warren Buffett.
If you’ve left starting an investment portfolio till later in life you can still retire with a healthy nest egg, but you will have a vastly different strategy to someone who has 20-40 years to grow their investment.
Investments typically do require a significantly length of time to develop and grow, which is why the faster you start one the faster your money will grow. “While investing for 150 years is not realistic, backing an investment fund for ten, 20 or even 30 years is practical, particularly if you are investing into a pension for retirement,” explains Nick Train, Lindsell Train Global Equity fund manager.
“Investors should find an investment fund with a strong track record, with a manager whose style they like, invest and then leave their money alone for at least five years.” The longer you invest your money for, the more wealth you’ll build.
There are some easy-to-understand options says Ingram that are low cost and will generate decent growth. A good starting point is to determine your investment goals, such as how long you have to save. The amount of time you have to save will determine which investment options are viable and which aren’t.
Cash is a safe investment. It’s for those who don’t feel comfortable investing their money in anything else, or for those who need access to the money in a relatively short period of time. “It’s far wiser to invest your cash in a money-market or fixed-deposit account at a bank, as these are relatively safe investments,” explains Ingram.
The main disadvantage to cash investments is the low overall return on investment, but if you’re looking to have a rainy-day fund or the security of being able to access your money relatively easily, then cash may be the investment option for you.
As mentioned above banks offer a variety of accounts, from the everyday savings account to call accounts, and money market accounts. You’ll need to determine which one works the best for you.
A savings account won’t earn more than four percent a year, which could be less than inflation resulting in you losing money every year.
Call accounts and money market accounts will offer higher rates but require a higher initial investment.
A 6-month fixed deposit account will offer you a higher return compared to a 32-day flexi account as it’s invested longer. However, if you decide on the 32-day flexi account, you can have your money in just over a month, in case of emergencies.
“When markets are performing well the mantra is often ‘cash is trash’ as there are usually better returns to be had elsewhere,” says Glenn Silverman, Chief Investment Officer at Investment Solutions.
A unit trust pools the contributions from numerous investors, to invest in assets such as shares, bonds or property. This offers investors access to more elusive markets, while increasing your exposure to a range of assets, which are carefully selected and managed by an investment professional.
Investing in a unit trust allows you to save and increase your money with inflation. It also offers you the flexibility of withdrawing your money typically within 48 hours. On the other hand, the minimum required investment can range between R10 000 and R50 000, depending on the fund manager.
Returns can fluctuate anywhere between 6.75% and 8.12%, with charges of around 0.3% for each investment year.
Equity funds: These are the most common type of unit trust. It’s comprised of listed companies based on specific criteria determined by the mandate of the unit trust. For example: You can get equity fund unit trusts that only invest in specific sectors such as construction shares, or a specific type of share, such as large caps.
Balanced funds: This is a portfolio that has a mix of equities, fixed income securities and cash. These are preferred by investors who want to reduce the risk of investing in the major asset classes.
Fixed-Income funds: These unit trusts invest mainly in fixed-income products such as bonds and money market instruments. The aim of this fund is to provide you with a regular source of income. It’s a good option for retirees who need extra cash.
Index funds: This type of unit trust invests in businesses that closely match a specific index. For example, the industrial sector.
International equity funds: This unit trust focuses on offshore companies as opposed to local ones.
Money market funds: This type of fund invests in liquid, low risk money market instruments, such as treasury bills or certificates of deposit. It is an open-ended mutual fund that invests in short-term debt securities.
Real estate investment trusts (REITS): A REIT is a listed company or property unit that invests in immoveable property. This unit trust receives income from rental and pays it through to its investors. It buys, manages and operates the property.
Shariah funds: These are ethical unit trusts that invest into Shariah compliant investments. This excludes businesses involved in activities, products or services related to, for example, gambling and alcoholic beverages.
He goes on to say that you can also invest in a money-market unit trust offered by an investment adviser, but ensure you’re not paying upfront fees. “It’s acceptable for an adviser to earn an annual fee from your unit trust (no more than 0.5% per year on money-market unit trusts), but only if the interest you earn after costs on the unit trust is as good or better than the rate offered by the bank,” advises Ingram.
If you’re looking at a long-term goal, then you can afford to be riskier with your investments. Instead of cash you should look at investing in shares.
“A share is the smallest unit of ownership in a company or unit trust. You can own shares in private companies, and companies that trade on the stock market,” explains Ingram.
Since there’s more risk with shares you can also expect three to four times more growth, which is why you need to invest this money for longer periods of time.
Buy them directly through a stockbroker: This means that you own shares in a business that you selected yourself. “For people who are new to share investing, I generally recommend that they invest in large, well-known businesses that have been in existence for many years. These are sometimes called “blue-chip” shares,” explains Ingram.
Via an exchange-traded fund (ETF): If you have a smaller amount to invest, the cheapest and easiest way is through an ETF. Ingram explains that an ETF trades on the stock market like an ordinary share, but it consists of a basket of shares in various companies. This allows you to buy multiple underlying shares with one investment.
Through an endowment: You invest your money for a minimum of five years or longer. The money you take out when it matures is tax-free.
Through a retirement annuity: This “is basically a personal pension fund. You put away a certain amount of money each month, and when the fund matures at your retirement age, it will pay you out a monthly pension,” explains Ingram.
Even though investing in shares can seem out of reach for most, you can invest as little as R300 a month or with a R1 000 lump sum. However, you need to be aware that if you opt for the monthly option you could be charged an annual fee of up to 1%.
When buying shares, you should use your knowledge of the industry you’re in. For example, if you have worked in the manufacturing industry for many years, you might have good insights into that industry. You will still need to research the companies you’re looking at, as you need to be certain of what you’re buying.
“Bonds are tradable debt instruments whereby a government, state-owned enterprise or corporate raises capital by selling bonds into the market,” explains Simon Brown is the founder and director of JustOneLap.com, independent trading company.
You lend R1 000 to your friend. You agree that he will pay back the money after five years and will pay you 6% interest per annum. You will receive R60 a year in interest and at the end of five years, your R1 000.
If the bank savings rate is lower than the interest you’re charging, then you’re earning a high return. This is where the risk comes in, if the bank increases its interest rate to 7% then you’re losing 1% a year on your investment.
You can then sell the bond to a third person at a slightly discounted price of R950. This third person is still scoring because they’re now receiving R60 a year on only R950 (6.3%), plus he gets R1 000 at the end of five years.
On the other hand, if the reverse happens and the bank rate goes down to 4% you can sell your bond to a third person at R1 100. You’ll make an immediate R100, and the third party will be happy because he’s getting a return of 5.4%, which is better than he’d get at the bank.
On price: By trading them over the short term, for example, buying low and selling high.
On yield: This is more of a long-term investment.
Bonds are typically issued in large amounts such as R1 million making them inaccessible to most individual investors. However, institutional investors such as life assurance companies and retirement funds, use them extensively, which is why you’re probably indirectly investing in them.
“However, we have had a few local exchange-traded funds (ETFs) issued over local bonds, tracking government and inflation-linked government bonds,” reveals Brown.
He continues by saying that South Africa is also getting a new Stanlib bond ETF tracking the “FTSE Group-of-7 (G7) Index”. This will focus on developed markets only while the former includes a small weighting of emerging-market bonds such as those belonging to South Africa.
Investing in property is often seen as a safe, less volatile choice as it requires a long-term approach. Although, this type of investment isn’t without risk, there could be a market or area dip, or an interest rate hike, but it’s still one of the best investment option as people always need a place to stay.
Primary property investment: This is the process of buying and owning your home. Numerous property buyers apply for a home loan to purchase their first home. Over time, your property should appreciate, which will put you in a favourable financial position.
Buy-to-let investment: This is when you purchase a property with the express intention of renting it out. To ensure ongoing profits you’ll need to determine the best area and type of property to buy, and potential tenants need to be thoroughly vetted. Once paid off the profit can increase significantly, and the property should also increase in value, putting you in a strong financial position.
Offshore buy-to-let investment: Investing in buy-to-let property offshore can effectively create a buffer against economic or socio-political headwinds. You can earn in a foreign, most likely stronger currency, and possibly even gain citizenship through incentive programmes. Be aware that you should employ a reliable and efficient offshore property management service to ensure the success of your property.
Listed property fund: Local and offshore listed property funds give investors access to the benefits of owning property without having to deal with a physical building. “It gives an individual the opportunity to invest in a range of properties through the purchase of stock. Property funds buy you a stake in real estate companies listed on the Johannesburg Stock Exchange (JSE) – saving you the headache of maintaining property and dealing with dodgy tenants,” explains Fayyaz Mottiar, Fund Manager of the Absa Property Equity Fund.
“For a small investor, a buy-to-let property comes with a concentration of risk. You are spending a huge amount of money on one single asset and if the tenant goes wrong, you take a big financial knock,” explains John Loos, household and property sector strategist at FNB Home Loans.
“Accept that property is always a long-term investment with ups-and-downs. If you are out for a quick buck, you won’t find it in property.
“Set yourself the goal of building up a property portfolio which you’ll steadily expand. Don’t sell your investment property, even to buy another.
“Don’t rush this process. Avoid buying numerous highly bonded properties consecutively. Rather buy one, set it up nicely, before you move on to the next.
“Try to invest in both freehold and sectional title residential property, and small commercial and industrial units.
“Accept that your own home is part of your portfolio. Too often, as salaries increase, so does the desire for a bigger and better home, resulting in huge bond repayments having to be paid. Rather have a moderate home and save by having a small bond here and use the spare cash to buy elsewhere where you will earn rent.
“Property truly gives you the best of all worlds as you get to enjoy it while living there, enjoy rental income if you choose to let, the satisfaction knowing it’s yours, and only yours, once paid off, and of course the reward of knowing you have something to leave behind for your children someday,” says Craig Hutchison, CEO Engel & Völkers Southern Africa.
“Find a practice which is willing to invest in you now and partner with you for life. Every successful investor began their journey with one small investment,” explains Sue Torr, managing director at Crue Invest.
“Every South African knows that Cape Town property growth will be more attractive than property yields in smaller towns up-country. So geographical location must be taken into account,” says Jan Vlok, a research and investment analyst at Glacier by Sanlam.