Research behind the scenes at one of Australia’s most innovative businesses has shown that strong leadership is key to driving growth.
Medium-sized businesses are the unsung heroes of the Australian economy, and strong leadership is a common denominator in their success. But what makes a good leader?
A research project has aimed to answer this question putting the spotlight on the team behind one of Australia’s most innovative companies. Nightlife Music is credited with solving the worldwide problem of how to play music in a public space and pay the artist at the same time.
Based in Brisbane, Nightlife employs over 120 staff and was voted one of the top 50 innovative companies in Australia and New Zealand for 2017 (The Australian Financial Review) – the first and only music company to be awarded the accolade.
The company started almost 30 years ago when Mark Brownlee and Tim de Souza, both engineers and budding DJs, set out to resolve their frustration at a lack of music choice on a night out. Since then it has snaked a long list of next-generation solutions; from Australia’s first video jukebox to the latest, an in-venue music request app called crowdDJ®.
Sharon Forrest has been friends with the two founders for over 25 years and has watched the company go from strength to strength. When she started a research project to study the principle of wise leadership as part of her Master of Business qualification, she knew exactly where to look. The Nightlife team welcomed the project as an opportunity to reflect on their approach as they prepare to take their business global.
“I met Mark not long after they moved the business from their garage to an office, so it has been an incredible journey to watch their growth and innovation,” Sharon explains. “Mark reminds me of Steve Jobs – he is a great visionary. He has unwavering principles and values that he lives and works by and a philosophy of making sure staff are happy and have career paths to strive towards, which is why this research was so important to him.
“He recognises the skills that he lacks and builds his team accordingly. Mark’s greatest challenge has always been convincing other people of his way forward, as often he goes against what the norm is in the business world – but I think that is what has made him so successful.
“The culture within Nightlife is a reflection of the commitment from the founders, mainly due to visionary thinking and always understanding their customers’ needs even before they needed them. Secondly, and perhaps more importantly, the staff’s welfare has always been front of mind creating a mindset of sustainability right from the beginning.”
To ensure the objectivity of her study, Sharon surveyed staff and management separately. She was interested to know what factors helped to make this organisation successful, adaptable, and primed to move to a potential global reach.
Three variables were found to be significant in explaining an organisations success. Firstly, there was a high level of leader-member exchange, which means that leaders treat their staff in a collective way by giving them greater responsibility and more attention, and sharing information. As a result, staff are more motivated, more communicative, and achieve higher productivity. Mark and Tim created a five-member executive team with relatively equal power, each of whom maintain close relationships with their whole team.
Unsurprisingly, the second variable was a very high level of job satisfaction, which was evaluated by an individual's positive attitude about work and their emotional and intellectual satisfaction. According to Associate Professor Bernard McKenna, Sharon’s supervisor at UQ Business School, Nightlife provides a good example of Person-Environment fit. “Organisations with good P-E fit allow people to create environments that allow them to behave in a way that suits their traits, and both the person and environment adapt to each other,” he said. “This is particularly important for Nightlife because they have a range of skills from software development to sales and marketing.”
The third variable was to assess the wisdom of the management team using a valid self-report survey instrument. The leadership team showed particular aptitude in emotional regulation, which involves being able to remain calm in adversity and also to understand other people’s emotional states. They also rated well on experience. “A wise person uses their experience to reflect on the ups and downs of life. This provides the balance needed to handle turbulence and change,” adds Bernard.
Nightlife co-founder Mark Brownlee said: “We felt we were doing the right thing as a business connected to its workforce, but Sharon’s analysis has reassured us that our leader-membership engagement has us on the right track.
“It is especially important as we recently announced plans to take our business global. To do that successfully, it’s vital we assign as much importance to our values, culture and knowledge-based skills as to our tangible product.”