Toxic leadership ‘fuelling’ Australian businesses as one in three inadvertently lead with fear, causing $2.3 billion productivity loss

Expert urges leaders to acknowledge the subtle yet corrosive ways fear manifests: reducing performance, creating friction in interactions and diminishing psychological safety in work environments.

People can be motivated by a range of emotions, and a key one is driving corporate managers in today’s workplaces — fear.

A new study conducted and released today by Margot Faraci, a leading management expert and prominent senior leader in Australia with over 20 years experience at Macquarie Bank, NAB, CBA and more, shows toxic leadership is fuelling thousands of Australian businesses, with one in three (27%) harbouring unconscious fear.

A third of corporate managers are primarily motivated by fear, creating less efficient and less psychologically safe work environments that cost $2.3 billion annually in lost productivity. It’s a matter that goes beyond statistics; it touches the very core of leadership dynamics.

Fearful leaders in Australia lose an estimated $26,263 in a year (based on their salary and estimated hours lost), equaling a $2.3 billion cost in productivity across Australia.

Concerningly, seven in 10 (69%) of managers firmly believe stress and fear can be used as a positive or motivational tool, despite acknowledging its adverse effects on performance, well-being, and company culture.

The findings are part of a global study by Margot Faraci which analysed the leadership behaviours of 2,500 managers in Australia, the UK, and US, in order to map and uncover unconscious fear in leadership. The challenge is that thousands of leaders are often unaware they’re leading with fear or coming from a fearful response.

Expert urges leaders to acknowledge the subtle yet corrosive ways fear manifests: reducing performance, creating friction in interactions and diminishing psychological safety in work environments.

Fearful leadership isn’t just shouting or aggressive behaviour, it’s avoidance, complacency, decision fatigue, hesitancy to express viewpoints, fear of letting people down, micromanagement, reluctance to provide feedback, not creating space for others to speak up, holding back growth opportunities from others, and more.

Fearful leadership often stems from inexperience and low self-confidence, leading to increased stress, fatigue, and compromised decision-making. It’s also often attributed to past experiences, creating an ongoing cycle of leadership driven by fear.

Key findings also include:

• 69% of fearful leaders in Australia firmly believe that stress can be positively harnessed in workplaces
• 87% of fearful leaders in Australia regularly witness declines in team productivity due to toxic leadership
• While the vast majority of leaders offer guidance and learning opportunities, fearful leaders are significantly more likely to either be fully hands-on or hands-off when it comes to trusting their direct reports.
• Half (49%) of fearful leaders in Australia struggle with decision fatigue
• Nearly two in five (38%) of fearful leaders regularly witness declines in team morale, half (51%) are unhappy with their job, and a quarter (23%) say workplace relationships are strained
• A third (36%) of fearful leaders admit how showing compassion in the workplace can positively impact company culture, and nearly half (42%) admit it will positively impact productivity, yet fail to do so
• Fearful leaders tend to shift the blame, believing management is at fault for declining productivity, largely due to micromanagement and lack of communication

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OMBUDSMAN APPLAUDS CYBER SUPPORT FOR SMALL BUSINESS

Australian Small Business and Family Enterprise Ombudsman

New support announced today by the Australian Government to help small businesses combat cyber attacks is extremely welcome, says the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson.

“One of the biggest fears a small business has is that they will be targeted and wiped out by a cyber attack and we are pleased our strong advocacy for greater sector-wide support has been heard,” Mr Billson said.

“The latest chilling report from the Australian Cyber Security Centre is that a cyber attack happens every six minutes and when a small business is hit, on average they suffer a financial loss of $46,000.

“Some never recover from the assault on their operations and their reputation and today’s announcement offers practical help to minimise the chance of being a victim and better prepare small businesses to bounce back.

“These announcements will provide the type of concierge-style support we have advocated for to assist small business to be as prepared as they can be by providing a free check on their readiness and then advice on actual practical steps that can be taken to further strengthen their business.

“This will include one-to-one support in the event of an attack to help a small business rebound and recover.”

Mr Billson said small business would greatly appreciate the two programs announced by Small Business Minister Julie Collins and Cyber Security Minister Clare O’Neil.

Under the announcements, $7.2 million will create a voluntary cyber health check program to allow businesses to undertake a free, tailored self-assessment of their cyber security maturity and determine the strength of their cyber security measures with educational tools and materials they may need to upskill. Those with a high-risk exposure will be able to access a more sophisticated, third-party assessment to provide additional security across national supply chains.

New support announced today by the Australian Government to help small businesses combat cyber attacks is extremely welcome

A further $11 million will be spent on the Small Business Cyber Resilience Service to provide one-on-one assistance to help small businesses navigate their cyber challenges, including walking them through the steps to recover from a cyber attack.

“Small businesses can’t hope to have the same sophisticated resources and teams of cyber experts as larger companies who still fall victim to ever more sophisticated attacks,” Mr Billson said.

“Small and family businesses are sadly a preferred target for some of the scammers and cyber-criminals and these new programs will give small business greater confidence they are not alone.

“The most prominent type of attack is a cyber-criminal will tap into a small businesses email system, intercept an invoice that’s going out from the business and put in some different bank account details.

“The unsuspecting customer is expecting the bill and probably knows the amount they have to pay so when it arrives they just settle that account.

“However, the money goes to some joker on the other side of the world, is quickly converted into crypto currency and is gone.

“Other attacks involve phishing scams, where a small business receives an email that looks okay, but it allows entry into their digital infrastructure and the criminals demand a payment for to access your own information.”

Mr Billson said there are simple steps a small business can take right now including having multi-factor authentication, sophisticated passwords or pass phrases, making sure not everybody’s got full access to all parts of your technology, having secure backups of critical data and checking with the Cyber Security Centre at www.cyber.gov.au

Mr Billson said that the voluntary cyber health check program, as well as third-party assessments and assistance, should be built into a new right-sized privacy compliance framework for small business, given the government’s decision to remove the small business exemption from the Privacy Act.

“Incorporating cyber-security guidance and Consumer Data Right rules into actionable steps for small businesses to meet their privacy obligations will help protect small businesses, reduce compliance burdens and address priority privacy concerns for individuals,” Mr Billson said.

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About to do his final crumb

By Samantha Elley

A recent parking fine may be the final straw for businessman Bob Worling.

The owner of Kibbles Bakery in Walker Street, Casino has threatened that his business is on the verge of closure after 46 years of selling bread in the CBD.

“It’s getting to a point with the council where they seem to want to disrupt business,” said Bob.

“We know the cost of living is a struggle but (Richmond Valley Council) are making things more difficult.”

Bob Working in Kibbles Bakery.

Bob is referring to the recent difficulties with the closure of the Casino Livestock Exchange where the associated custom has moved to Lismore.

Even more recently, Bob has been advised that he now has to register his grease trap at $250 a year.

“My viewpoint is that they have lost money on the saleyards, so are trying to get it from anywhere else,” he said.

“I got my grease trap put in 12 years ago and never had to pay to register it before.”

the offending laneway.

Richmond Valley Council said cross-subsidisation of rate payers money supporting council business was not to happen, as stated in their ordinary council meeting of September 19, 2023:

“While it is usual local government practice for ratepayers to share the cost of operating community facilities provided for the social and physical wellbeing of residents, such as libraries, community halls, sports fields, parks and swimming pools, cross-subsidisation of business activities from general rate revenue should not occur.”

And now Bob has had to deal with a parking fine of $300 from one of his staff, who had stopped to load crates of loaves to deliver to customers.

Bob Working in Kibbles Bakery.

No Stopping signs in the laneway beside the bakery, had forced Bob to take and send deliveries at the back entrance.

“She had stopped in the side lane way, next to the bakery, to get the crates, so she hadn’t parked, but was loading the bread,” he said.

Bob said he has written to and visited council to plead his case but had been unable to speak to the mayor or general manager.

“(They) are forcing me in to a situation where there will be no bakery in the main street of Casino,” he said.

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