Dick Smith's Transformational Leadership and Business Success

Introduction: Leadership and Transformational Style

Leadership has always been at the forefront of business studies. Leaders are always — or should always be — concerned with how they can stimulate the best performance in the workforce in order to achieve the best results and stability for their business. Among the various types of leadership, transformational leadership encompasses actions that are charismatic, visionary, and inspirational. These actions inspire followers to deliver not only their best, but to strive beyond it. Followers under such leadership are so inspired that they do not merely meet the expectations and demands of their duties, but perform beyond them (Qu, Janssen, and Shi, 2015).

Business success is often dependent upon leadership that can inspire workers to perform beyond what they consider to be their best. As such, charisma is an important part of leadership. A charismatic leader offers an inspirational and energetic embodiment of the values and ethics inherent in a company. This is what Dick Smith has accomplished.

Factors Behind Dick Smith's Business Success

Dick Smith's business success can be attributed to various factors, including his personal values and business ethics. His strong sense of personal values is reflected in his business dealings, creating a unified vision grounded in gratitude and service to others. These values have been part of his basic ethical outlook since childhood, and they are combined with the business values of hard work and freedom of speech. In practice, this means he has dealt with employees and associates on the basis of mutual respect and open communication. The ability to both raise ideas and listen to those of others has made a significant contribution to his success and his charisma as a leader.

This is consistent with research evidence presented by Peus et al. (2010, p. 196), which found that successful companies have specific cultural variables that contribute to their success. These variables are specifically related to leadership involvement in employee communication and satisfaction. The authors found, in particular, that corporations that value ideals such as corporate citizenship and responsibility tend to be more successful than those that do not. Part of this responsibility includes employee relationships, such as an active concern with job satisfaction and encouraging competence among employees and within the company as a whole.

Dick Smith is specifically concerned with using his values to drive business success. His focus on honesty and transparency are particular factors that have driven his achievements, as he acknowledges the importance of a good public image in a competitive market. Indeed, few things are as damaging to a corporation's image as non-transparent behavior that comes to light after a company's downfall. Enron is perhaps the most well-known example of this. Another example is AIG, as cited by Ferrell, Fraedrich, and Ferrell (2013, p. 368). After AIG's demise and resurgence, its first responsibility was repairing its damaged corporate image — the result of non-transparent activities in the past. The authors suggest that the most effective way to do this was to become more transparent in terms of finances. This is something Dick Smith implemented from the outset; hence, there is no need for damage control, even in the event of failure.

Another success factor is his focus on the Australian community, through which he has been able to link his business vision with the values held most dear by a large portion of that community. As noted by Boehm et al. (2014), this is an important factor, particularly in the increasingly globalized business environment. By concentrating his attention on his national community, Smith has broken the mold somewhat, since most businesses today focus on expansion. Although this has earned him some criticism from the broader business community, Smith has taken it in stride. Nonetheless, Smith demonstrates cultural competence by aligning his vision and values with those of the Australian market — an important factor in business regardless of one's specific environment.

Another important factor in successful leadership is reducing employee turnover. According to Hamstra et al. (2011), when employees willingly remain in their organization, this contributes to stability and effectiveness. With his charismatic and transformational leadership style, Dick Smith can be seen as successful in business partly because of how effectively his leadership style promotes employee satisfaction, inspiring workers to strive beyond what they believe possible.

Attributes of Dick Smith's Charisma

Various factors contribute to Dick Smith's charisma. One of these is his manner of speech: he is highly emotive, self-confident, and articulate. These three qualities make him attractive to listeners, allowing him to inspire belief in what he considers important and to move listeners to act on those beliefs. He is able to articulate his thoughts and feelings in such a way that listeners pay close attention — a quality typical of the charismatic leader.

As a leader, Smith uses this charisma to further both his own and the company's values, placing particular emphasis on honesty and social responsibility, and encouraging these qualities in those with whom he works. As a concrete demonstration of this value, one-third of the profits from Dick Smith Foods is donated to charity.

Another aspect of Smith's charisma is his ability not only to lead, but also to affiliate with others in the business environment. This creates a type of "ecosystem" analogous to the "knowledge ecosystems" described by Clarysse et al. (2014, p. 3). Through his charisma, Smith is able to relate and negotiate effectively with business partners, forming partnerships that are mutually beneficial in accordance with his personal and professional values.

Conclusion

In conclusion, charismatic, transformational leadership has been central to Dick Smith's business success. Despite his critics, he has made a remarkable success of most of his business endeavors. Taking occasional setbacks in stride, he has never lost his devotion to his work, his values, or the people he serves. By consistently adhering to the values he holds important, Smith has succeeded in avoiding the common pitfalls of today's business environment — an environment in which fraudulent activity and self-serving behavior can seem all too tempting.

Smith stands as a genuine example of what is possible when a person relies simply on the ability to conduct honest business and to inspire those around them. It is little wonder that he has earned admiration not only among his followers, but among fellow leaders as well.

References

Boehm, S.A., Dwertmann, D.J.G., Bruch, H., and Shamir, B. (2014). The missing link? Investigating organizational identity strength and transformational leadership climate as mechanisms that connect CEO charisma with firm performance. The Leadership Quarterly.

Breevaart, K., Bakker, A., Hetland, J., Demerouti, E., Olsen, O.K., and Espevik, R. (2014). Daily transactional and transformational leadership and daily employee engagement. Journal of Occupational and Organizational Psychology, 87.

Clarysse, B., Wright, M., Bruneel, J., and Mahajan, A. (2014, August). Creating value in ecosystems: Crossing the chasm between knowledge and business ecosystems. ERC Research Paper No. 22.

Ferrell, O.C., Fraedrich, J., and Ferrell, L. (2013). Business Ethics: Ethical Decision Making and Cases. Mason, OH: South-Western Cengage Learning.

Hamstra, M.R.W., Van Yperen, N.W., Wisse, B., and Sassenberg, K. (2011). Transformational-transactional leadership styles and followers' regulatory focus: Fit reduces followers' turnover intentions. Journal of Personnel Psychology, 10(4).

Livermore, D. (2015). Leading with Cultural Intelligence: The Real Secret to Success. New York: American Management Association.

Peus, C., Kerschreiter, R., Traut-Mattausch, E., and Frey, D. (2010). Ethics and economic success: Do they contradict each other or belong together? Journal of Psychology, 218(4).

Qu, R., Janssen, O., and Shi, K. (2015). Transformational leadership and follower creativity: The mediating role of follower relational identification and the moderating role of leader creativity expectations. The Leadership Quarterly.