Beacon colleges shine alongside the best of the world’s industry when it comes to the quality of leadership. Rolls-Royce Motor Cars and Microsoft would be hard-pressed to outdo the likes of Bridgwater, Guildford and Lewisham colleges for the levels of staff motivation and achievement.

In fact, when it comes to deploying the full range of leadership styles to meet unexpected demands or problems, the business world has much to learn from the colleges.

Directors of the Hay Group of consultants who drew these conclusions from a survey, published today, suggest that industry and commerce could be in for a “culture shock”. As colleges strive to be more business-like and businesses try to turn themselves into learning organisations for the age of information, the colleges are getting there first.

“Beacon” is a term that ministers unashamedly filched from the Association of Colleges’ award scheme to denote a particular type of excellence. In this case it goes to colleges which achieve a grade 1 or 2 in leadership and management.

The Hay study compared behaviour of leaders, their styles, the organisational climate they foster and the impact on performance in 32 top businesses, 13 beacon colleges and 314 mainstream colleges.

It revealed that principals of the best colleges used a wider range of leadership styles than the strongest business leaders and excelled in being more adaptable and flexible. Hay identified six styles (see box below) that were necessary regardless of the sector, bureaucracy, rising expectations, poor pay or demands for constant change.

Good leaders make a difference whatever the odds, the study says. They move among the styles to suit changing needs and, under stress, do not simply revert to the styles they find most comfortable.

What makes the difference between a good and poor leader is not their skills and knowledge or the ability to write a good strategic plan but their behaviour - how they communicate the plans.

Leaders judged “good to outstanding” in the study had a high degree of this “emotional intelligence” said Mike Stanton, director of the Hay Group.

“Successful leadership is as much about personal conviction and self-awareness as it is about resources, policy constraints and cultural factors.”

The study results highlight the extent to which the current crisis over red tape and paperwork is partly about leadership and partly about the breakdown in trust, not only between the learning and skills councils and colleges but between management and staff.

“We found that outstanding leaders in both the further education and private sector were in tune with their employees’ opinions and were able to influence employee perceptions about bureaucracy, obstruction and red tape,” Mr Stanton said.

The report of the study shows strong links between the “climate” of a college and its success in inspections, efforts to cut student drop-out rates and measures to attract more funding. In all the most successful colleges and companies observed in the study, leadership had an “enduring” impact.

“It is not just about the chief executive setting strategy or making the right decisions, but about motivating and engaging staff, about developing their willingness and ability to make decisions,” he said.

Beacon college leaders were better than mainstream colleges at mitigating the effects of bureaucracy - people did not feel the work was unnecessary - and had a clearer understanding of the ideals and aspirations of their staff.

To assess how well principals used different leadership styles and created good working climates, the Hay group asked leaders to judge themselves on a six-point scale and set this against a similar analysis of the views of their staff. The judgments of leaders and their staff correlated most closely in the beacon colleges.

The study was not only about identifying weaknesses but seeking solutions, said Mr Stanton. He urged mainstream colleges to concentrate more on “communicating standards and clarity of vision” if they were to achieve the levels of motivation found in beacons.

One of the key weaknesses in both beacon and mainstream colleges was the failure to give adequate reward for high staff performance.

Commenting on the findings, Sue Dutton, deputy chief executive of the AoC, said: “This report shows an understanding of where the strengths are in the sector and an honest interpretation of where things might improve.

“This is a new type of survey that for the first time confirms what we thought for many years. People working with good leaders in colleges have long believed that they compare favourably with the outside world.”