Guide: Leadership

Leadership is, of course, a critical element in determining a business’s success due to the decision-making power the leadership team has, but also due to the huge influence, positive or negative, that a leadership team has on everyone below them. This is why of all the different leadership styles, leading by example is a mandatory one.

Strategic initiatives rarely succeed unless they have the full operational support of the leader(s). This includes the CEO/MD/GM, all significant shareholders, the executive leadership team, and the governance team as well e.g. advisors, advisory board, formal board.

Even the most talented teams will be dysfunctional without great leadership to guide them.

1. Leadership roles

The fundamental first step of leadership is that it’s clear to everyone who the leaders are, what they do, and what they don’t do.

Who?

In most businesses, there is a very clear leader who is commonly the founder, majority shareholder, calls most of the shots and carries the title of CEO, MD, or GM. However, in some businesses, this is not so clear and can lead to leadership dysfunction, especially in partnerships with two or more owner-operators.

A dual-leadership approach can work, but is hard and rare. Generally, it is better to have a single, central leader like we see with almost every successful sports team or government. In a partnership, this often means appointing one person as the top leader, and the other a leader within a particular subset of the business beneath them e.g. product development or sales. This does give the primary business leader more power with decision- making. At the board level, however, the partners can enter as equal shareholders carrying the same voting weight.

Once your business is large enough e.g. more than can fit in one meeting room, it can also be very helpful to form a second-tier “leadership team” to support that central leader. This is commonly made up of department heads from areas like sales, marketing, finance, and production.

What?

With the “who” sorted, the other aspect of leadership roles is the “what?”

It is common for leaders to step into too many areas of decision-making within the business, and actually end up making it less effective. The simple solution to this is that the leader(s) must also have a job description and KPI’s (Key Performance Indicators) that very clearly outlines what they do and how their performance will be measured. This makes it very easy to also draw a line across what they don’t do, to ensure they don’t encroach on others areas of responsibility.

Ideally, leaders should also get a performance review like all staff – either from the board, or a 360-degree review from staff.

2. Ability to translate vision

This is about how well those leaders understand and execute both the soft and hard elements required to make the vision a reality (AKA: human vs. commercial, emotional vs. functional).

It is not enough to simply have a great idea or great purpose or great project lead alone. To succeed, the leader(s) must be able to map high-level ideas to the specific elements required to make it a reality. Since this covers almost every business discipline there is, this can only be driven from the top by those that have the control over the entire business. The greatest idea will not succeed if the leader lacks the required skills, skips or rushes steps, or struggles to communicate, delegate and motivate.

3. Leadership inspiration

This is all about how much energy a leader engenders in their staff to work towards the businesses vision. Motivation doesn’t have to come from the leader, but it is best if the leader can instil this in their troops when needed.

Both extroverted and introverted leaders are equally able to motivate their staff e.g. Brendon McCullum vs. Kane Williamson. What differs is the style they use to achieve that e.g. 1:1’s or team pep-rallies, quiet words or epic speeches. While you can achieve some wins behind email, ultimately motivation means getting out face to face beyond the desk and engaging, empathising with, and energising staff.

4. Leadership discipline

This could almost have been added as a fourth key element of culture, but unlike atmosphere, productivity, and creativity, discipline can only ever be achieved if it comes from the top down.

One of the biggest mistakes businesses make is trying to do too much, or sometimes even trying to do everything (especially true for smaller businesses with limited resources). Prioritisation is essential in every business but that doesn’t mean just ordering everything from A to Z. You need to go a step further and move some of those items to a “Not-to-do” list.

Disciplined businesses have clear objectives and don’t allow distractions to slow progress (Netflix calls these distractions “barnacles”). They have a lot of great structure in place, starting with a clear vision and clear priorities for all staff. They don’t tolerate procrastination. Leading their teams through disciplined processes like this strategy program, or the “Key steps to LASTING change” (presented earlier in the supplementary information) is also crucial. Ultimately, disciplined businesses do the right things, not everything, and they do them in the right order too.

5. Leadership awareness

Great leaders have the ability to step outside of the business in order to gauge its true performance, as well as be acutely aware of their own weaknesses.

They confront the brutal facts when needed, which includes recruiting or training people to complement their strengths and shortcomings. They don’t necessarily have to be well-rounded characters themselves.

Leaders with high awareness are impartial and rational thinkers when the situation requires it. Because they are great observers and listeners, there is very little that they don’t see.
In contrast, leaders with poor awareness bring a lot of bias and emotion into business decisions, and can often miss the obvious. They are the type of leader who won’t acknowledge bad results until it’s too late. They are also prone to recruiting people just like themselves, rather than the opposite to complement their weaknesses.

6. Leadership openness

We all know people who are open-minded, and people who are stubborn. Stubborn leaders are significantly more likely to fail. It’s that simple. They will hold onto ideas, old ways of thinking, and control for far too long and to the detriment of the business.

For anyone who struggles to take suggestions on board, it’s important to remember that everything in business is just business, it’s not personal, and all that matters is the result for the business. Remember as well that you’re all on the same team and the enemy is on the outside.

Great leaders have a global outlook, are open to advice, and are champions for change as they know that change is inevitable. They are impartial and willing to experiment. They are also willing to let go of the reigns if that is in the best interests of the business.

7. Governance

It is important to think about governance in relation to the strategic direction that you are about to pursue:

• Is the current level of governance right for the business moving forward?
• Do you have the right people on-board this governance team?

“You need to be aware of what others are doing, applaud their efforts, acknowledge their successes, and encourage them in their pursuits. When we all help one another, everybody wins.” JIM STOVALL (BLIND AUTHOR AND ACTIVIST)

Bitnami