Being a good leader is especially important today because most employees decide whether to stay at a job based on their feelings about the company and its people. I myself left a well-compensated corporate role after nine years. My then-boss tried to motivate our team with sales contests, but the winner’s prize was lunch with him. I always asked, “What’s second prize, two lunches with you?” I didn’t want to work for him anymore, so I left to join an entrepreneur I admired.
Most business owners never receive training in leadership development. I was fortunate that when I was promoted to manager, they sent me to a comprehensive management training program, where I learned the leadership skills I would need to be an effective manager. Very few people managers ever get this type of professional training, and instead have to learn on the job.
There are many viable leadership styles. Whatever yours is, these five skills can improve your effectiveness:
1. Setting vision and mission
People want to be part of a cause that’s bigger than them. On the job, team members will work harder for a mission — and for each other — than just a paycheck. The business owner may tell their team what to do next, but key leadership qualities begin with a vision that’s larger than any single person. A vision statement describes the desired future position of the company and the difference the company will make in the lives of their customers. A mission statement defines the business, its primary objectives and its unique approach to reaching those goals.
Think about why you got into your business, beyond a desire to make money or be your own boss.
This vision can inspire team collaboration toward company goals that no one could achieve by themselves. As you articulate a vision or mission statement, make sure you dig deeper than “We sell this really good stuff to our customers.”
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Ask five employees what they think the vision or mission of your company is. If you get five different answers — or blank stares — you have a problem. Think about why you got into your business, beyond a desire to make money or be your own boss. You probably wanted to help people solve a particular problem and make a difference in the marketplace. Ask your customers why they choose to do business with your company.
When I started my current venture as a consultant, my mission was to help get small businesses “unstuck.” I embarked on this journey because after having many of my own companies and talking with thousands of business owners, I realized that most of them hadn’t realized their full potential and were stuck — mainly in the areas of sales, marketing, leadership and money.
The final test of your stated vision is always this: Would you and your team members voluntarily use a mug or wear a shirt with that vision statement on it?
By definition, a successful business owner makes a profit from other team members’ work. This necessitates that the leader successfully delegate certain tasks to their staff.
When a team member comes to you with a work issue, your natural reaction might be to fix the problem yourself, because you think you do the job faster or better. That might be true in the moment, but it doesn’t allow you the leverage you need to build a business, since you alone end up doing all the critical work. Remember, a company has more long-term value if the operations don’t revolve solely around you.
A company has more long-term value if the operations don’t revolve solely around you.
To get started, structure an organization that provides training and real decision-making power to team members. Schedule time with staff to address their problems so that they can eventually handle these issues with minimal input from you. Now, when they come to you with a problem, they’ll also be able to bring a proposed solution, or at least ideas for a solution they can execute independently.
3. Strategy and execution
No one wants to be micromanaged. An effective leader’s goal is to articulate the business goals and strategies, get agreement from the staff and then let them execute how they see fit.
As the leader, you might say what you think needs to be done, but the team should decide how the task is executed.
An effective leader doesn’t keep strict control over the flow of information or all the company resources; communication should not be one-way from you to your employees. An effective leader openly shares information and any knowledge that can help their team; they encourage new ideas and discussions. You can also delegate efficiently by asking managers to deliver actionable information to their respective teams.
To get started, encourage employees to make their own decisions when it comes to execution of business goals and strategies. As the leader, you might say what you think needs to be done, but the team should decide how the task is executed. If you want your company to offer better customer experience, for example, survey your customer-facing team members to discover tactics your business can use by drafting a customer journey map. This will show you all the important touch points during customers’ interactions with your company. Periodically review these suggested tactics, their implementation and their success to foster team accountability.
4. Team building
Small business owners typically hire new team members based on the experience on their resume. But this isn’t an effective way to find employees that will thrive at your company. Instead, leaders need to hire people that fit into the company culture and support its goals. You might think you don’t have a company culture, but if you’re not setting the culture, your employees are.
Even if you have all the financial capital you need, without a solid company culture, your business won’t maximize its success. You need a unifying vision or mission that will keep the team together during difficult times, such as leadership and market changes. Southwest Airlines, for example, has an outstanding culture. When I fly Southwest, it has a happier and more friendly feel than other trips. Flight attendants joke with each other during boarding. You can tell they care about the passengers and their coworkers. They wear fun flare pins on their uniforms. The captain comes out to greet each passenger as they get off the plane. And this culture is something all Southwest employees can contribute to.
You might think you don’t have a company culture, but if you’re not setting the culture, your employees are.
When it comes to your business, start by assessing your current company culture to make sure it reflected your stated vision and mission. To me, role modeling is critical to business success. What does this look like? Celebrate team members’ actions and accomplishments inside the business that align with your culture. Highlight real stories from customers or team members that exemplify what you stand for. Use the tough moments or decisions to demonstrate how you uphold your values.
5. Hiring and evaluating talent
Hiring is hard, and it can be tempting to just want to “fill seats,” rushing to hire people because work is piling up in the near-term, not considering whether someone will be a good fit long-term. On the flip side, many small business owners are too slow to fire team members who can’t do the job, rationalizing that “the devil you know is better than the devil you don’t.”
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Start by choosing the person who offers the best fit for your company culture, not just relevant experience. This often comes easier through referrals from people your staff already knows, i.e., people who are likely similar to them. Ask job candidates to provide examples of how they share your company values. In a second interview, have them go out to lunch with existing team members. Then solicit these team members’ feedback on how the prospective hire might fit in at your company.
If asked, every employee could probably name the worst-performing person on their team. Chances are the group would name the same one or two people. Ask yourself: Who do you just cringe at giving an important task to? Or, who do you cringe at when you think of how much you are paying them? Figure out who you’re paying more than the value they bring to the company. If they’ve already had extensive job training, it’s unlikely they’re still going to improve. Accept that and find someone who will do their job better. Yes, it’s hard to let people go, but building a successful business means making hard choices.
It’s hard to let people go, but building a successful business means making hard choices.
As you build your successful small business, there’s no substitute for effective leadership. It’s absolutely necessary so your team is internally motivated to achieve on behalf of your company.
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