So you’re in charge: perhaps you started the company, maybe you’ve taken it over, or you were handed the top job and told to run the show. What next?
Every company is different. But while scale of the demands placed on the chief executive of a listed multinational may be different to those a small business owner faces, many of the major challenges business leaders face are similar.
After discussing such challenges with a wide range of entrepreneurs, investors, executives and analysts, I suggest they boil down to eight essential “acts” of leadership.
The academics would give these acts a technical term – “strategy”, “innovation”, “human resource management” – but try thinking about them in plainer terms:
- Sharing and – not to be forgotten
Many new leaders start out by conducting a strategic review. The problem is that the ground is shifting beneath their feet: a five-year plan barely lasts five weeks these days.
To avoid being caught out, you need to understand the link between a strategy or a vision, and its execution. Without the latter, the vision will never be realised.
You need to scan the horizon for forthcoming threats and opportunities – but never let that be a substitute for taking a decision. And you need to remain open to the possibility you may have to correct course.
I liken the right frame of mind to the mini-roundabout: devised to ensure that drivers keep moving towards their destination, but with sufficient caution about what is going on around them to avoid calamity.
Don’t assume that authority comes with the title. Any team, however small needs motivating – moving – and it falls to the leader to do that.
Unfortunately, many leaders assume that the old tools of cash bonuses, promises of promotion or threats of dismissal, will do the trick. Studies suggest, though, that these simple weapons have lots of limitations.
Do not forget to celebrate “small wins”, and never underestimate the simple power of a “thank you”.
Innovation, production and marketing are central to what companies do. When businesses say they “make” something, it represents a combination of all three. But especially when it comes to innovation, the number of theories about how to come up with new ideas almost outnumbers the ideas themselves.
Time and freedom to think are among the keys to innovation, but you need to impose limits, too, to ensure ideas are in line with your aims.
Avoid the “not invented here” syndrome by remaining open to ideas from outside. Stay alert to the possibility that today’s great and profitable idea may be tomorrow’s commoditised product or service.
You may have inherited a team, or you may have the opportunity to build it from scratch. Either way, you will need to shape it so that you have the right people for the task ahead.
Jack Welch, when chief executive of General Electric, used to say that his principal job was to hire good people – often those who were smarter than him.
Bear in mind, though, that a team made up only of stars can be dysfunctional. It is often better to shape a team of competent individuals round a few high-performers.
If you are going to unite your team around a vision, ensure that the “cult” you may create is open to challenge and change.
Never stop training your staff: it is an investment in their, and your, future.
You may be happy with your business at its current size, but the chances are if you are successful as a leader, it is going to grow. You may even want to take over another group. Beware: with greater size comes stress for leaders who have only just got used to the culture of the company they already lead.
Don’t assume your company can run without hierarchy, which forms naturally in any group of more than two people.
When expanding abroad, do not assume your successful domestic range will automatically work there just because it works here. Look for partnerships, but treat them as carefully as you would a merger.
It may be the most underrated element of leadership: many top managers are just trying to get by under the constant pressure of sales deadlines, budget constraints and, occasionally, outside scrutiny.
Some leaders wilt in the heat of such pressure. Make sure that you have a support network – possibly outside the company – including a few trusted individuals with whom you can share any problems.
Keep an eye out for pressure within your team. Cultivate a little self-doubt, but avoid self-delusion – the assumption, for instance, that only you can make key decisions – which can lead to burnout or disaster.
The natural form of a business often seems to be a pyramid, with the chief executive at the top. But there are other ways of organising and, even within some large companies, there are opportunities to encourage a flatter structure, granting more “mission command” responsibility to individuals beyond the named leadership – a technique the modern military has been using for decades.
The advantages include a sense of autonomy among younger staff, and a willingness to share skills that may complement those of the leader.
Set the framework for ideas to evolve – make sure the company sticks to its purpose and principles – but trust your team to get on with making the ideas happen.
It’s day one of your new job. You would be forgiven for not wanting to think about what happens when you leave. But too many businesses, large and small, neglect the question of what – and who – comes next.
One CEO I met was surprised to find that his first board meeting had as its first agenda item the question of who should succeed him. But thinking about the succession is not only a good way of curbing leaders’ egos, it is common sense.
If you’re a family member leading a family company, you may need to think about professional managers who could be stewards for the long-term future. Above all, take soundings from trusted staff and outside observers about when your time is up – and be careful not to overstay your welcome.
About the Author
This guide has been written exclusively for ByteStart by Andrew Hill, Management Editor of the Financial Times and author of Leadership in the Headlines: Insider Insights into How Leaders Lead (FT Publishing, 2016)
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