Leadership - The Glue That Binds

In an earlier series entitled Five Point Performance, I described five points that together create what I call Strategic Management. Four of the points are Vision, Motivation, Plans and Execution. The fifth is Leadership -- easily the most important of the five.

Leadership is the glue that binds the five points together. Leaders create the vision, communicate it and motivate others to take it up, help create the plans, and direct and control the execution of the plans. Without a leader the "ship" founders -- strategic management leads to nothing.

You may be a poor leader and have a good company, but you won't have a great company until you become a good leader.

One way to become a better leader is to emulate the practices of a known great leader. An example we can all relate to -- whether a student of history or not – is Abraham Lincoln. Some people believe him to have been the greatest leader of all time. Donald T. Phillips wrote a book, Lincoln on Leadership (Warner Books, 1992), describing the power of Lincoln' leadership.

Studying the life of Lincoln as a leader has practical benefit because the leadership traits he exhibited can be practiced by leaders at all levels, including leaders of small businesses. For Lincoln leadership meant the following practices:

He left the confines of his office to circulate among his subordinates, and among the troops. Lincoln spent more time with the army than any other president, and is the only American president to have come under enemy fire. He learned first hand about issues, not waiting for them to be filtered or spun by his subordinates.

He suggested many courses of action to his generals, but never ordered them to take them. He empowered them by delegating responsibility and authority to make their own decisions, while at the same time exhorting them to be aggressive. He persuaded rather than ordered them to move. And those who would not take the lead were removed from their place at the head of the army. He practiced leadership as a way of creating openings for other people to step through.

He had a clear vision of the future -- an undivided Union of states with equality among people and no slavery. His followers slowly came to follow the fierceness with which he held to this vision. It was the light to which he moved forward. He held tightly to this vision as he twisted and turned the government and the army toward it --even in the face of harsh criticism and mockery.

He told the truth to his followers no matter how bad the news. Leaders who are honest and forthright gain the respect of their followers, and are enabled to lead. It’s no wonder we have no great leaders in our government -- honesty seems to have gone away in the last century.

He encouraged innovation and risk taking. He constantly asked the question, “Can we do better”? He asked for suggestions, then frequently responded by saying “We will try it. If we never try, we never succeed”. Lincoln surrounded himself with people skilled in their fields, not with “yes men”. He wanted their ideas, their innovation.

These are only some of the “modern” leadership practices used by Abraham Lincoln some 135 years ago. Timeless, effective, and practical for the ordinary leader. Emulate Lincoln, and you can become an effective leader, the glue to build your organization into a great one.

Charles R. Schaul, Partner of SixPillars Research Group, focuses on increasing business profits by resolving the problem of customer attrition. Aligning companies with their customers; generating and implementing strategic initiatives; and promoting employees’ customer focus through commitment, responsibility and accountability combine to achieve the result.

Copyright 2008 by Charles R. Schaul, Boulder, Colorado. All rights reserved.

Leadership, Management and Failed Growth

Many small and not so small companies grow rapidly after inception, driven by a supercharged, frequently overachieving, founder. These businesses usually are very profitable because overhead is low and control is tight and well within the span of the founder. The owner’s drive and energy permeate all activities. The company thrives.

Then, many of those same companies hit a ceiling. Growth may continue but profits decline or even disappear. Cash flow frequently turns negative. Sometimes a company fails.

What has happened? What has kept the so called “second phase” of expansion from kicking in? Why has the company HIT THE CEILING?

Out of many possible answers to this question, the most frequent is the failure of the hard driving founder to transform from manager to leader. Managing is one thing. Leading is quite another.

One source defines the work of a manager as, “directing and controlling a group of one or more people or entities for the purpose of coordinating and harmonizing that group towards accomplishing a goal,” while the work of a leader is "influencing, motivating, and enabling others to contribute toward the effectiveness and success of the organizations of which they are members."

Leading is inspiring others to do the work effectively – meaning efficiently and for a business, profitability. The key word is inspiring. In today’s business terms we would say leading means having goals (some would say “vision”) for the business and inspiring others to adopt them readily, even enthusiastically. It means getting others to “buy in” to the plans for reaching the goals. Leadership includes encouraging, teaching, learning from mistakes rather than punishing, praising, rewarding. It means selecting competent people to do the necessary jobs, training them well, giving them the resources they need and letting them accomplish results with your help, not your management. It means letting go of great chunks of control and trusting that others will do the job.

The ability to be a leader does not rest on charisma. In fact, many great leaders are far from being charismatic people. Leaders are not necessarily “born to lead,” but can learn the techniques of leadership in many ways.

The inability of an owner to “let go” and trust that others can do a job well insures a company will hit the ceiling. We call this micro-managing. Companies led by a micro-managing owner have weak middle managers who turn to the “Boss” when problems arise. Frequently middle managers are punished for mistakes. With this environment middle managers “hunker down” and turn to the Boss for all the answers. The process weakens the company and it hits the ceiling.

For example, one Boulder company grew rapidly from its inception both in sales and profits. After only five years it had reached over a million dollars per year in profit. Then it broke through the ceiling of the founder’s managerial ability and almost doubled in size. Unfortunately, although control requirements expanded beyond the span of one person, there was no “letting go” by the founder. He never became the leader the company needed. The result – control slipped, and then fell apart. The firm lost more in its next two years “above the ceiling” than it made in all its years “below the ceiling.”

Some company founders recognize they are not the leader that can drive their company into the future. They are smart enough though to hire others to do that, while they remain the technical innovator, the marketing maven, the great salesperson or some other specialist that drove the company to the point of hitting the ceiling. Then the company prospers because leadership is good; the founder prospers because someone else is leading the parade.

Other founders may not want to give up control, and are smart enough to stop expansion when the company nears the point of hitting the ceiling. A Phoenix micro circuit company has operated very profitably for many years with 15 or so employees and very little growth in sales. The owner, recognizing his leadership limitation, manages the firm effectively, creating a very comfortable living for himself and not risking growth beyond his span of control.

Some founders, recognizing their limited leadership ability, study the subject and train themselves and become effective leaders. Through emulation of other leaders, reading, training courses, clinics and seminars, they evolve from manager into the leader needed to continue driving their company forward. For them there is no danger of hitting the ceiling.

Charles R. Schaul, Partner of SixPillars Research Group, focuses on increasing business profits by resolving the problem of customer attrition. Aligning companies with their customers; generating and implementing strategic initiatives; and promoting employees’ customer focus through commitment, responsibility and accountability combine to achieve the result.

Copyright 2008 by Charles R. Schaul, Boulder, Colorado. All rights reserved.