By Paul Latham
Are your business owner clients using the “4 Leadership Weapons”?
In previous blogs we have highlighted how the shift away from physical assets and towards “intangible resources” probably represents the single biggest business change in the last quarter century.
Similarly, we believe that the shifting approach in the area of leadership, and building a team culture probably represents the second biggest business change during the same period.
There was a time – in the 20th Century – when most businesses were managed via the organization chart. This resulted in a “command & control” business. The business owner decided what they wanted to do – gave instructions to the team – the team “saluted” and dutifully said “yes sir” – and the team “did as they were told” (most of the time).
Today – in the 21st Century – the influence of the organization chart is much reduced – and the most profitable and successful businesses are “collaborative”. Teams metaphorically “make decisions in the huddle”. Team members are no longer happy to be “told what to do” – they want to be “engaged” – they want to know why the business matters – and why their job matters.
For a business to be successful the business owner needs to work on ensuring that the team are predominantly “actively engaged” – rather than only being “moderately engaged” or worse still “disengaged”. If a business owner can engage their team – they can leverage their potential – they can grow profits significantly (research shows by about 13%) and ultimately build business value.
To do so, business owners need to change their traditional thinking – adopt a 21st Century leadership style – consistently applied by their management team – and concentrate on the “4 Leadership “Weapons”.
The business owner needs to establish Context with their team. That means providing direction to the team so that they understand (and can articulate):
- The Purpose – “Why does the business matter?”
- The Vision – “Where are we going and what will it look like?”
- The Plan – “How are we going to get there?” “What do I have to do?”
Providing Context does not mean resorting to typical stereotypes like – “we aim to be best blah blah blah” – these just sound like meaningless platitudes to most team members – and these statements serve only to disengage rather than engage.
Context requires leaders to provide the full picture. It means providing direction with confidence. This direction will allow the team to subsequently say – “No, we are going in the wrong direction – it’s not that way it’s this way”.
Context means building from the future backwards. If the leader and the team know where they are ultimately going anyone can subsequently direct – “we are going this way- follow me – it will be great when we get there”.
Without values an organization has no “moral compass”. The team will struggle to know the difference between what is “right and wrong” in terms of their business behavior.
Values provide a constant reference point. They help the team to understand the “rules of the game”. Sometimes it may be okay to “bend the rules”, empowering people to make decisions and innovate – but clear values will make it very clear where “bending the rules” is absolutely unacceptable.
Values are a really important part of establishing a clear and consistent business culture. Values never change, whilst business culture can evolve over time.
The business owner must establish trust – or collaboration becomes impossible.
Trust allows business leaders to build a clear “business DNA”.
- We value business progress rather than “idea ownership”
- We value transparency and openness
- We are accessible to the team for help
- We value effort and will provide the benefit of the doubt
- We will build trust
Business owners need to openly encourage collaboration and in so doing they can harness the disparate talents and potential of their team.
4.Momentum & Action
Without momentum the business will stall. Momentum is essential to provide the “fuel” for action and stimulate team desire.
Leaders need to encourage constant action. Make fast decisions and move on. Make small gains every day. Don’t slow down in the quest for perfection. Don’t try to generate momentum from a standing start – keep moving!
If business owners can embrace the “4 Leadership Weapons” – they can begin to build a “Navy Seal” Culture amongst the team. A culture where the team:
- Know the mission
- Know what they are doing is right
- Know they have each others back
- Know they will get the job done
Are you following these guiding principles in your business? It’s a key question if you want to engage your people and harness the talents of your team. If you can create that business culture, growing business profits and business value will follow – and you will dramatically increase your chances of Maximizing Business Potential.
If you are a 21st Century CPA you have a fiduciary duty to help your business owner clients to Maximize Business Potential. You should be encouraging your best clients to think about the “4 Leadership Weapons” – and we can show you HOW.