Essential Leadership Skills for Business Owners

Your Path to a Better Future

Your Path to a Better FutureIf you are the owner operator of a small business, by default, you are the leader.

Many small business owners are not all that comfortable as leader.  They prefer doing over leading.  However, they are smart enough to realize, if they are more effective leaders their business will produce better results and be less dependent upon them.

The challenge is where do you turn for advice on how to become a more effective leader?

There is an overwhelming amount of information on leadership.  Even if you pay attention to just a small fraction of it, you end up with a very long list of things you need to do to be a “good” leader.  It can be very confusing.

Yes there are lessons to be learned from the famous CEO leaders (i.e. Steve Jobs and Jack Welch) who are the focus much of the leadership development information. You have no intentions to build a large corporation.  You are interested in practical and relevant skills for your situation.

Leadership is Situational

There is no one list of leadership skills for small business owners. Start by understanding leadership is situational – different situations require different skills. As a small business owner your situation is unique. You need the skills to lead a relatively small number of people who will help you grow your business your way.  You would like to grow your business in a way that it becomes less dependent on you, affording you more freedom and financial success.

As the owner you have multiple roles in your business.  When you are filling the role of leader, what is your job?  You may not consciously make a distinction between your leadership role and what you do every day.  Differentiating the work you will do when wearing the leader hat will help you determine the skills you will require.

I like Marcus Buckingham’s definition of leadership – “A leader’s job is to rally people to a better future”.  I think this is a perfect way to think about leading a small business.  It is simple, practical and easy to remember.

Five Essential Leadership Skills

If your role as leader is to rally people to a better future, what skills do you need to do that?  Here are the 5 essentials you will need to be a more effective leader:

1. Vision

This is your ability to paint a clear picture of what your business will look like at some future date. If you expect people to follow you, you better be going somewhere.  Think of it as what you want to accomplish…your destination.

Vision is what success looks like to you. Clarity is the key to an effective vision.  In addition to your destination, clarifying what is important to you and your business like core values, core purpose, culture and what role you want to fill in your business are all key elements of this work.  If you are going to rally people to a better future it starts with your vision.

2. Strategic Thinking

If vision is your destination, then evaluating and choosing the best path to reach your vision is strategic thinking. It includes your ability to focus on outcomes and keep your eye on the “big picture”.  The challenge is it is so easy to get caught up in what needs to get done today, you can easily forget about your destination.

It’s important to make some time to step outside of the day-to-day and stay on top of trends in your industry.  Anticipating future business opportunities and potential competitive threats are all part of the strategic work an effective leader does.

3. Communication

It is not enough to have a vision and a strategy in your head. You also need to be able to share it with the people who are going to help you achieve it.  The challenge for many small business owners is how do you share what is in your head with other people in a way they get it.

Just telling them once is never enough.  You need to repeat your message often and consistently.  Your ability to help people confidently see what comes next, how the work they do every day aligns with where you are going, and what’s in it for them is how you will engage your people and rally them to a better future.

To help business owners become better communicators we have developed tools and a specific meeting rhythm to allow them to easily and more consistently share the vision, strategy, mission, core values and goals.  This work allows you to create a common language and point-of-view for your business which foundational in building your culture.

4. Relationship Building

Being able to understand others’ perspectives and deal with them effectively is a key leadership skill. Business is all about relationships. The higher the quality of your relationships – in your personal life and business life – will often lead to a more enjoyable and successful business.

Relationship power is a more effective way to get things done than position power.  Better relationships will lead to more frequent and meaningful conversations.  This will allow you to have deeper connections, and give you more opportunities to share the vision and strategy.  The more you share and connect with people the more they will trust you.  It is much easier to influence someone when then they trust you; as opposed to when they are afraid of you.

5. Action

You have all heard “lead by example”. The challenge around this concept for the small business owner is they may take this concept too far.  They believe if they put their head down and work really hard, go the extra mile for the client and keep an eye on every penny, people will follow and do the same. Visibly working hard is their version of leadership.

I want you to think about action in terms of what actions you can take as leader to get more and better results from your people. For you it is like moving from being the best player to being a player-coach (and depending on your vison to being the head coach).  Involve more of your people more often.

This means adapting more leadership behaviors like coaching, mentoring, supporting and team building.  These are the leadership actions that will enable you to grow your business in a way that is less dependent upon you and ultimately more enjoyable.

Decoding Small Business Leadership

Don’t over complicate your role as leader; don’t ignore it either.

Simply spend a little more time envisioning and thinking about the future. Clearly and regularly share your vantage point and the direction your business is going.  Involve your people where ever you can.  Connect and engage them in making the future better.

Focus on these fundamental skills.  They will serve as the building blocks for you to become a more effective leader.  You will need additional leadership skills throughout the life of your business.  Your unique situation will determine which skills are required.  Leadership is a learned skill.  Once learned it is part of what you do – a set of beneficial behaviors.

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Build Your Dream Business

Imagine it is the year 2020.  The Wall Street Journal is doing a story on your business.

What is the headline?

Dream Business ArticleTake some time and think about it.

The answer to that simple question could be the difference between you building your dream business or just being average.

 

What Your Article Would Say About You

How would that article answer some of these questions?

–         Who does your business serve?

–         What problems do you solve for your customers or clients?

–         Why do people buy from you rather than from one of your competitors?

–         How big is your business?

–         Who are the people that work there?

–         What is your role?

In business, thinking about how to answer these types of questions is strategic work. Strategic work is considerably different than the tactical work you do day in and day out; like answering emails, serving customers, training staff, putting out fires, creating an advertisement, updating your social media, doing the books, networking, following up with people, and, on and on and on.

Dreaming about what you want your business to become is some of the most valuable work you could be doing.  Unfortunately, dreaming about the future feels like you are not being productive, so you just don’t allow yourself to do it when there is “real” work to do.

Dream Business

 

A Dream Come True?

Of course just having a dream about your future is not enough to make it happen.  You also need a plan.  Envisioning where you want to take your business and creating a plan to make it happen is the essence of strategic planning.

You know you need a plan to run your business better.  All of the business books tell you that the “most successful businesses” all have a plan.  Of course, you would prefer to run your business from a plan.  Many business owners embark on creating an annual strategic plan.  For some it has become a habit that enables them to continue to grow year after year.  For most, it becomes an annual exercise in futility.  You spend your time and staff time creating your plan that frankly doesn’t get looked at again until…well, the next year this time.

Your reality is that maybe you have a rough plan of what you are suppose to do each week.  The truth is very few business owners work from a plan; or spend any time articulating how they intend to run, manage and grow their business.

 

Business Growth by Design

Strategic planning is not as complicated as you may think and the best managed businesses treat strategic planning as a business process and not an annual event.  The typical strategic planning process has these four basic steps:

  1. Update the plan annually
  2. Execute the plan weekly
  3. Track and monitor the results quarterly
  4. Making adjustments and updates as need dictates

Because your business is unique there is no one-size fits all strategic plan you can make your plan. With our business coaching clients we use a strategic planning framework that is flexible and adaptable to each client’s needs.  We call our version of strategic planning the Business Design PlanTM because it will help you design, build and grow your dream business.  It is both a framework to create and execute your strategic plan. It is centered on just three questions.  You can get your plan started by answering these three questions:

 

1. Where are you now? 

As you think about where your firm is now, look to see if you have the foundational elements of your strategic plan in place: your core values and core purpose.  These two elements rarely change and they probably will not require a lot of time to revisit or potentially revise.  Here is where you want to step back and “see how you are doing?”  You can do this by:

Analyzing Key Metrics –  As Jim Collins wrote in Good to Great “you need to confront the brutal facts”.  Pull all of your key numbers together and understand your business’s current performance.

Conducting a SWOT Analysis – This is a traditional strategic planning tool.  It helps you to understand and evaluate your company’s Strengths, Weaknesses, Opportunities, and Threats.

Together your Key Metrics plus your SWOT analysis paint a picture of where you are now.

 

2. Where are you going?

This is the “dreaming” part. You want to envision the most ideal future for you and your business.  For many owners this is the hardest part of strategic planning, trying to envision what your organization will look like in the future.  As the economy has demonstrated over the past few years, almost everything seems unstable and unpredictable.  So how exactly are you supposed to predict the future of your business?

You probably can’t.  But you can create your future.

It starts with envisioning what your business will look like at some future date.  You may have some revenue targets and other goals you would like to achieve.  Go further.  Describe how your company must look, feel and act in order to become your dream business.  Use the questions at the beginning of this article (the Wall Street Journal questions) to paint a picture of your dream business.  The value to answering these questions is they will enable you to be more intentional about designing and building your business.

 

3. How will we get there?

Now that you know where you want to go, you’ll need to determine how you will get there.  What are the specific strategies you will use to reach your destination?  Usually there are multiple routes you may take.  The path one business might choose may not be exactly right for you.  Brainstorm and choose the best strategies for you.  This “strategizing” will drive your strategic planning process.

Important strategic areas you will want to work on include:

  1. Your life design strategy
  2. Marketing strategy
  3. Client service strategy
  4. People strategy
  5. Organizational strategy
  6. Management strategy
  7. Succession and exit strategy

 

Actions Speak Louder than Plans

In order to reach your long term vision of your dream business you next need to covert your vision and strategies into action plans that focus on what to do in the short-term.  For each strategic priority you need an action plan.  Each plan will include the deliverable, action steps, responsibilities, costs and due dates.

Now is the best time to decide what your 2020 Wall Street Journal article will say about you.  You still have the opportunity to intentionally design your future.  It is easy to get caught up in the urgency of getting through each day.  Don’t fall into that trap.  Dedicate some of your time to your long term dream and strategic plan.  There are multiple reasons why having a strategic plan is an imperative:

  • Adding new business
  • Increased revenues
  • Higher profits
  • Increased valuation
  • Getting your team on the same page

The overlooked and more valuable role strategic planning plays in your business is that it helps you clarify your dream.  Which enables you to take consistent actions toward that dream.  This in turn results in a much more enjoyable business ownership experience.  This work will help you design the life and business you want.

We offer Annual Strategic Plan coaching and facilitation. Contact us to get more information.

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Five Strategies to Improve Employee Motivation

Happy, motivated employees are something every business owner wants because those employees are more productive.  Job performance is a function of ability plus motivation.  Assuming your people have the ability, what motivates your employees? Do you know?  If not, how can you motivate them?Improve Employee Motivation

Motivating employees is a core component of most management training.  If you’ve had any type of training in management and motivation theory, it may have, in part, been based on the work of Frederick Herzberg.  He was a pioneer and a thought leader on the subject of employee motivation from the 1960′s through the 1980′s.  His theory asserts that the most powerful motivator in our lives isn’t money.  It’s the opportunity to learn, grow in responsibilities, contribute to others and be recognized for achievements.

Can You Improve Employee Motivation?

These are important and fundamental concepts to understand if you want to improve your team’s productivity and performance.  Why?  Because now you know where to start when thinking about how to help motivate your people.  Your first job as a manager of people is to help them be more successful.  You do that by having clear goals and accountabilities, documented systems and ongoing training and development.  Then, utilizing behavioral coaching, you deliver positive feedback to recognize good work and habits.  In just a very short time, you’ll see your employees’ motivation and performance improve.

A contemporary, Daniel H. Pink, has written several books on the topic of motivation. One I would recommend is his book titled Drive: The Surprising Truth About What Motivates Us.  You can also watch the video of his TED talk right here (about 18 minutes) to get a brief overview of this theory:

 

Pink’s research shows that intrinsic motivation – doing things we enjoy, things that matter, things that are interesting or part of something important – is more motivating than extrinsic motivation. Extrinsic motivation is the carrot vs. stick approach – reward or punishment.  He cites the three most important intrinsic elements of motivation are autonomy, mastery and purpose.

5 Strategies to Improve Employee Motivation

Based the concepts outlined by these two experts, here are 5 strategies you can start to apply in your business to motivate your people:

  1. Achievement – put your people in a position to achieve their goals; nothing breeds success, like success.
  2. Positive feedback – recognize your people when they do things right.
  3. Autonomy – understand their need to direct their own work and determine how to leverage that in your business
  4. Mastery – provide opportunities for your people to learn and encourage their desire to improve.
  5. Purpose – connect your business purpose with each individual’s work and their own personal purpose and desire to contribute to something beyond just a job.

Just by employing these strategies, you have the basis of your operating system for managing and motivating employees.  Now, you have to put it into practice.  Make applying these five strategies part of your personal weekly goals and activities and you will see improved employee performance because your people are happy and motivated.

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Why Do I Need a Strategic Plan?

Most business owners do not plan very often or very effectively. You have seen more than one study which proves that companies that use a strategic plan are more successful than those that don’t.  I know you already know planning works. Yet you don’t plan.

Why Do I Need a Strategic Plan

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I am not trying to lecture or scold you, but rather point out the reasons why most business owners do not plan. Because when you understand the reasons you can then choose to do something about it. Here are the common reasons I hear:

  • Too small to have a strategic plan
  • Do not have the time to plan
  • We are already successful, why do we need a strategic plan now
  • Do not see the benefit of planning
  • Things change too fast to have plan
  • I don’t like planning
  • I do not know how to do strategic planning

 

Why Plan?
It doesn’t matter if you’re stuck, already in your comfort zone, or you desire additional growth, there are multiple benefits to strategic business planning. Here are four fundamental reasons why planning is not just necessary, but essential:

  1. Clarity – it compels you to focus on the long term.
  2. Working ON It – it allows you to recognize the need for and manage change.
  3. Prevents Commoditization – it helps you find and keep a competitive differentiation.
  4. Engages and Inspires – it enables you to communicate and involve your team in setting the direction and building of the business.

 

Planning is a Critical Strategic Process
Your strategic business plan is the plan you use as a road-map to execute your strategy and reach your envisioned future. This is not the business plan you would put together for financing. This type of plan is something you will actually use to run and grow your business.

It doesn’t matter if you prefer to call this type of plan a business plan, a strategic plan or a growth plan. Documenting your plan is extremely important, but understand the physical plan itself is not the most important part of planning. The real critical activity is the process of planning – the way you and your team create, discuss and update your strategic plan.

The real value is in the ongoing process and not the physical document. Of all the tools available to the business owner, strategic business planning is perhaps the most powerful for moving your company forward and giving you the feeling you’re in control. There is an opportunity for every business owner to grow more effectively and more strategically by making strategic business planning a standard process in your business.

 

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The Business Owners Magic Pill

The one thing that will solve all of your problems

Magic Pill

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Sometimes a small business owner will come to The Renaissance Group looking for the proverbial “magic pill”.  You know that one thing that will solve all of your problems, right away.  Because if you can just solve all of your current problems, then you will be happy, profitable, and have more time to do all the things you would like to do.

Unfortunately, this is not what we do…mainly because there is no one thing; there is no one book, no one coaching program, no one training session, no one piece of technology, etc. that will make you happy and solve all of your business frustrations.

A better way to approach this concept of a “magic pill” is to understand there is no magic pill.

Once you understand this, now you can actually get to the underlying cause of your challenges and begin to improve and move forward.  If you study how successful companies grow their businesses you will eventually realize there is no one growth strategy they all use.  Successful businesses come in all shapes and sizes. They do not have one formula, or set of steps that works every time.  There is more than one way to grow a business, which in turn means you can stop searching for your “magic pill” as just one thing.  Start looking for all of he things the most successful companies share.

Success does leave clues.  What all of these most successful companies do have in common is that they all focus their time, energy and resources on the areas of the business that actually drives growth.  There are 5 critical areas they focus on.  You might think of them as ingredients in your success formula.  Interestingly the companies that get stuck and reach a plateau often overlook some or all of these areas.  They are the missing ingredients preventing them from sustained growth over time.

The five critical ingredients to create your own magic pill are:

  1. Clarity – It is hard to move forward and grow if you are not clear about what your business must look like and accomplish, in order to provide you with the lifestyle you desire.
  2. Strategic Work – There will be a gap between where you are today and where you want to go – your clear future.  Strategic work determines how you will move forward; your clear path. It is an ongoing business practice in the best managed companies; it is a random event in the others.
  3. Planning – The best managed small businesses understand that planning is the habit required to implement your strategy, reach your goals and achieve your vision. Unfortunately, most companies don’t plan, or don’t plan well or consistently.
  4. Systems – It is difficult to replicate your success, continuously improve, and train staff without documented business systems.  Standard operating procedures and documented systems are missing from the majority of small businesses.  This makes it difficult to grow both effectively and efficiently.
  5. Leadership and Management Skills – Are required to inspire your team, create and execute your strategic plan and develop your people.

With these ingredients in place you will be astounded by the freedom, control, time and income you receive from your business. Doing the right things day-in and day-out is all the magic you will need to be a happy successful business owner.  It turns out your magic pill is understanding where the most successful companies spend their time and energy and then spending your time and energy on these areas.

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