Rapid Chaotic Change Requires Leadership Agility

Understanding Change

It is undeniable that change is accelerating and becoming more chaotic.  Leaders need to understand this change.  What is driving the change?  What are the implications on your leadership?

Technology is driving the change. I have put together a model to help you understand this change and high-level implications on your leadership. After exploring the model, we will highlight key thoughts on leadership agility to deal with this rapid and chaotic change in today’s business world.

Industrial Revolution

We are all familiar with the industrial revolution starting back in the mid-1700s.  New technology in the form of machines changed the manufacturing process of goods.  Machines substituted for human labor.

It brought about new forms of business enterprise because this change was mass production.  Organizations had to evolve to deal with the larger volume of transactions.

It was a new world.

Management by Exception

Back in the 1960s when I was taking organizational behavior courses the buzz word was “management by exception.”  You probably heard of “If it ain’t broke, don’t fix it.”

The assembly line was key to production.  You had to keep it going.

Change was not rampant.

Therefore, the focus was on control.

To lead these massive organizations with their hierarchies, the management style was traditionally autocratic.

Information Revolution

The technology of automation from the Industrial Revolution paved the wave for a transformation change in information processes with the advent of computers.  Software programs did the work of repetitive clerical type roles and more.

I joined Shell Oil in 1970 as one of those programmers to create this new software.

The new buzz word was “Change is the Constant.”

The rigidity of large bureaucratic organizations was being significantly impacted by the delayering and restructuring brought on by this information processing revolution.

More decisions had to be made to cope with the constant change.

Knowledge became more important with these constantly changing dynamics.

It made sense to have others participate in the decision-making process. 

Thus, the management style shifted more toward Participative.

Companies needed to keep up and not get lost in the change from their competitors.

The focus turned to adaption.

Second Wave of the Information Revolution

By 1965, an M.I.T. scientist developed a way of sending information from one computer to another that he called “packet switching.”

This has continued to evolve into today’s multi-faceted internet world.

It is not just social media.

You can type anything into your browser and get a voluminous amount of information in seconds.

This has been a big driver of the acceleration of change which creates instability.

Molecular Revolution

The hybrid DNA-RNA was created around 1960 as part of the early beginnings of the Biotechnology Revolution.

At the turn of the century, the world had advanced to the sequencing of the human genome.

On a similar front, the theory of manipulating atoms was around 1960.

Some twenty years later, the scanning tunneling microscope was developed that could see individual atoms.

Nanotechnology is real.

Together this has all led to the manipulation of cells and atoms.

Chaotic Change

Today, this Molecular Revolution has come to the forefront.

It is transforming the very fundamentals of living systems and materials.

In short, the molecular revolution is another key driver underpinning the chaos.

Fundamental Reprogramming

The ability to fundamentally reprogram things is opening people’s minds not constrained by traditional boundaries.

Management styles are shifting to visionaries.

Instead of being whipsawed by accelerating and chaotic change, visionaries are creating the future.

Ramifications on your Leadership Style

There are practical ramifications of today’s changing dynamics for every leader.

Those in fast cycle industries have been in this chaos for some time.

Slow cycle industries have sped up.

Life spans for companies have shortened.

Technology and imaginative minds are driving more technology and transformations that lead to even faster change and more chaos.

Leaders must be more agile and flexible to cope and prosper, but how do you do that?

What competencies and skills are needed to be an agile leader?

There has been some very thoughtful research on this question.  In this blog, I can only give you highlights and direct you to some of the better resources (in my opinion).

Leadership Agility

In 2007, Bill Joiner & Stephen Josephs wrote the book LEADERSHIP AGILITY Five Levels of Mastery For Anticipating and Initiating Change.

It is a rather sophisticated approach based on their notion of a Leadership Agility Compass outlining four competencies: Context Setting Agility, Stakeholder Agility, Creative Agility, and Self Leadership Agility. 

Using the compass, they then take you through their five levels of agility development: Expert, Achiever, Catalyst, Co-creator, and Synergist.

It has a lot of content. If you are really trying to enhance your leadership agility, it is worth a read.

Learning Agility

Korn Ferry has also done a lot of research on leadership agility outlined in their paper on The Organizational X Factor: Learning Agility.

They describe learning agility as made up of five factors: Self Awareness, Mental Agility, People Agility, Change Agility, and Results Agility. 

You can see some similar ideas to Joiner and Josephs’ Leadership Compass.

I like their addition of Results Agility described as delivering results in first time situations.

The authors, Mary Knight and Natalie Wong, contend that Learning Agility is a top predictor of high potential people. Companies with highly agile executives have 25% higher profit margins than their peers.

Core, Edge and Agility

Agility competencies are important.

It is also important to have a perspective in thinking about the context of this change in your day-to-day world. 

What is central to how the world should work for you to what are the dramatic implications of changing technologies?

In this respect, Lee, Hecht, and Harrison, a global leader in talent development, wrote an interesting paper on Core, Edge, and Agility.

My Silver Fox Advisor colleague, Doug Thorpe, has condensed their ideas and his own in an article on his website in 2018 entitled Leaders: There’s a New Way to Understand Change | Business Advisor, Mentor and Executive Coach | Doug Thorpe

It is certainly worth your read with the idea that agility helps manage the forces of what’s core and what is on the edge.

Set Direction Not Destination

Agility has certainly become a popular topic for organizational consultants in this 21st century.

 One concept I like from McKinsey’s March 2018 article of Leading with inner agility is “set direction not destination.”

This brings us back to my model introduced at the beginning of this blog on understanding change.

You not only have to have agility competencies, and a framework of thinking about agility as we have just discussed.

You also need to be the visionary highlighted in the model.

Ultimately, the management style of significance in this world of accelerating and chaotic change is a visionary leader.

Set directions with the agility to adjust destinations.

To paraphrase Jack Welch, control your own destiny or someone else will.

Remembering the Mentor’s Mentor

It is with heavy hearts we announce the passing of one of the Silver Fox Advisors founding members, Bill Spitz.

Bill was a leader’s leader, a mentor’s mentor. He led by example is all that he accomplished.

There is a chapter in Hank Moore’s “The Big Picture of Business, Book 3” that best describe’s Bill’s impact. To quote Hank’s book:

One of my most respected friends and colleagues is Bill Spitz. He embodies the concept of business mentoring. He created mentoring programs and set standards for many others who have guided successful businesses.

Bill Spitz founded and ran for more than 40 years Big State Pest Control, the largest independent pest control business in the Southwest. He merged this business with Waste Management Inc., the largest firm of its kind in the world. He served as President of the National Pest Management Association and was elected into its Hall of Fame, recognized for contributions to the professionalism of the industry.

Bill served as the first Adjunct Professor at the Hilton School for Hotel and Restaurant Management at the University of Houston. He served as president of Silver Fox Advisors, a business think tank.

He has a long track record of speaking, mentoring, and providing business consultation throughout the U.S. under the umbrella Peak Performance. Bill Spitz helped business executives reach their full potential, maximize profitability and return on their investment as an advisor, coach, mentor, and sounding board.

Bill himself was the product of mentorship. He knew full well the value of getting the best advice, applying the mentorship teachings to his own business, and then sharing the valuable ideas with others. Mr. Spitz discussed customer loyalty, the costs of building repeat business and strategies to keep customers who are happy and who refer others. He successfully practiced and championed customer focused management.

In 1990, he began coordinating a CEO roundtable for the Greater Houston Partnership, bringing in Silver Fox members and other mentors to strengthen this valuable program. In later years, the Silver Foxes expanded the roundtable program.

In training and energizing other mentors, Mr. Spitz addressed the critical elements for constructing mentoring programs that produce high-performing results. The practical use of stories and real-world examples illustrate key concepts, keeping members engaged and participating.

Thank you Bill Spitz for your dedicated service and influence that will last for generations to come.

Breaking Out of the Development Stage for Small Business

According to the most recent NAICS Association data, there are roughly 14 ½ million small business with annual sales of less than one million dollars in the United States. They almost all have less than ten employees.

The Chamber of Commerce indicates there are about 400,000 new businesses started each year. Of these, about 20% go under in this first year. The reason most often given was lack of funding followed by poor planning and then bad management.

In my 4 Stage Growth Model outlined in the October 8, 2020 blog, the Development Stage’s criterion was those small companies with revenues of less than one million. The stage is not built around sole proprietors but for those companies desiring to substantially grow their revenues which involves adding employees.

Using this 4 Stage Growth Model framework, this blog will share some thoughts on how to break out of this Development Stage. 

These are typical characteristics of small businesses who have recently launched to those who are struggling to break out of this early stage.

Development Stage Characteristics

  1. Revenues
    Cash inflow from revenues are not robust and less than one million.
  2. Sustainability
    Managing cash to survive is critical for sustainability. Chasing new customers and constraining expenses are dominant management features.
  3. Business Focus/Planning
    Day to day operations dominate the owner and any workers activities. Planning is generally no greater than a year and very ad hoc.
  4. Organization
    Owner controls decision making most of the time. Staff is limited often less than ten as revenues will not sustain greater numbers.
  5. Processes
    Operational sophistication is not strong with processes not well defined.
  6. Target Market
    Unless a strong business idea backed by venture capital or significant angel funding, the customer base is generally local.
  7. Value Proposition
    Owner’s business idea drives offering to customer.
  8. Leadership
    Leadership is not typically a discussion point as distracted by daily business. There are few employees.

Where do you want to take the business?

This is the first question to ask yourself in this Development Stage.

If your answer to this question is you are a sole proprietor and quite comfortable continuing down this path, then no need to read further. You are happy and fulfilling your personal career aspirations.

For the rest, one way to think about this question of where you want to take the business is to ponder your exit plan.  That helps establish the long-term vision.

Maybe this is a family business, and you want to pass it along to future generations stronger and better positioned than it is today.  That is a viable exit plan because you recognize that if you aren’t growing your dying.

 Others want to develop the business through their career to be able to sell it for their retirement funds. My only caution with this vision is you need to build a sellable business.

Some want to take the business as far as it will go with the aspirations it becomes a meaningfully sized business with significant revenue and profitability.  The exit plan may be to sell when a certain valuation is achieved, or to continue to be engaged whatever it morphs into becoming.

Then, there are those with great ambitions of building an empire which they want to control to the grave.

Obviously, there are many scenarios.  What do you want?

As soon as that exit plan is clearer in your mind, the next question becomes how do I get there?

The answer from most every business advisor is you will need to plan a path.

Take time to plan

If you have recently launched your business, then hopefully you have put together a business plan.

 Many people just jump into starting a business without thinking through the essential elements necessary for ongoing success which is why so many go under in their first year as the Chamber of Commerce points out.

Even those who have made it through the first year, often continue to float sideways without any meaningful growth. Many will die before their fifth year.

My experience is these small businesses spend all their time fighting the daily fires trying to survive with little time for planning.

If you are in this position unless you set some meaningful time to plan, then the business will just keep floating sideways.

What are elements of the plan for breaking out?

My reason for developing the 4 Stage Growth Model for small businesses is to give a roadmap of elements to aspire to in the shorter term.

Thus, the objective becomes moving into the Growth Stage.

Here is a generalized description following the same elements outlined in the Development Stage with new characteristics.

Growth Stage

  1. Revenues
    Owner(s) are getting excited about the organization’s success. Traction with new customers or expanding activities with current customers is generating a growing revenue base. Typical revenues run above one million and below ten million.
  2. Sustainability
    Organization is approaching a going concern where owner is less critical to survival and growth. Revenues are providing cash to invest in business and improve operability and compete more effectively for new business. Loss of key customers can prove devastating.
  3. Business Focus/Planning
    There is a fair amount of activity on generating new ideas for products/services/customers and more sophisticated approaches to attracting customers through marketing. Still planning is heavily oriented towards current year. Planning still may be rather ad hoc lacking strategic focus synchronized with tactical game plans. Planning framework including mission, vision, objectives, value propositions, target markets, strategic themes, competitor analysis, goal cascading, accountability, and so forth are often lacking. Effort does not seem to match current rewards for many with the focus still on the here and now.
  4. Organization
    Other key players have evolved and perform critical roles. Often, these players interact more, and teamwork is emerging. Organization structure is still somewhat loose with not overly formal role definition. The size of the organization varies based on the nature of the product or service provided. Often staff exceeds ten and but generally does not exceed fifty and almost always less than one hundred. Contractors are used to avoid adding staff in many cases. People can perform multiples functions.
  5. Processes
    Processes have emerged and there is a level of documentation and sometimes training. Processes are often changing and adapting as more effective functioning progresses and customer feedback requires modifications to be made.
  6. Target Market
    Local market continues to dominate customer base in most cases. Customer loyalty has emerged and identified as key customers with a retention focus. Expenditures for sales and marketing have expanded significantly. Often there are some dedicated people to sales beyond owner and budgets for improved web sites, marketing collateral, and marketing campaigns.
  7. Value Proposition
    Value proposition is adapting to customer needs and customer feedback.
  8. Leadership
    Owner and key players are beginning to think about how to motivate and retain employees. Decision making processes are receiving some scrutiny. Delegation has emerged where owner feels comfortable with key players carrying out more defined roles. Level of participation in decision making varies but generally still well controlled by owner.

Not sure this Growth Stage can be achieved?

If you face the dilemma of breaking out, you may be bewildered on how to move into this Growth Stage.

Here are two recommendations for you to consider if you are willing to listen to others.

First, look for a business advisor.

The association I belong to, The Silver Fox Advisors, specifically targets small businesses.

This is our mission.

“Our association of proven business leaders serves the needs of small business owners, CEOs and entrepreneurs in the Greater Houston area.  We help leaders establish, grow, and prosper their business by sharing our collective wisdom through robust service offerings.

The second recommendation is for you to consider their service offerings.

I particularly recommend their CEO Roundtables that are free of charge.

This will provide you an advisory type board of other small business owners and CEOs trying to grow their businesses too.

A Silver Fox Advisor participates in these monthly meetings.

You should also consider our CEO Education series as well as our Lunch & Learn programs.

If this interest you, go to our website Silver Fox Advisors for more details. As we like to say, Growing your business can be challenging.  You don’t have to go it alone.

Reflections on Servant Leadership

What is Missing?

Robert Greenleaf’s ideas on Servant Leadership have gained quite a group of dedicated followers since the publication of his essay in 1970. He articulated, “It begins with the natural feeling that one wants to serve, to serve first.  Then conscious choice brings one to aspire to lead.  That person is sharply different from the one who is leader first, perhaps because of the need to assuage and unusual power drive or to acquire material possessions.” While the foundation of his ideas is very sound advice on leadership, Servant Leadership has not become the pervasive mainstream theory of leadership.  Why is this so and can his foresight be leveraged with additional insights?

Here are some thoughts for you to ponder that hopefully will be fruitful in leveraging Servant Leadership into our practical day to day world of business.

Confusing Contrast

The contrast to a servant leader by Greenleaf is a leader being driven by power and material possessions.  This line of thinking would have been natural at the time as the prevailing autocratic model of management was indeed driven by power and authority. That model was under challenge particularly in the 1960s from insightful thinkers such as Douglas McGregor’s Theory X and Y, Rensis Likert’s work on the performance of different leadership styles, Blake and Mouton’s managerial grid and so forth that we discussed in my blog on The People side of Leadership.

Unfortunately, Greenleaf’s depiction of leadership becomes obfuscated without a clear distinction between managers and leaders. I addressed that in a previous blog Manager vs Leaders. In essence, a manager has a position of authority and responsibility within the organization that involves making decisions such as setting plans and budgets, organizing and staffing, controlling through accountabilities and so forth.  Leaders quite simply have followers on where they are going.

Greenleaf does not explicitly discuss managers; however, he implicitly intertwines the functioning of institutions and “the system” with leadership insights in his essay. This is not surprising as too often managers and leaders are equated with HR vernacular like “she was promoted to a leadership position.”

The idea of assigned leadership is still prevalent in modern leadership theory.  In my opinion, this misrepresents the actions of followers.  An employee may obey a manager’s direction.  That is different than followers who want to follow.

When Greenleaf talks about an unusual power drive or material possessions that too gets all intermingled with the role of a manager with little to do about leadership.  Managers because of their role in the organization make more money than the employees working for them and the position has inherent power which in many respects depicts the leadership contrast Greenleaf presents.  But unfortunately, that tells us little about the manager’s leadership ability. Greenleaf’s alternative in many respects is a false alternative to Servant Leadership because someone focused entirely on “me” being driven by power and purely self-interest will not be a leader.  Leadership requires a “we” not a “me” mindset.

We Mentality

Leadership requires more than one.  The leader must persuade someone to follow their advocated vision, goal, or simply direction. For someone to follow, their needs must be met in some meaningful way of value to them. The direction should include a common goal. There must be a form of a value proposition that motivates or better inspires them to follow that direction.  Thus, the leader’s mindset must shift from “me” to “we.”  The leader must serve the needs of followers.  As many authors suggest this leads to some form of collaboration.  If that direction and collaboration achieves meaningful results, then the followership is strengthened.    It is a natural process.  There is no need for the leader to have a position of authority in the organization or institution in Greenleaf’s vernacular.  Anyone can be a leader at any point in time.

Managers Need to be Leaders

In pursuing the leader’s advocated direction, the leader has needs that are met in some meaningful way as well.  Thus, the foundation of leadership is that mutual benefit is naturally derived for both the leader and the follower. In essence, leader and follower are serving one another.

Clearly, a manager is in a hugely attractive position to provide leadership because of their designated authority to direct.  If the advocated direction is seen to provide meaningful value to the employee, then following can occur naturally, and there is mutual benefit derived by both parties.  But for that to happen, the manager must be reaching out to employees and get them engaged and aligned with the direction. When this occurs, then indeed a manager can be a leader and, in the process, unleash inspired motivation from employees because the direction aligns with their higher-level needs.

Some may argue that leadership is not about “we” but rather about strictly serving the other person.  This is not really a discussion about leadership as leaders have followers.  Serving may or may not lead to following. There are many ways to get others to follow you.  One of the strongest is to develop them, get them engaged and guide them in the pursuit of their personal purpose.  In the case of managers, developing employees is a key responsibility.  A centerpiece of people development is serving, coaching, guiding, and mentoring others.

Think Value Propositions

What Greenleaf advocates is core to being a leader.  The leader must understand the needs of people in order to provide a direction that will meaningfully fulfill their needs through value propositions. Leaders dedicate themselves to fulfilling value propositions.

For a leader and followers plus managers and employees, mutual benefit for me is the leader serves by providing a value proposition that is meaningful to followers (employees in the case of a business owner). Likewise, the follower or one can correspondingly think of employee should provide a value proposition to the leader/manager to create mutual benefit.

Still, the manager and hopefully leader has other stakeholders.  There are many stakeholders that must be considered in a business enterprise including investors/banks, the relevant community, and so forth.    It is not simply the employees accountable to the manager even though they are crucial to success.  Practically there are tradeoffs in vision, goals, and directions for the various constituencies. Thus, the reality is more complex than simply one on one relationships of manager and employee.

In serving to fulfill other’s needs, the manager/leader’s needs will also come into play which leads to the centerpiece of achieving mutual benefit.  Mutual benefit lends itself to adaptability depending on the situation with various people shifting in and out of the leadership role (not managerial role) as appropriate depending on their relative strengths, capabilities, and foresight.

Think Teamwork

Thus, there is mutual support serving one another to achieve the greatest benefit for all.  This is the nature of teamwork and collaboration.  Leadership is very much like a team sport where everyone wins.  In Greenleaf’s essay the leader’s role is much more static with less dynamism than required in our fast paced always changing world today.

Without this concept of mutual benefit and its derivative teamwork, people in managerial roles find it challenging to pursue only a servant leader mentality.  For example, companies stay in business because they provide a meaningful value proposition to their targeted customers.  In that respect, successful companies serve the customer just as leaders serve their followers.

Servant seems Demeaning

The term servant can get in the way as well for managers even though there are interesting philosophical underpinnings in Greenleaf’s essay. No one needs to be a true “servant” to a master. The humbleness and will to serve are terrific traits of leaders. Tom Collins found this in his book Good to Great: Why some Companies Make the Leap and Others Don’t. But for many the term servant seems demeaning.

Transcending to a more comprehensive state of mutual benefit with a “we” mentality, collaboration, engaging value propositions across the board, teamwork leading to successful outcomes more readily lends itself for managers to become leaders.  The positive momentum of a company grows enormously when managers become leaders too, which is why organizations spend so much time and money on leadership development programs. When managers become leaders, they can unleash the motivational potential of their employees and correspondingly significantly increase the performance of the organization. Remember that people follow success.

The Performance Side of Leadership

Most small business owners/CEOs have a desire to grow and become successful notwithstanding the challenges. In my recent blog of October 8, 2020 talking about the 4 Stages of Growth for Small Businesses, I set out a framework on what the path forward could look like.  Leadership plays a greater and greater role as you progress through the stages.

In the Development Stage, progress is a lot about you and perhaps a handful of people that are trying to build a sustainable business.  As the business grows, more and more people become involved. In previous blogs, we have been building a leadership model based on the 3 Ps of People, Planning, and Performance.

On the People side of Leadership blog, we advocated to be a leader not just a boss by understanding and addressing what matters to them.  This facilitates people following you and being motivated.

On the Planning side of Leadership blog, we advocated your envisioning the direction and engaging your people to form a common purpose. We described the planning process and how your leadership impacts each activity. Setting specific plans that are critical for the business’s success follows your key strategies that provide your differentiated value proposition for your targeted customers.  This too will have a major impact on Performance and the motivation of your people to achieve these plans.  Finally, the performance review and adjustment process will also have a huge impact on performance of the business.  Plans are the catalyst to bring performance from your people.

This leads to today’s blog. Without successful execution of the plans that leads to positive performance, it can all become rather futile.  Most plans that fail do so because of poor execution. Don’t be deceived by thinking when the plan is done it will magically happen.

Larry Bossidy & Ram Charan in their book Execution The Discipline of Getting Things Done, say that “Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously following through and ensuring accountability.” (p. 22) This is one of the few books written on execution compared to strategy and leadership that are overabundant.

What does matter on the Performance side of Leadership?

Communication Matters

Many leadership authors expound on the importance of communication. That ought to tell you something about its central role in achieving performance.  Most will say it needs to be clear, concise, simple, and executable.  Almost all recommend the leader being a good listener and soliciting feedback.

You might recall in my blog on the 4 Inner Ps of Leadership that one of the strength domains under Proficiencies is Executing.  Rath and Conchie in their book on Strength Based Leadership, further delineate this domain into strengths described as the arranger, consistency, deliberative, focus, responsibility, and so forth.  Under the Influencing Domain, key subsets are activator, communication, significance, etc. Their book is worth your while to take a read and the test.

George Bernard Shaw had a profound quote that gets to a key point, “The single biggest problem in communication is the illusion that it has taken place.” You cannot overcommunicate as long as its purposeful. Beyond regularly scheduled meetings, my recommendation is that you plan for your key communication interactions every week and modify daily. That planning coupled with your listening skills ensures communication happens rather than an illusion in your mind.

Ask yourself these kinds of questions. Have I set aside time to talk with my people on how things are going? Have I reinforced our company values?  When is the last time we talked about how the company is performing? Does everyone understand our value proposition?

Systems and Processes Matter

As Vice President of Business Services for Shell Oil, I led some big process redesigns as that was the era of business process reengineering.  There are numerous books on the subject if you are at that point to redesign your processes. Often, these books are geared towards larger companies. A simpler approach if you are just starting to think about processes is to view the Silver Fox Education Series (September 21, 2020) under Process & Systems. It is a basic primer for those not familiar with systems and processes.

In the 4 Stage Growth Model, the effectiveness and efficiency of business systems and processes improves as a company moves through the stages of growth.  No surprise as they represent how things get done.

When you first start your business usually processes are rather ad hoc and rarely written down.  As one progresses to the Growth stage, processes are often charted out and specified so people know what to do.  Then, with time the processes are continuously improved.  There may even be work on the bigger system on how the processes work together utilizing software programs.  At the Take Off stage, processes become an opportunity to really differentiate from the competitors.  Rethinking, simplifying, innovating, computerization, and so forth can make a difference.  By the Expansion stage, the processes and system architecture may require a further revamp to fit the volume and various new localities.

Organizational Roles Matter

The follow up to processes is organizational roles that outline who is responsible and accountable for getting things done.  Organizational structures have gotten a bad rap with many people suggesting for small companies you don’t need one. There is no doubt that overly bureaucratic structures can become an impediment particularly in this fast-paced world.  However, without role definitions of who is responsible and accountable there will be a lot of chaos and finger pointing on why things didn’t happen as planned.  These roles can be charted within your systems and processes because interfaces among roles can be the real goblin in the works. This leads directly to the next subject on teamwork.

But before that, let us go back to the 4 inner Ps of leadership model and talk about Proficiencies that make a difference in considering organizational roles. Strength-based leadership along with technical proficiencies should play a key role in deciding who plays what roles.  In other words, leadership capabilities are important for those having responsibility and accountability.

Teamwork Matters

In my book Develop a Leadership Plan Become a Great Leader, I say that “teamwork is a state of mind. It’s a cooperative attitude…” There are lots of books and articles on teamwork for those who want to go in depth.  John C Maxwell has several.  Patrick Lencioni’s book entitled The Five Dysfunctions of a Team: A Leadership Fable is still a good read

My Silver Fox Advisor colleague Doug Thorpe has given you a roadmap with his blog of October 8, 2020 on 6 Steps to Build Better Teams.

To sum it up, I love the quote in my book from Chief of Staff General Sullivan on his rule Leadership is a Team Sport. “Effective leaders forge alliances and build teams.  They break down walls, floors, and ceilings distributing leadership throughout the extended organization. Team building empowers people with a sense of responsibility…Effective leadership …is about unleashing the power of people.”

Capability Development Matters

As one progresses through the 4 Stage Growth model, the focus on developing your people’s capability grows on multiple fronts.  Training on specific job duties and activities takes on more formality. More attention is focused on developing people’s leadership capabilities through increased responsibility, accountability, and role expansion. A high priority is placed on learning and coaching one another as the organization vitality increases.

In the Silver Fox Advisors’ CEO Education Series of August 11, 2020 on Organization Effectiveness, I used these areas below as considerations for Capability Development.  Some are values to reinforce in the organization such Self-accountability, Achievement focused, Execution excellence, Process innovation, Outward looking, Forward-facing, and Performance driven.  Others are leadership activities such as Strategic Thinking, Coaching contagion, Relationship building, Organizational flexibility, and Learning culture.  Then there are those areas requiring knowledge and skill development such as Market knowledge, Leadership skills, and proficiencies in Execution excellence.  All these builds organizational capability.

Effective Direction                                                                                        Efficient Coordination

Market knowledge                                                                                       Relationship building

Strategic thinking                                                                                          Execution excellence

Leadership skills                                                                                            Process innovation

                                                                                                                         Organizational flexibility

High Motivation                                                                                            Ongoing Results

Self-accountability                                                                                       Outward looking

Achievement focused                                                                                  Learning culture

Coaching contagion                                                                                     Forward Facing                                                                                                                                                                         Performance driven

Culture Matters

As some offer, a business culture spans your vision, values, beliefs, norms, working style, tradition, and habits. You can see from the value list in Capability development above; culture has a huge influence on the Performance of your company. Being the leader, what you say and what you do matters.  It is always amazing to me the things people pick up on watching you and your behavior.

This is a big topic and rather amorphous to describe what you need to think of in building a positive culture as there are so many dimensions and nuances.  One thing is for sure—a bad culture kills performance. Virtually everything we have discussed in my blogs has an impact.

My only two recommendations here are first, think about the elements you want in pursuing the vision and values, plus when communicating, exhibit a sense of heart and purpose for your people. Secondly, in this world of accelerating and chaotic change, try to create a learning culture.  That will be a subject of a later blog.

Summary

Success comes from high performance.  The organization must have an uncanny focus on results. In my 3 P vernacular, Performance comes from  rich communications, highly functional systems & processes, clear organizational roles, powerful teamwork, significant capability development, and a positive culture synchronized with your emphasis on those things that matter to your People and your inspiring vision with executable plans and goals to get there.

The Planning Side of Leadership

A plan is simply charting where you want to go. As Lewis Carroll once said, “If you don’t know where you are going, then any road will get you there.” As a leader, you need to know where you want to go.  Some say the term leadership was derived from the old Norse word “laed,” meaning to determine the course of a ship.

Charting involves some form of a planning process.  You need a process that facilitates the journey.  In my corporate strategy course, the corporate planning process taught was rather rigorous as the challenges of large corporations are complex. As a former Vice President of Corporate Planning, I can attest to that complexity and modeling. But the Silver Fox Advisors focus on entrepreneurs and small businesses which is the viewpoint this blog will take.

Envisioning Stage

A planning process is a natural sequence of activities the first being envisioning the business.  What business do you want to be in and why (often termed purpose)?  What will that business look like in the future. i.e. what are you hoping to achieve (often termed vision)?  What is the path or pathways that will lead you there (often termed mission)?  You may have been operating for some time and never thought this through.  It is hard to be a good leader without being able to articulate this vision.

In fact, leaders are good at visioning. Recall the Strategic Thinking strength discussed under Proficiencies in the 4 Inner Ps of Leadership blog.  My experience is that many people have difficulty in expressing big picture visions.  However, when presented with one, most people provide helpful feedback and commentary on whether they want to be part of that journey. Common sense is to have dialogue with others about your ideas to enhance and bring forth a common purpose for the journey.

There is an outward perspective as above, but do not forget the internal perspective of how the organization functions and behaves.  I find most often that small businesses do not think through their values as an example.  These behavioral rules will form one way or the other, so ensure they are positively impacting the organization by thinking them through. Think about three areas: conduct (e.g. respect), performance (e.g. accountability), and attitudes (e.g. customer centric). Again, involving your people enhances and develops buy in for your values.

As the leader, you cannot over communicate and dialogue this journey with your People. Get them engaged and excited regularly.

Opportunity Assessment (SWOT)

Will the journey be worthwhile?  Said another way, what is the business opportunity? Why do you think your vision will attract customers? Leaders think positively about the future that helps inspire followers to join the ride.

The next big question is who are your competitors?  Many times, small businesses answer there is no real competition for what I offer or intend to offer.  That is naïve because even in the remote possibility it is true and the marketplace likes what you offer, there soon will be competitors. There is an assortment of other threats to be considered particularly having enough working capital to sustain the business and so forth.

Thus, there will be competitors.  What are your strengths that you will/can leverage to attract customers?  What weaknesses need to be shored up or repositioned so that you have a viable product/service in your targeted marketplace?

This is a fast-paced world so be sure get as much input from others in the dynamics of this marketplace.  Be brutally honest in this assessment but positive in your game plan on how to achieve the vision.

Game plan

This SWOT (strengths, weaknesses, opportunities, threats) will lead to creating your customer value proposition that differentiates your offering from the competition. How then will you make that a reality?  What is the game plan that enables you to win the customer and beat the competition?  In planning terminology, what are your basic strategies?  Normally, there will only be a handful of these strategies that are key to your success. Don’t over strategize or you will lose focus on what is critically important.

The key is to concentrate on what really makes you different and better for your targeted customers. Do we have a better product or service and in what way (i.e. Product leadership)? Are we going to be more affordable by having some streamlined operations (i.e. Operational excellence)? Can we distribute or provide the product or service in a new way (i.e. Customer innovation)?  How will we attract customers via branding and what channels will we use to reach them (i.e. Marketing)?  How are we going to be more responsive to customers’ needs (i.e. Customer solutions)?  How will we raise or generate sufficient cash to run the business (i.e. Financial)?

Then, you need to put your action plans together. Given these strategies, what are the most important things that need to happen now, short term, and longer horizon? Again, be extremely focused on these tactics.  What is the objective to be accomplished?  Who is going to do it and be responsible that it happens? When will it be done and what are your checkpoints?

Think about strength-based leadership in formulating these action plans.  Get those who are going to be involved engaged in the specifics of what, why, and how. Remember that participative management leads to better performance.

Execution

Of course, the leader of a small business must be involved in the implementation of these game plans.  We will address this in a future blog the Performance side of Leadership. Keep the 3 Ps of People, Planning, and Performance top of mind. Planning is the catalyst that leads People to Performance.

Performance Feedback and Course Adjustment

The planning process is circular in nature.  Success rarely happens without continuously reviewing how you are Performing. Create a regular schedule to assess both your financials and action plans, monthly generally works well but at least quarterly.  Live your values in these meetings without demeaning people.  Think being objective. Make them more than status reports; chart out new actions as the situation dictates.  Celebrate success.

As a leader, address major opportunities, threats, and problems as they occur.  Be quick to react and when possible proact. Create separate sessions to address bigger picture topics or specific issues. Covid 19 is a good example.  Leadership agility has become critical in this world of accelerating and chaotic change.  We will share our thoughts on leadership agility and other adaptive skills in a future blog.

Ending Thoughts

In summary, the small business owner or CEO needs to be sure there is a planning process to set the course of direction.  Otherwise, there is just day to day fire fighting with little growth and questionable viability. My 4 Stage Growth Model for Small Businesses (blog post October 8, 2020) provides a great deal of insight into what you should focus on to progress to the next level.

Planning in small business cannot be a rigid structure.  Yet, you must write down your plans even in bullet form on paper and make it evergreen.  Otherwise, they just drift away.

There are those who question anything associated with planning/thinking beyond a couple months and perhaps annual arguing the world is moving too fast. Certainly, the cycle time of your business makes a difference, but for me that advice is rather naïve.  Envisioning will have a longer-term horizon.  You need specific plans for the here and now. But I find most business forget the mid-term.  What will be our next stage to bridge to our longer-term vision?  That is where the 4 Stage Growth Model can be helpful.  Identify the critical success factors needed to move up the growth curve.

Even though the activities of planning have a sequential logic, think of the process as parallel processing in real time shifting focus as the situation dictates.  Leadership shows forethought rather than panic.

advisory board

The People Side of Leadership

In a previous blog on September 15, 2020, we looked at my 3 P Leadership Framework: People, Planning, and Performance. This blog goes more in-depth on the People side.

I am asked by small business owners for the best current leadership books to read that are concise and insightful. That is a good question and I say something like John Maxwell’s LEADERSHIFT The Essential Changes Every Leader Must Embrace. Given the accelerating pace of change in today’s business world, Maxwell does offer real insight.

In giving this response, I often think how much foundational insights are lost that really ground a person becoming a good if not great leader. Many key thoughts on leadership were not created these past couple years. Here are some key foundational insights that I think matter:

Beliefs in People matter

I believe modern leadership theory really began with Douglas Mc Gregor’s 1960 book entitled The Human Side of Enterprise in which he laid out two opposing theories on perceiving and motivating employees.

In simple terms, in Theory X the manager/leader believes employees have little desire for work other than the paycheck.  In Theory Y, people are internally motivated requiring less direction and control. In my opinion, these beliefs can become self-fulfilling prophecies and lead to different leadership styles. 

With Theory X assumptions of People, leaders will tend to be autocratic telling people what to do with little discretion.  Those with Theory Y beliefs will tend to give employees more freedom and bring them into the decision-making process.

We talked about beliefs as part of Persuasion in my 4 Inner Ps of Leadership blog of October 30, 2020. Clearly this belief around people’s internal motivation is critical to a successful relationship with your employees.

Leadership styles matter

Researchers picked up on the idea of different leadership styles.  Rensis Likert found four different styles whose titles accurately explain the approach: Exploitative Authoritative, Benevolent Authoritative, Consultative System, and Participative System. 

The punch line is the Performance of the organizations went from Exploitative Authoritative being the worst improving up the scale with the Participative System being the best.  His book The Human Organization published in 1967 still sits in my library.

Also, in the 1960s, Blake and Mouton published their Managerial Grid or better said Leadership Grid with two key dimensions: Concern for People and Concern for Results (i.e. Performance).  So, there you have two of the 3 Ps.  A style that was low on both dimensions, called impoverished management brings disharmony, disorganization, and dissatisfaction.  

In their lingo, the Produce or Perish style focusing high on results but low on concern for people breeds an authoritarian.  The high on concern for people and low on concern for results is labeled Country Club Management and as expected, produces low results with lack of direction and control.  

Interestingly, taking a Middle of the Road approach ends up with only mediocre performance.  The best, which they described as the Team Management having a high concern for both People and Performance, has a leader with a Theory Y belief and participative style- no surprise.

As we discussed in the recent blog on the 4 Inner Ps of Leadership, leadership style as part of your Personality has a significant impact.  Know your style and how you are relating to your People.

Trust matters

We described in my earlier blog on the 3 Ps of Leadership the Zenger and Folkman’s leadership model of a tent.  Character was described as the pole that holds up the tent of the other four stakes: personal capability, focus on results, leading organizational change, and interpersonal relationships. It is the centerpiece.

As Warren Bennis, one of the great leadership thinkers once said, “real leaders, and people of strong character, generate and sustain trust.” There are many elements that build trust such as doing what you say you are going to do.

In other words, People can count on you. On the People side, showing respect and listening goes a long way. Lots more could be said on character and trust, but you can generally see it and feel it when observing someone’s behaviors and actions.

Back on the Inner 4 Ps of Leadership, Persuasions have a fundamental impact on your interpersonal relationships.  If you lack a strong moral compass, People will be extremely cautious on what you ask them to do and why. As highlighted in the blog, Personal Purpose can be a guidepost in building your character.

People’s needs matter

In my psychology class, we discussed Maslow’s hierarchy of needs, one of the most influential models for me in understanding People.  You probably have heard of his theory that there are five levels of needs beginning with physiological (i.e. surviving) followed by safety, love and belonging (social), esteem or ego, and self-actualization. 

People move up this hierarchy and are motivated by the level they have reached.  If they are driven back down, they are demotivated.

Herzberg outlined this back in 1959 (in his Two Factor Theory of Motivation) as Hygiene factors such as pay, company policies, fringe benefits, physical working conditions, status, and interpersonal relations. 

In these hygiene factors you can become dissatisfied, but they are not big motivators.  He saw motivational factors as recognition, sense of achievement, growth and promotional opportunity, responsibility, and meaningfulness of the work. Even sixty years later, Herzberg had a lot of insight into what needs motivate People.

Back to Maslow, in my opinion as a society here in the United States we have generally risen to the level of ego needs.  As some say, we are in the “me” generation.  People want a job experience tailored for them and their desires.  A hundred years ago they primarily just wanted a job. Some would argue that People driven by self-actualization are emerging.  They can provide powerful results if your offering fits their needs.

There are a couple dimensions of the 4 Inner Ps of Leadership that support understanding your Peoples’ needs.  In the former blog, we discussed under Persuasions the importance of understanding others’ perspectives that drive their behavior. Then your leadership skills come into play.

In Proficiencies, strengths in Rath and Conchie’s domains of Influencing and Relationship Building not only help you understand others needs but can help you in addressing them.  Ultimately, that will lead to value propositions.

Value Propositions matter

In my book, Develop a Leadership Plan: Become a Great Leader I advocate that value propositions are needed for all your key stakeholders.  Of course, we all recognize the need for an impactful value proposition to attract customers.  The same can be said of your employees and leadership team. What do you offer that makes them want to work for you and your company?  How does that compare to your competition?

For an organization, I see value propositions as layered.  At the highest level, what is your value proposition for the whole organization?  This will include bigger picture ideas such as vision but also the values, empowerment, and other hygiene and motivational factors that People can expect. 

Then, at the individual level, what is your value proposition for specific people? How do you get the best that People can provide, and the organization needs? These tailorings will generally fit into Herzberg’s motivational factors with recognition, sense of achievement, growth and promotional opportunity, and the meaningfulness of work.

Do not forget their participation in decision making and engaging in the direction and vision of the business.

Depending on the size of the organization, there may need to be mid-level value propositions.   These are specific offerings for different types of work groups.

Incidentally, John Maxwell does a great job talking about leaders adding value in his book on LEADERSHIFT.

Bottom line, as a small business owner/CEO you are the boss, but to become really successful you will need to become a leader.  Think about People first.  Think about what matters to them.  In Servant Leadership vernacular, how can you serve them first such that it makes them want to follow you on a common purpose.  In a future blog, we will provide some Reflections on Servant Leadership.

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