Do Small Businesses Need To Worry About Leadership?

Small businesses can survive when led by owners with an unshakeable will to succeed. But to grow a business, the director must develop leadership in both themselves and others to continually focus on the objectives of the business through well developed planning and implementation.

A lack of strong leadership creates an unstructured and ‘reactive' climate where the focus is solely on getting products and services out the door. Sustainable growth however needs strong leadership skills that include both solid business planning and emotional intelligence.

It is careful planning that will state the business objectives and ensure that the ‘product does gets out the door' in a measured and predictable way, but
It takes strong leadership to drive, monitor and measure staff to focus on the business objectives, but also emotional intelligence to perceive disharmony and address issues that might affect productivity.

The purpose of good leadership skills is to ensure that employees understand the company's plan and recognise that their performance impacts on its success. But if there's no visible plan, there is no goal to which staff can be led.

Who are potential leaders? They can be anyone who has the ability to influence staff in a positive and productive way. Leadership skills are not always apparent and may only reveal themselves when the potential for leadership is ‘unlocked'. However the ‘knock on' affect of good leadership cannot be overstated.

A good leader:

aligns tasks to the business plan;
gives clear and definite direction;
makes their expectations very clear;
allows staff to make (calculated) mistakes;
develops ‘ownership' of the goal to build a culture of self‑motivation;
encourages innovation;
recognises outstanding achievements;
frequently measures performance and feeds back the results.

Once parameters within the business are understood staff will align their work with the objectives of the business plan. This is the foundation of efficiency.

The time to nurture leaders is ... Now!

Working ‘on' your business as well as ‘in' your business is just as vital for growth as supplying your product on time. The owner of a small business must either develop leadership skills in themselves or in someone who they trust to make decisions and run their business: their sustainability depends on it.

Working for a company that has no plan or leadership is like playing a sport without rules or a captain. Everyone is ‘busy' on the field yet no one knows how to score.

Is nurturing leaders so time‑consuming? It need not be if your approach is systematic;

Step 1 - Revisit and refine your business plan

At the least it should:

clearly define the company's vision, shared values, and 12‑month objectives;
build awareness of how staff behaviour affects the pursuit of business goals;
make a firm commitment to improve the quality of products/services;
encourage transparency and relentless communication; and
develop the tools required for frequently measuring performance (visual management).

Step 2 - Share the business plan with staff

Many owners don't distribute the relevant aspects of the business plan to staff, thinking it serves no purpose. The opposite is true: if staff are shown the business plan - and better yet, get involved in its development - they will ‘buy into' both the plan and its execution.

Improved processes and self motivation are the outcomes of transparency and consultation. A culture of personal responsibility will take root, underpinning the growth of the company.

Best‑practice leadership models encourage innovations initiated by employees. The world famous Toyota Production System is a model currently being adopted by some Australian manufacturers, not only to allow for the innovative suggestions by their staff but often has ‘innovation' written into staff performance agreements.

Japanese car manufacturers adopt a methodical, measured approach to business that flattens the hierarchy and encourages their leaders to ‘coach' operational staff and to continually look at their own processes and perfect the ‘flow' of the work they perform.

Step 3 - Encourage and coach relevant staff to improve their own skills

This includes:

convening regular meetings at which leaders can address their co‑workers;
creating project-orientated teams under a leader whose personal example will encourage improvements in performance; and
recognise exceptional staff who exceed performance targets.

In short, the owner of a small business can lead their operation just so far. To grow, they must nurture leadership skills, stay close to the business plan and continually communicate expectations and recognise improved performance. Make no mistake, the company objectives will be achieved if the messages and definiteness of purpose is communicated very clearly with respect and consideration for all who work for them.

A systematic approach to the business where all stakeholders enrol in the business goals of the company not only promotes business growth but a greater sense of purpose for those who contributed to these goals.

It all starts with recognising the need for leadership.

Post your comment or query on the CEO Forum discussion board
Click here

Diana Ginty is Director of Leader Capital, a Sydney-based boutique leadership‑development firm specialising in the growth of small and medium-sized businesses. Leader Capital implements the BOGART Program (Business Vision, Objectives, Goals, Awareness, Responsibility and Traceable steps). Website: http://www.leadercapital.com.au/. Email: info@leadercapital.com.au. Telephone: 0406 906 781.
First published: 16 July 2007.
Last updated: 16 July 2007.