What’s ‘Small’ about a Small Business?

Small businesses are the ‘acorns of today that can grow into the oaks of tomorrow’ and the word ‘small; can detract from the core factors that drive sustainable growth in this sector. Most people in small business have ‘big’ dreams, make ‘big’ commitments, often have to compete with ‘bigger’ organisations, and constantly have to make ‘big’ decisions trying to balance risk and reward that directly impact their personal survival. In fact the only thing small about small business, compared to their big business counterparts is the number of people who work in the organisation – since some ‘small’ businesses have greater turnover and profit figures than other ‘bigger’ businesses.

I’ve had the pleasure of meeting some truly inspirational ‘small’ business owners over the years who have been prepared to sacrifice so much to achieve their business dreams and goals. They are the forgotten hero’s in a way, as we read in the press of way too many top corporate CEO’s with their multi-million dollar, pound or rupee contracts, topped up by ludicrous bonuses who, like fallen angels, usurp their corporate and social responsibility for personal power and greed and then get a golden parachute for their crimes.

Not so for the ‘small’ business owner who, especially in the early years, can sacrifice so much just to have that opportunity to achieve that special, personal vision. The dream itself, as it often starts that way, can appear in a moment of inspiration or be something that the individual entrepreneur has been ‘toying’ with for years.  It can be as simple as believing you’ve found a potential niche target market; or a unique or differentiated product or service offering; or just wanting to do something that’s ‘yours’.

We must never forget that it takes courage to start up a small business – giving up the certainty of a monthly salary payment (though some may rightly argue that there is no guarantee of that these days); the benefits that go with it, including paid holidays that you don’t have when you’re your own boss. Some may also argue that, these days, people are forced to start up a small business as job opportunities are so few and far between and it has nothing to do with ‘dreams’ and ‘visions’ but simple survival, and maybe in a sense that is true for some (a small few) – but it doesn’t detract from the courage it takes to make that first step and the commitment and sacrifice that is then required just to get the organisation going.

Most small business owners are fully tested along the way, in respect of their commitment to their dream – managing their time effectively, managing their cash flow, dealing with those few bad debts, learning to deal with disappointment, finding employees and suppliers they can trust and rely on, and most importantly trying to balance their family life, which can suffer in the early years. Since, as Peter Drucker said, "in every success story, you will find someone who has made a courageous decision."   

In fact the worst thing small business owners can do is to think small and think that being small takes less effort and is therefore easier than big business – as that will be your downfall. I would suggest that “it’s what’s in you, and what drives you” that will ultimately define if you are going to be a successful small business owner, since as Bill Gates said, “to win big, you sometimes have to take big risks.”

So a few basic tips would include;

1)     You need to quickly build the right support structure around you that you can ask for advice, where sometimes it may not be the advice you want to hear, but is the advice you need to be told. Since one of the few dangers of being a small business owner is that you can sometimes be driven by your heart rather than your head. 

2)     Don’t burn your bridges. As I was once told, treat everyone as if they were your priest. The only time that rule doesn’t apply is if you meet unethical people – which unfortunately will happen, then move on quickly and don’t sacrifice your values as it will sooner or later detract from your own brand and image.

3)     Accept that you will be disappointed along the way and that the goal is the ‘dream’ itself rather than a difficult point in time getting there.

4)     Don’t keep your stresses and concerns on the inside, be open with friends and family, as stress not only takes your eye off the ball, but ultimately affects your health as well.

5)     Never be jealous of other people’s success – as Ray Kroc said "press on. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

6)     Then as I say to everyone – just enjoy the experience and the opportunity as you only live once.

"The size of your success is measured by the strength of your desire, the size of your dream and how you handle disappointment along the way." – Robert Kiyosaki

Are You an Individually Focused Leader?

In the context of team leadership, “individual focused-leadership is grounded in situational leadership theories and leader-member exchange theory (LMX). These theories suggest that effective leaders vary their behaviour on the basis of follower’s individual differences (e.g. abilities) and contextual factors (e.g. resources, task structure) resulting in differentiated leadership of group members. The influence target in this case is individual members rather than the whole group (or team),” (Wu, J.B., Tsui, A.S. and Kinicki, A.J., 2010, p.93).

These individually focused leaders respond to the needs of their ‘team’ to help develop them and support their individual performance and motivation; which mustn’t be confused with poor or ineffective leadership, where the individual style is based on ‘favourites’ and avoidance of uncomfortable situations or conflict. Where if you’re not liked by the ‘pretend’ leader, then you are ostracised and set up for failure.

As Joshua Wu, Anne Tsui and Angelo Kinicki highlight “followers under the influence of individual-focused leadership are likely to develop close, direct, and unique relationships with their leaders that are characterised by mutual trust, support, satisfaction and interpersonal attraction. As a result, followers are more likely to incorporate the leader into their self-concepts and to identify with him or her – that is leader identification occurs,” (p.93).

As with many theories on leadership, they appear obvious on the surface and yet, if this was really true, one would have to ask why this form of leadership doesn’t happen more in practice. One reason is simply that the leader has to have the proven and practical experience, knowledge and skills to perform the role, for it to be really effective. One key driver is ‘honest confidence’, where the leader ‘really’ knows themself and has sufficient experience working with people to be able to recognise and understand, very quickly, what drives the different individuals in their team or organisation. 

This experience will only come from having had the ‘privilege’ to be led by a great leader, to learn the approaches and skills that help motivate individuals to develop and perform to their optimum. Without the right exposure and experience it isn’t that easy to just ‘jump’ in and take on an effective individually focused leadership role.

This doesn’t mean if you haven’t be led by a great leader, you won’t become an effective leader yourself – but what it does mean is that you first have to recognise that you haven’t been exposed to effective leadership styles (or parts thereof) and to identify from the ‘bad’, what the right approach should be.

Having time to engage one-on-one with your team (followers) is a prerequisite that is non-negotiable – where this time is sufficient to discuss all the key issues that need discussing; the process is formal and not casual; and the meetings are regular.

The biggest mistake that you can make is not to spend the time to understand the individuals under your ‘charge’; what their expectations are, how they like to be communicated with and what makes them tick. I constantly find that too many leaders don’t spend enough time to discuss expectations and for some reason, just assume they know what they are, which leads to problems down the line when priorities get confused. 

What’s important about focusing on individual focused leadership is that it forces us to consider two parallel processes – firstly the collective nature and performance of the ‘whole’ (the team) and secondly the teams individual members.

It’s also important to recognise that “although previous leader-member exchange research rests on the assumption that developing unique leader-member relationships in a group is likely to create sub-groups and may be detrimental to group work, there is actually no empirical evidence to support this assumption,” (Wu, J.B., Tsui, A.S. and Kinicki, A.J., 2010, p.101).

What makes individual focused leadership work is simply the quality of the leader-member relationship, as perceived by the followers; since the central argument of situational leadership theories is that leaders need to exhibit different behaviours to fit the different characteristics and situational factors of their individual followers.

References

Wu, J.B., Tsui, A.S. and Kinicki, A.J. (2010). Consequences of Differentiated Leadership in Groups. Academy of Management Journal, Vol. 53, No.1, p.90-106.

How Do You Get the ‘Best’ Out of Someone?

I’m reminded of a very old Gatorade commercial with the words;

“It’s not where you’re from – it’s where you’re going,

It’s not what you drive – it’s what drives you,

It’s not what’s on you – it’s what’s in you,

It’s not what you think – it’s what you know.”

As businesses around the world continue to deal with the on-going global financial crisis, have business owners and managers forgotten the art of getting the best out of their people. Even in times of economic hardship work shouldn’t be a chore, but should actually be enjoyable, but it seems too many organisations are in such a ‘rush’ these days that they’ve forgotten to look after their most vital resource – their human resource.

Of course the first assumption is that organisations are making sure they recruit the right people for the right jobs, where they actually spend the required time assessing what each job function should be and the person they need to fill it (before they fill it) - something, that as crazy as it sounds, doesn’t get enough attention, where it’s assumed job specs are the same today as they were last year, which simply may not be true.

But once you place the right person in the job, it’s your responsibility to get the best out of them, making the job and their career development an enjoyable experience for them, where you not only utilise their skills to the full but develop that latent potential that’s just waiting to shine.

But as with many things in life – it’s easier to write or say the words than to implement them, which is where so many organisations go wrong.

What you need to get the best out of someone are the following;

1)     The right person in the right job;

2)     The right person in the right organisation, where the organisational culture and leadership allow the employee to ‘feel at home’ and develop without fear;

3)     The time to get to know them – what makes them ‘tick’, what drives them, how best to manage and communicate with them (an area that is too often forgotten and where the problems begin).

4)     Don’t assume that what drives you, drives everybody else;

5)     A culture which is open and honest, and where employees can have two way conversations with management about the organisation, their job and their future;

6)     Not expecting everyone to be the same and treating each individual as exactly that – an individual;

7)     Accept everyone has bad days;

8)     That “an idea can turn to dust or magic depending on the talent that rubs against it,” (Bill Bernbach); and

9)     “If you haven’t got the time to do it right, when will you find the time to do it over?” (Jeffrey Mayer).

There seems to be too much talk about doing the right thing in business but not enough action to make it happen – it appears to me that most leaders and managers can tell you the right things to do, but are just bad at implementing them. Maybe because they don’t have all the skills or confidence to make it happen or it’s the ‘time card’ where people don’t have enough time (to do the right thing) or most importantly a reluctance to ask for help - since as Stephen Covey said, “one of the few things that can’t be recycled is wasted time” and in my experience ‘we’ are wasting too much of it.

The outcome of all this is that organisations are not getting the best out of their employees, and in the process de-motivating them as well – where work becomes a chore, no longer enjoyable and simply a means to pay the bills.

Thus keeping your head down and just getting on with it can be the order of the day. But this should be a concern to leaders at any time, but especially during a time when organisations are looking for innovative ideas to improve organisational performance and where the best place to get them is often your own people. If you haven’t spent the time to create an organisational culture and leadership style that gets the best out of your people then you are simple losing out and regardless of your bottom-line are not optimising organisational performance.

So if you assume you made the right decision in recruiting the right people, then trust your judgement and now spend the time to create the environment where you can get the best out of them and they can get the best out of themselves – you (and your shareholders) will be very pleasantly surprised with the outcome.

Remember “the biggest mistake you can make is continually fearing that you will make one.”

Will Your Business Strategy Leave a Legacy?

When asked, what would you like your legacy to be? Richard Branson is quoted as saying, “to have created one of the most respected companies in the world. Not necessarily the biggest,” But in general it seems to be a question that is rarely thought about and even less discussed in today’s business world. I wonder why that is? Is it that it can appear arrogant to talk about things we’d like to leave behind or is it that it makes us think of our own mortality? Or is it that we are so busy looking at short-term strategies and surviving day-to-day that it doesn’t even make a blip on our radar screens?

Some will argue, of course, that leaving a legacy isn’t as important as how we ‘do business today’, where “time is a companion that goes with us on a journey. It reminds us to cherish each moment, because it will never come again. What we leave behind is not as important as how we have lived.”

But with the constant churn of unethical business practices, seemingly becoming the rule rather than the exception - maybe we need to focus on leaving a positive business legacy that can actually help organisations create long-term sustainable business strategies and sustainable growth.

There’s no doubt that globally we need organisations that can be sustainable and able to generate new ‘secure’ employment for our increasing workforce. We need ‘regulated’ financial services that can support business and look long-term, as well as short-term. We need more than just good leadership, we need great leadership; people who can motivate and invigorate the innovative ideas that will grow business around the world and inspire their staff to be the best they can be. And as William Shakespeare said “no legacy is so rich as honesty.”

Maybe part of the problem is that organisations, or rather business owners, are losing sight of their ‘long-term’ vision, as they are forced to develop short-term strategies to compete. Thirty years ago strategic plans were developed for three to five year windows, but that time scale has dramatically changed since then with the development of the ‘global’ economy - where today most strategies look at 12 month windows, with some in the technology sector being so dynamic that their strategies are developing and changing on a real-time basis.

The problem with this, from the legacy perspective, is that your ‘long-term vision’ encompasses your business legacy as well, but if your vision is no longer long-term, it’s possible that you’re not ‘defining’ a legacy at all.

What seems to have happened is that short-term strategies have replaced long-term visions, meaning that the overall future objective is lost as organisations ‘squabble for the moment’. But organisations, regardless of size, need both; short-term strategies that focus on the ever changing market, and long-term visions that set the long-term objectives for the organisation. The purpose then of short-term strategy is to ensure the organisation is on the right path to meet their long-term vision and associated objectives, which is where the legacy will be found.

Henry Ford, for example, was both a visionary and a realist, and an excellent example of strong creative tension. In most organisations, when the tension on that rubber band is too much, we do one of two things: We either lower our vision or we overestimate current reality. Ford's vision made him famous. He believed there could be a car in front of every house; and he saw what had to happen to get there.

Ford's process vision was based on the continuous and waste-free flow of material all the way from the iron ore mine to the customer. His people vision was based on a capable, trained and motivated workforce that worked in a coordinated way and was also able to afford the products that the factory made. Any one piece of that vision was incomplete; together they were dynamite. His legacy may not have been fulfilled by all organisations around the world, but his vision is the right one to follow and his ‘legacy statement’ one to be admired.

But the question remains – in today’s hectic global marketplace have you lost sight of your future vision and in doing so have you lost your focus on leaving a legacy that will make a positive difference, however small that difference may be? Legacy and sustainable growth ‘are joined at the hip’. Organisations must have a long-term goal, even if to get there they need dynamic short-term strategies, and in striving to get there you define your legacy, whether as an individual or as a whole organisation.

“If your actions create a legacy that inspires others to dream more, learn more, do more and become more, then, you are an excellent leader” - Dolly Parton.