The Facts of Business Life (10 page)

There are essentially five characteristics of great leaders. The first of these is being flexible. Not everything goes as planned. Competitors change tactics, governments force new regulations on business, strikes stop the flow of products, and, occasionally, natural disasters occur. And at times like these, leaders have to be able to change course; that is, first make sure their businesses will survive, and then find a new way to reach their goals. The second characteristic is being able to communicate. Some leaders are great orators, but speaking well isn't all that's required of a leader. As we all know, there are lots of people who talk a great game but deliver nothing. Leaders who communicate well are those who not only share their thoughts with employees, but also let their strength and personal character show through in their communication, and empower those who work for them by defining the company's goal and showing how to get there. A third characteristic of great leaders—or, perhaps, group of characteristics—is having courage, tenacity, and patience. Having the courage to stand alone, the tenacity to not succumb to pressure, and the patience to keep fighting until you win the day—and sometimes being able to do all three at the same time—is something you will have to develop if you want to be a true and successful leader.

The fourth necessary characteristic is the combination of humility and presence. Acting aloof, or above your employees, does not make a leader. Leaders have to be able to talk and listen to their employees on all levels of the company. At the same time, they must have the respect of their employees, the kind of respect that's earned by being honest, having integrity, and being tough but fair. The fifth and final characteristic of a successful leader is being responsible. A business owner has to realize that, as the saying goes, “A skunk stinks from the head down,” and a business does too. This means when there is blame to be accepted, the owner must be the first one to accept it. But it also means that when accolades are appropriate, they should be spread out among the employees. And when this happens, a leader is born.

The Benefits of Leadership

• Being a leader enables you to be effective and efficient in determining your company's destination and creating a team that focuses on getting it there.
  
• Being a leader means defining and exhibiting moral and ethical courage and setting an example for everyone in the company.
  
• Being a leader helps you teach leadership skills to your employees, who will then help do the “heavy lifting” of moving the company from where it is today to where it needs to be in the future.
  
• Being a leader enables you to recruit, hire, and promote employees who demonstrate leadership abilities.
  
• Being a leader forces you to analyze your own strengths and weaknesses, as well as those of the company, and enables you to develop a good sense of reality.
  
• Being a leader helps you dictate appropriate employee conduct while, at the same time, preventing employees from being too tough, ruthless, or mean to other members of the staff.
  
• Being a leader helps you emphasize the value of the company's customers, how they are treated, and the importance of their returning.
  

The Realities of Leadership

• Your company can meet the goals you establish only if you lead the way by motivating and encouraging your employees to become a coordinated team focused on the destination.
  
• When you are leading your company into a “New Frontier,” because neither you nor your employees have been there before, mistakes, miscues, and inexperience add to the challenge, and your leadership is key to meeting that challenge.
  
• You have to understand and be good enough at leadership to teach it to your employees, both by example and by coaching. The more leaders you can develop, the stronger the business will be, and the less you will have to worry about how the business is operating.
  

In exhibiting leadership, there are essentially three things you must accomplish if you hope to make the company a success. These three things don't represent every facet of leadership, but they do form the foundation on which leadership is built and are an integral part of leadership at every level. The first of these is achieving the objective. This is not something you, or anyone, can do alone, which means you will have to work with others to accomplish it. The second is building and maintaining the team. Saying you need a team to accomplish something is one thing, but developing one, and consistently encouraging and motivating it, is something else, and something you must do. The third and final thing you have to do is develop individuals within the company. In order to accomplish this, you must lead by example, teach employees what leadership means so they can teach their direct reports, establish an environment for success by eliminating excuses, recognize when jobs are well done, have the courage to make the tough calls, and encourage empowerment within certain parameters, among others.

Leadership may mean different things to different people, but in a business, leadership must always start with the owner, who has to define exactly what leadership means to him or her, and then decide what success means to the business. However, being a leader also means articulating that vision to everyone else in the company, convincing them of its importance, and encouraging and motivating them to work together to achieve it. And while doing so may come more naturally to some than to others, it's never easy. In fact, as Vince Lombardi, the legendary Green Bay Packers coach, once said, “Contrary to the opinion of many people, leaders are not born. Leaders are made, and they are made by effort and hard work.” If you want to give your business a good start toward success, it has to start with leadership, and leadership has to start with you.

Leadership is, of course, usually thought of as one individual providing guidance and/or direction to a group of other individuals. At Level 1, though, because there is no business yet, and there are no employees, there are no individuals other than you. That does not mean, however, that leadership doesn't play an important role at this level. In fact, it plays a critical role, because if you do not exercise leadership, there will never be a business. It's leadership, in the form of what I refer to as ownership and opportunity, that ultimately leads to the creation of a business.

As the name of this level suggests, it is somewhat different than the other four in the business life cycle because it essentially consists of two parts. The first of these, ownership, is the part during which you must decide whether being an owner is right for you. This also applies to current owners who are considering expanding their businesses or buying new companies. The second, opportunity, takes place only if and when you decide that ownership is right for you and is when you determine exactly where your best opportunity lies and how you can best exploit it. Both parts, however, rely on the leadership skill of analysis; that is, the ability to analyze yourself as well as a variety of opportunities, and then choose the one that's best for you. Unfortunately, although these analyses are an important first step, many owners don't take the time to do them because they underestimate the advantages of conducting them.

The Benefits of Leadership at Level 1

• Being a leader enables you to determine whether ownership is really for you.
  
• Being a leader helps you develop a vision of “what could be,” that is, what success will look like.
  
• Being a leader provides you with fact-based information on the market and on your own needs.
  
• Being a leader requires you to collect and analyze information, which contributes to your being more confident in your ability to lead, manage, and grow a business.
  
• Being a leader keeps you from underestimating the challenges you must face in starting or expanding a business.
  
• Being a leader enables you to understand more clearly the kinds of opportunities that would be most beneficial for you.
  
• Being a leader provides you with an understanding of the key personal characteristics you need, such as competitiveness, discipline, and commitment.
  
• Leadership keeps you focused on what success means.
  

Nothing worthwhile happens without leadership. That's a bold statement, but one that's easy to defend, particularly in regard to Level 1. Without leadership there is no vision or success destination. Without leadership there is no assessment of your current reality, such as what obstacles or opportunities may lie ahead in the marketplace, how much working capital you will need to get started, and how you will hire and train employees, among many others. And without leadership there is no one pointing the company in the right direction. Leadership means action, and action means results. And for the business owner, leadership has to begin at Level 1 because if you get this level wrong, chances are that very little will work out the way you'd like it to.

There are three key leadership qualities that are particularly necessary at Level 1: (1) the ability to analyze yourself and to be realistic about your strengths and weaknesses, (2) the experience necessary to intelligently evaluate an opportunity, and (3) the strength to remove assumptions and emotions from the decision-making process and rely entirely on facts. Level 1 is not, however, the only place where these leadership qualities are needed. In fact, they are important qualities that an owner will use throughout his or her ownership career, and owners have to demonstrate these qualities beginning at the Ownership and Opportunity level of a company's life cycle.

Since this level of the business life cycle has two parts, it requires you to meet two different objectives or goals. The first, as I mentioned earlier, is determining whether ownership is right for you. In order to accomplish this, it is necessary for you to answer three key questions:

These are important questions, and answering them honestly takes a prospective owner—or, for that matter, an experienced one—a lot of soul searching. It requires a kind of self-analysis that you may have never conducted before, but it is a critical part of the process. In fact, if you don't answer these questions honestly, and decide mistakenly that ownership is what you want, regardless of how promising an opportunity may appear, you will lack the passion needed to drive a business toward success, meaning, at best, the business and you will struggle. However, if after careful self-analysis you correctly decide ownership is for you, this self-analysis will help you visualize the kind of opportunity that would be best for you.

Once the ownership issue is decided, the goal is to decide what opportunities may be available to you and which you may have to create. You should bear in mind, though, that opportunity seldom falls in your lap. In most cases you have to create it. This is an important point, and one that new owners as well as owners looking to expand their businesses must take into account. For everyone who chooses ownership as a career, selecting the right opportunity is one of the most challenging aspects of the process, primarily because there are some opportunities that are questionable at best, and some that are certain to fail. The challenge is separating the good from the bad and the legitimate from the phony. This is why the focus on leadership and analysis at this level is so important—you want to get this right because there is little room for error.

Although it is important to review Level 1 for all the Facts of Business Life before you make an ownership or opportunity decision, as far as leadership is concerned there are essentially two questions you must ask yourself: (1) does the product or service I am considering have a long life span or life cycle, and(2) can a business selling this product or service make continuously sufficient profits? That is, is the reward worth the risk? There will be other questions that have to be answered before you make a final decision, but if you can't answer “yes” to both of these in regard to any particular opportunity; there is no point in pursuing it.

“Sufficient profits” is an important phrase, and one that is open to interpretation. Whether profits are considered to be sufficient is usually based on how much is needed to pay off the initial debt and to keep the business running for an extended period of time. But when you are answering this question, it's also important to take your personal concerns into account. If all you want is a business that will enable you to pay your bills and go out to dinner once a month, it would probably be relatively easy to find one. But you probably want more than that out of your own company, including the fun of owning and operating a continually successful business, and the ability to enjoy the freedoms that a significantly profitable business can provide. And if that's what you're looking for in becoming an owner, it is essential that you do the kind of thoughtful research and analysis at this level that will enable you to achieve it.