On Your Business: Why Small Businesses Need a Leadership Team
It is not uncommon that business owners who are the president and CEO also assume the roles of COO, CFO, CMO, and more. After all, that person was the founder—and likely the sole employee—during the company’s infancy. Although holding on to these roles is a great way to manage costs, ensure consistency, and maintain accountability, it can also be the root of many organizational problems and the biggest obstacle to growth and long-term success.
Considering the popular business philosophy that growth comes when “working on your business, not in your business” and success is marked by “building a business that doesn’t rely on the owner’s day-to-day involvement,” can either of these aspirational goals be reached without investing in a trusted team of leaders who can be relied upon to be a foundation for the business?
Plan for Success
Many business owners/CEOs struggle with the concept of investing in others with fear of being vulnerable or the perception that their replacement in elevated roles could not be as effective. This apprehension may be a result of actual experience; however, one should question whether those undesirable outcomes were a function of the CEO’s own doing. Were the individuals being asked to take on new roles truly given the opportunity to succeed or were they set up to fail?
To develop a team that can be trusted and relied upon, it is important to start by implementing effective management strategies. Consider the following guidelines, which can serve as an effective learning process for both parties:
• Establish realistic goals.
• Clearly define tasks, expectations, and desired outcomes.
• Provide ample training or preparation to take on a role.
• Empower team members to think for themselves, make mistakes, and learn personally and professionally.
• Provide positive feedback and encouragement rather than scrutinizing efforts or micromanaging.
While concerns for business owners and CEOs loom around the notion of relinquishing power, extending trust, and turning over decision-making authority to others, the alternative of not making such a commitment and continuing to be the jack-of-all-trades can be even more detrimental to the CEO, team members, and organization.
Organizations that refrain from decentralized leadership rely on the CEO to make or sign off on all the decisions, thus making the company dependent on the CEO for day-to-day activities. When the CEO is not available for any reason, the progress of the team and the success of the business becomes inhibited. Plus, if something were to happen to the CEO, what does that mean for the success of the company? A company that centers around one person does not allow for growth and scalability, which limits its potential and reduces its value.
The Right Stuff
Building a leadership team starts with identifying trusted and committed team members who display their desire and ability to step up, truly believe in the company vision and owner, and have the innate ability to put the company’s needs before their own. These are typically the “A” players within an organization.
However, not all high achievers want to be leaders, take responsible for others, or grow too far outside their comfort zone on a regular basis. Some are more comfortable maximizing the effectiveness of their role by leading with their subject matter expertise rather than their management, visibility, and decision-making qualities.
An elite breed of “A” player, known as an intrapreneur, embodies the business instinct, leadership qualities, and entrepreneurial mindset while working within an established company. These standouts naturally challenge themselves to grow, hold themselves accountable to improve, identify and seek out solutions to problems, share ideas to add value and capitalize on opportunities, and think outside the box. As such, they tend to instinctually inspire others to follow them on a course to success.
The subtle difference between the intrapreneur and the entrepreneur is that the intrapreneur exists within the organization rather than independently, because they want to invest in the future of the company and trust in the values and decisions of the CEO. Instead of taking on the risk, responsibility, and demands of running a company of their own, they are committed to growing and improving an existing company that supports them in pursuing their career goals. These are the types of individuals that need to be sought after, nurtured, and provided the latitude to grow within a leadership team.
Although it might be a common thread, not everyone on a leadership team has to have entrepreneurial tendencies or aspirations. Some will be leaders because of their effectiveness in their areas of focus like finance, human relations, customer service, or production. What is important is that being part of the leadership team is a recognized achievement that is earned and respected by everyone involved. Additionally, the leaders on the team must respect each other and be committed to working together to support the company and CEO.
Inasmuch as it is important for members of a leadership team to have common qualities and meet a certain set of standards, it is just as important that they think differently, are willing to challenge and be challenged, speak up for what they believe, and engage in healthy conflict when required. Diversity is a critical component in a leadership team to ensure that the organization does not overlook blind spots and that all the major aspects of business that make the organization run are covered. As the leadership team grows, the hope is that the CEO will be able to gradually lessen their load by relinquishing many of the roles and responsibilities that others can be responsible for owning.
Hold Your Course
Easing the burden of the CEO by taking on responsibilities is not the only purpose of the leadership team; what is even more critical is how they support the CEO in keeping the company on its defined course and ensuring that the organization remains focused on achieving the goals that have been established and agreed upon by everyone involved. Although it is natural for disagreements to exist amongst passionate leaders (as well as with the CEO), those disagreements must remain behind closed doors. Outwardly, the entire leadership team must remain unified in echoing the agreed upon decisions that undeniably define the company strategy and vision—and demonstrate a commitment to the company’s long-range plan.
What is important to realize is that establishing a leadership team is not only fundamental to the success of the CEO and organization, it is a critical move to demonstrate a commitment to and an investment in the leaders themselves that translates to all the other members of the team. Leaders are driven by making a difference, accomplishing goals, and pursuing continual growth toward their career objectives. Being elevated to a leadership position can be an important step in that direction.
The best leaders are those with innate qualities who naturally find themselves in roles of responsibility and authority on a team. As such, members of the team crave their guidance, gravitate toward their influence, and rally around their mentorship and security. Not only can a leadership team help future-proof the company, it can also foster the growth of team members, amplify the messaging of the company, unite the team around common goals, and diffuse concerns by setting a confident tone that strengthens the team’s focus.
Building a leadership team does not happen overnight. Even once the CEO becomes comfortable with the notion and benefit of establishing a leadership team, it is critical to define the roles that are needed and invest the time and effort required to identify, groom, and/or hire the right people to assume the responsibilities required.
A leadership team can start with one or two members and grow over time as the organization evolves, needs warrant, and leaders are identified. The critical aspect of the leadership team is the role it serves in establishing a solid foundation upon which the company can grow, mature, and succeed, so all involved can have confidence in its future.