Running a successful business, no matter how big or small, starts and ends with effective leadership. This involves defining a clear destination; getting everyone focused on reaching that destination; informing, inspiring and engaging people to get there; and then measuring results and adjusting as necessary along the way.
These leadership principles apply to all types and sizes of businesses. However, their implementation can vary significantly, especially in smaller, entrepreneurial firms that lack the resources and formal management training of much larger organizations.
As a consultant and leadership coach, I’ve had the good fortune of working with many entrepreneurial firms to help them get clear on winning and reach their destinations. From my perspective, here’s what effective leadership looks like in a small business.
Get clear on winning.
An organization without a clear destination either has too many destinations or none at all. That’s why the first task of every leader, regardless of the size or type of business, is to define and paint a crystal-clear vision of what winning looks like for the organization and what it will take to get there. Otherwise, people tend to make decisions based on their own personal agendas rather than the needs of the organization.
With fewer people and less resources, small businesses often find it easier to get clear on winning. The bigger challenge comes from staying focused on the destination. Entrepreneurs tend to see opportunity everywhere, and they often fear that missing even one could negatively impact the business. Yet, just because an opportunity lies within your reach doesn’t necessarily mean it will serve you well.
One of the worst mistakes small businesses can make is chasing too many things and thus doing none well. So choose your destination carefully, and stick to your guns. Your employees, your customers, and your business will appreciate a focused approach.
Communicate the goals.
Once you’ve articulated the destination, the task becomes keeping everyone focused on it by constantly communicating the goals. Here’s where small businesses have an advantage over the big boys.
Despite today’s anytime, anywhere communications technologies, face-to-face communication remains one of the most effective ways to give and receive information in the business world. Yet, in large companies, face-to-face is virtually impossible except at the team level. Information has to go through layer after layer of bureaucracy, which slows down the process and often leads to miscommunication and misunderstanding.
In a small business, leaders can more easily address everyone in person through “all-hands” meetings or in small groups. This doesn’t mean small businesses shouldn’t communicate via email, social media and intranets. But there’s nothing like face-to-face communication with the leader to make employees feel engaged and connected with the organization’s mission and objectives.
Clarify roles and responsibilities.
To help people stay focused on the big picture, leaders also need to clarify each employee’s individual role and responsibilities and how those support reaching the destination.
Large companies typically have well-trained HR departments to create formal job descriptions, classifications, expectations and career paths for every position. Small businesses that lack these internal resources may find it harder to accomplish this goal. Plus, people tend to pitch in on areas outside their domains, which can cause confusion about role responsibilities and lead to duplication of efforts.
To counter the tendency to get lost in doing what needs to be done, small businesses need simple tools that create clarity, not bureaucracy. To keep employees focused on their responsibilities, provide ongoing performance feedback – presented by the immediate manager or supervisor and always linked to the destination.
Every employee should be able to answer these questions:
- What are my top priorities?
- What are the three primary objectives I need to achieve this week/this quarter/this year?
- How will I know I have been successful after I have worked so hard this week/month/quarter?
- How will we know when we have won as a team? As an organization?
Giving candid feedback can be awkward in a small business, especially when managers lack training in this area. But without feedback, you don’t get engagement or commitment. Train your managers to give effective feedback, and make it part of their job description. You’ll have less turnover and a more engaged workforce.
Get good at (and comfortable with) delegating.
Few things inhibit the growth of a small business like a leader who can’t or won’t delegate responsibility to others.
Large company managers understand their job is to manage people, not the work. They either get good at delegating or they don’t last very long. In contrast, entrepreneurial leaders may hesitate to delegate for many reasons. They fear employees don’t have the skills or aptitudes to take on more responsibility. They like having their hands in every piece of the pie. Or, they simply don’t want to give up control.
To get comfortable with people taking on larger roles in your small business, identify the tasks currently on your plate that could (and should) be handled by others. Then develop employees in those areas by:
- Educating them through courses, conferences, seminars and reading materials
- Allowing them to gain experience through on-the-job tasks, special assignments, challenging projects, and job rotation
- Providing coaching and feedback, including mentors and role models inside or outside your organization
If delegation proves difficult for you, consider engaging with a leadership coach or asking a respected colleague or associate to mentor you in this area.
Teach employees the business of the business.
Today’s companies need to move fast with focus and flexibility (a concept I call strategic agility). Here’s another area where small businesses have a distinct advantage.
Flexibility and responsiveness require pushing decisions as close to the customer interaction point as possible. In a small business, leaders tend to be closer to their customers and more in touch with their markets. Also, fewer layers of management and less bureaucracy enable faster responses when markets and customer needs change overnight.
Yet, employees can’t make good decisions when knowledge resides only at the top. Teaching people about costs, customers, how to improve internal processes and more provides the information and confidence they need to do the right things at the right times. Otherwise, they will continually push decisions upward, making even a small organization slower to respond than it needs to be.
Educating employees doesn’t have to be complicated or expensive. Stage brown-bag lunches where managers talk about their areas of expertise. Sign employees up for webinars. Create a company library of books and training videos employees can learn from. Do these things well and the return on investment will far outweigh the cost.
Keeping Your Eye on the Ball
Perhaps the biggest challenge for small business leaders is personally staying focused. To minimize the constant demands on your attention from people and the daily deluge of email, texts and tweets, start each morning by taking 10 minutes to review the day ahead.
Ask yourself, “Of what I plan to do today, what will get me closer to my definition of winning?” Then organize your day around those tasks and activities that move you closer to your goals, while eliminating the things that clutter your time and attention.
Stay focused, keep your people on track, provide regular performance feedback and help them grow professionally, and it won’t be long before your small business becomes larger and even more successful.