Leadership Principles for Growing Companies
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1 Leadership Principles for Growing Companies Elizabeth Brashears, SPHR, Director, Human Capital Consulting Every startup company has big dreams of fast growth and increased revenue. The early stages of a new venture bring with it great excitement. There is an energy in the atmosphere and a continuous buzz in the air. Along with the Red Bull on the table, people are getting things done and perceived genius is being birthed right in front of everyone s eyes. Startups are exciting because they are filled with potential. They can capture all the hopes and dreams of the inspired entrepreneur and represent the American dream. An entrepreneur has a great idea, finds a little bit of funding, hires a few hard workers, and then the company takes off and everyone takes home a healthy paycheck. That s how it works, isn t it? Not quite. The reality of the startup world often looks much different. Two-thirds of all startups fail within two years and even making it past the twenty-four month mark is no guarantee of success. For those that do succeed, most start out slow, and some may hit a growth curve at a later point in time. Then there is that rare breed of company that puts the pedal to the metal and grows fast and furiously from the get-go. How do those rapid-growth companies go from a startup sensation to a company with the potential to endure over time? An infusion of capital could certainly be helpful, but there is nothing more critical than the organization s leadership and the way the leaders drive the ultimate culture of the business. 64
2 The leadership within a new venture can be a competitive advantage and the reason behind its success, or it can be a road block to any future growth. The leadership within a new venture can be a competitive advantage and the reason behind its success, or it can be a road block to any future growth. An organization s growth is only held back by its leader s ability to both manage and lead the teams around them. An entrepreneur is someone with a vision and a dream. Often they just might be a creative individual who takes a great idea to market and then suddenly finds themselves having to manage others without being equipped with the necessary knowledge, skills, or ability of a leader. Make no mistake, being a manager or a boss doesn t necessarily make you a leader. In fact, leadership doesn t have to be about the role an individual holds. It isn t about authority at all. It s about influence and the ability to accomplish what one hopes will be extraordinary results through ordinary people. The good news for the new leader is that the old adage that Leaders are born, not made is simply not accurate. Leadership is a process of influence. It can be taught and honed like other important skills. Additionally, there are a few principles that leaders should remember. Whether a company is experiencing fast growth or they have begun to stabilize, these leadership principles could potentially make or break where the company is headed. Leadership is a process of influence. It can be taught and honed like other important skills. Here are ten leadership principles to grow by 1. It s about people, not about strategy. In early-stage companies, there is great focus on the strategy that the company will take to bring its product or service to market. There is definitely a place for strategy and, without a doubt, it is critical to any company s success. However, strategy should not be the focus within any organization if the company is trying to grow and evolve into an enduring company over the course of time. The focus should be around people and the talent within the organization. The strategy, the product, the service, the technology; they all mean absolutely nothing without the right people to make it happen. Employees are often the greatest expense and the greatest asset of a company. Focusing first on developing and engaging employees will have a more significant impact on the business than if all of the effort is focused on the strategy. Engaged, productive employees will fulfill the company s strategy and continue the organization on a trajectory of growth. People are important no matter what stage in the business lifecycle a company finds themselves in, but when companies are on a growth curve, the impact of their people is substantial. Part of focusing on people is taking the time to hire the best and the brightest talent for the organization. While this seems self-evident, often the process of hiring talent is seen as getting in the way of doing the real work of the organization. Great leaders will concentrate the most time, money, and effort on identifying and developing the talent around them. When leaders focus first on people, they will find that in return, the people will fulfill the strategy of the organization. When leaders focus first on people, they will find that in return, the people will fulfill the strategy of the organization. 65
3 2. Effective leaders drive the company culture. Culture is defined as the identity and personality of an organization. It consists of the shared thoughts, assumptions, behaviors, and values of the employees and stakeholders. It is dynamic and evolves over time and with new experiences. Multiple factors help drive and define the culture, including leadership styles, policies and procedures (or sometimes lack thereof), titles, hierarchy, as well as the overall demographics and workspace. Leaders spend time and energy to make decisions every day regarding the available resources, whether those are budget decisions, product decisions, process decisions, or decisions around people. The appropriate amount of time and energy should also be given to the core fabric that serves as the foundation of the organization. Culture drives or impedes the success of an organization and leaders must actively work to control it. An organization s culture can be one of its strongest assets or it can be its biggest liability. Culture impacts the talent, the product, the clients, the revenue, and it is critical that leaders take an active approach in ensuring that their culture develops through intentional efforts and not by default. In order for a venture to experience high growth and productivity, it is imperative to have an aligned workforce that can innovate, execute, and meet designated targets. A thriving culture that engages the workforce will generate a return on investment through the success of the organization s product, people, customers, and brand. 3. Strong leaders identify and live out the values that are important to the organization. Every organization is guided by a set of beliefs and values. These values communicate what an organization believes and what it considers to be important. Establishing a set of Core Values for a company can help the organization as it continues to experience growth. Additionally, values that are embedded into the culture help to: Clarify the behaviors that are important for success within the organization Instill a sense of ownership and pride within the company Build consensus around vital issues Provide a framework for how people are expected to interact with each other Acclimate new employees to the culture of the organization Guide decision-making Determine if the company is on the right path to achieving their business goals Leaders are responsible for ensuring that the Core Values do more than just live in a PowerPoint or hang on the wall of the front office. A true Core Value should have an active influence over the people and the organization. Though identifying and establishing values starts with leadership, this in no way is a one-person job. Defining your Core Values should involve the entire company. The Core Values should be brought to life in the people, events, products, space, and the stories that are told. They should be used in selecting the right talent and in managing and developing that talent to continue and further the growth of the organization. 66
4 Every individual has a unique set of strengths that when identified, nurtured, and channeled appropriately, can have a dramatic impact on employee engagement and the overall performance of the company. 4. Recognize and leverage the strengths of others. Many leaders focus on overcoming weaknesses and spend untold time and energy trying to address shortfalls in themselves and their employees. While these leaders are busy trying to fix themselves and others, they are often missing the powerful asset of truly leveraging employee strengths. Strengths can be described as an individual s innate talents and preferences. Studies show that rather than trying to overcome weaknesses, people actually grow the most in the areas in which they are naturally strong. Every individual has a unique set of strengths that when identified, nurtured, and channeled appropriately, can have a dramatic impact on employee engagement and the overall performance of the company. Learning to assess the talents of others isn t as easy as it may sound. When leaders master the art of talent assessment, their organizations can develop loyal, enthusiastic, and engaged employees who want to grow along with the company. Discovering strengths involves more than patting people on the back. It s a powerful tool that leaders can use to help their employees recognize the best of what they bring to the table. Additionally, identifying and focusing on strengths provides a way to ensure the continuity of leadership and to build the future of the company. Armed with this information, leaders can structure jobs and opportunities so that people can exceed their potential. Assessing talent and identifying employee strengths is critical for effective leadership. Here are a few tips to get started in the right direction: Have leaders and employees complete objective assessments of their strengths (perhaps with a tool such as StrengthsFinder 2.0). The information gathered from the assessment can be used in career and development plans. Without an objective assessment, strengths can easily be misidentified when you are only reviewing subjective evidence. Recognize the possibility that an employee s strengths may be better suited for a role other than their current one. Abandon the concept that a business is best composed of well-rounded employees. Leaders can get the best out of those around them by developing the innate strengths that each individual brings to the organization. Leaders should ask employees if they feel they have the opportunity to do what they do best every day and then listen to their answers and probe for additional understanding. Drive the culture to support employee growth and advancement based on each person s strengths. An easy place to start is incorporating the strengths concept into the company s performance management and review process. Leaders that leverage the strengths of their people can produce empowered and engaged employees. Ultimately this creates a more productive organization that fully maximizes the investment in their human capital. 67
5 5. Great leaders inspire others and create a vision for the future. They have purpose and an understanding of the reasons behind their actions. They are intentional and have conviction and clarity in their purpose. During the early stages of a company, and particularly during rapid growth times, inspiring others to see their vision of tomorrow s success is vital. There are some basic fundamentals of a leader s vision that can excite and motivate others to follow. These include: Presents an organizational direction and purpose that can resonate with others. Inspires enthusiasm, commitment, and loyalty from stakeholders. Has emotional appeal. People get excited when they talk about it and they want to help others see it and join them in their journey. Reflects the Core Values of the organization. Encourages employees to believe that they are part of something bigger than themselves and their current responsibilities. Is communicated in multiple ways. Has enough clarity so that people are empowered to make day-to-day decisions, knowing that their actions are helping to achieve the vision. Vision without inspiration behind it can often fall flat, so it is just as critical that the leader can inspire others. So, what makes a leader inspirational? They have passion and purpose, and the ability to communicate that passion and purpose to others in a clear and exciting way. They include others and allow others to feel intimately connected to the vision and the ultimate outcome of that vision. They embody what they ask of others. They create fun and excitement around them and help others to find joy within the vision they create. They emotionally engage with people around them. People are motivated to change when they are emotionally engaged and committed. A vision should be shared with others and translated into specific, measurable, and achievable goals. It should create alignment and help others to connect their personal goals to the long-term strategic goals. Vision should create action. Without action, the vision is simply an unfulfilled dream, but when aligned with action, it will provide the momentum to continue the organization on a trajectory of growth. 6. Leaders should operate with honesty and transparency and promote trust. Trust is an inherit part of leadership. Leaders should say what they mean and mean what they say. Integrity and candor are imperative to building effective business relationships. Employees have to trust that a leader is serving everyone s best interest and the leader needs to trust that their team is executing on the vision. It is, therefore, critical that leaders lead with integrity, honesty, and clear values. Most individuals have had to work with a leader they did not respect. No matter how intelligent or charismatic, placing blind faith in them would be a mistake. Without trust, people feel they have to watch their backs and fear becomes a primary motivation. Trust is something that has to be earned. Trust is a relationship established between a trustor and a trustee. The trustor has to take some risk and the trustee must prove to be trustworthy. Leaders must be taught both how to trust and how to be trusted. People are not willing to recognize someone as their leader unless they trust them and are convinced that the leader knows what they are doing and where they are going. Leaders who exhibit integrity, honesty, and trust will set the tone for establishing those same values within the organization. When the relationships within a company are built on trust, people come together and will find a way to achieve the objectives laid out before them. Trust is at the heart of leadership and when a leader walks the talk and builds trust, care, and concern into those they lead, it can create a bond that will span positional gaps, survive mistakes, and overcome even the toughest of challenges. In the book The Speed of Trust: The One Thing That Changes Everything, Stephen M.R. Covey concludes that trust is the one thing that can build or destroy every human relationship. Most find that is true in business as well as in life in general. 68
6 Leaders in rapidly growing companies have to learn to how to remove themselves as the primary thought leader or service provider, and instead position themselves as leader of the leaders of the organization that their people will quickly become. 7. Leaders in fast-growing companies need to be unnecessary in the day-to-day operations of the business. Too many leaders want to be needed and derive satisfaction from the critical nature of their presence in the business. In established organizations, it isn t uncommon to hear new managers talk with almost a sense of pride about how things seems to fall apart when they take a day off or go on vacation. That isn t even successful management, let alone successful leadership. Leaders in rapidly growing companies have to learn to how to remove themselves as the primary thought leader or service provider, and instead position themselves as leader of the leaders of the organization that their people will quickly become. 8. Good leaders take the time to solicit feedback from those around them, and then they do something astounding they listen. In a rapidly growing company, taking the time to truly listen to those around you can be difficult. It is often the person who speaks first or loudest that is heard, but good leadership entails listening and understanding all of those around you so that obstacles can be anticipated and removed. Feedback can be used to build consensus among employees and give them ownership of the ideas and concepts to be implemented within the organization. When companies grow quickly, it is important to capture the momentum and keep it moving forward. The more involvement leaders seek from employees, the easier it will be to implement new ideas, resolve issues, and minimize conflict. 69
7 Identifying and developing future leaders, whether for future growth or to prepare for departures of key individuals, is critical to an organization s long-term success. 9. Strong leaders build the next generation. Identifying and developing future leaders, whether for future growth or to prepare for departures of key individuals, is critical to an organization s longterm success. Unfortunately, new leaders don t just magically appear. That is why it is important to build a pipeline for the next generation. There is no greater investment a leader or a company makes than the investment in their people. Developing a leadership pipeline should certainly start with internal employees. However, leaders must also spend time networking and identifying others who may fill leadership gaps at future points in time. 10. Egos should be checked at the door. Often when a company is in growth mode, it is easy for ineffective leaders to hide behind the growth. The growth may have even disguised the lack of competence and skill of the organization s highest leader. Great leadership isn t just about competence and skill though. Effective leaders recognize when they no longer possess the necessary knowledge, skills, and abilities to keep the company headed toward longterm success. It doesn t mean that they don t have a place or role within the scope of the organization, but it s important for them to always place the company s growth needs above their personal need for success or power. The impact of leadership on any organization is significant, but when a company is in growth mode there is much more at stake. If not managed properly, this pivotal time of growth can sabotage the future of the business and things can quickly spiral out of control. When leadership is properly executed, a small venture can become a bigger organization that can endure over time. But leadership isn t just about the top of the organization. True leadership is seen at all levels of the company and has nothing to do with the number of people they manage or any sort of positional authority. Leadership is not about control, it s about influence. Even the inexperienced entrepreneur with little experience in managing others can practice the art of leadership and nurture the appropriate skills to lead others with success. The true reflection of a leader s ability is measured not just in a company s bottom line, but also in the success and empowerment of those around them. Even the inexperienced entrepreneur with little experience in managing others can practice the art of leadership and nurture the appropriate skills to lead others with success. About the Author Liz Brashears is a Director of Human Capital Consulting for TriNet overseeing their client experience for the Southwest Region. In addition to partnering with clients on their human capital strategies, Liz is the National Practice Leader for TriNet s Leadership Development practice and advises clients on assessment and leadership matters. 70
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