Published in “Business Edge” website, June, 2010
Click here for original article.
In today’s “new normal” business environment, leadership is even more critical to achieving bottom line results because customers are demanding more for less, employees are concerned about the future and cash is tight. In my experience working with clients across multiple industries and globally, I’ve found there is one distinguishing factor to those companies who consistently achieve bottom line results and provide excellent customer service – leadership.
There are three keys to an effective leader who drives not only profitability and cash flow, but also engages employees, customers and suppliers:
1. Clear vision
2. Effective communication of the vision
3. A culture that values execution
1. Clear vision: I’m not referring to those leaders who spend significant dollars drafting and posting vision statements yet who do not live the vision statement. You might as well stay home. Instead, I’m referring to those leaders who have a clear vision of where the company is headed and why it matters. Throw out the fancy PowerPoint slides – even if the vision is written on a napkin, it will be effective if the leaders are clear on the direction.
In order to develop an effective vision, the leader must know the market, customers, suppliers, employees, etc. And the leader must be able to translate the vision into something all the constituents can understand. Being “the best” means nothing. Your vision must be tangible and actionable.
2. Communicate the vision: Communicate, communicate and communicate. It might seem endless yet it is vital to continue to articulate the vision in various ways and through different mediums until it becomes a part of the everyday culture and understood by not only employees, but also customers, suppliers, bankers, investors etc.
Communication is not a one-way street. Although the end vision shouldn’t change, there are countless ways to achieve the vision. Thus, encouraging discussion and debate on the optimal strategies/ paths to achieving the vision is vital. Take the time to listen. Ask probing questions and be open to new ideas. One of the keys to success is utilizing each person’s unique strengths to achieve a better result than any one person could achieve on his/her own; however, the only way to do that is to stop talking – and listen.
Last but not least, the communication process must be incorporated into the performance feedback process. When the vision is translated into goals and objectives for each employee with metrics which are tied to rewards, recognition and feedback systems, it will drive results.
3. Value execution: My most successful clients value execution. Focusing decisions and priorities on those efforts that produce results sounds obvious, but is often overlooked – it is easy to get caught up in great-sounding ideas that are complex and resource and/or capital- intensive to implement. Instead, think about “Occam’s Razor” – in essence, all other things being equal, the simple solution is often the best one (and most profitable).
Valuing execution has to be incorporated into the performance management system as well. Do not reward solely effort. Reward those who are willing to challenge the status quo. Reward those who encourage teamwork and debate to develop new ideas. Don’t reward those who develop fancy project charters and timelines, but who do not ensure the project results are achieved; instead, reward those who manage the critical path with vigor. Reward those who are willing to address the sacred cows. Reward those who are willing to go the extra step to ensure success when they don’t know anyone is looking. Reward those who accept blame and give away credit. Reward those who continually look for a better way.
It is not easy to be a leader in a culture that values execution (after all, how will you know what to reward without a significant effort?), but, with consistent application, it will become a rewarding experience and will deliver significant bottom line results.
These qualities are not expensive in terms of capital or resources, yet in my 20-plus years of experience, it is the only combination that delivers a 100 percent success ratio. When I’ve been involved with a business with these sorts of leaders, amazingly, the business just seemed to “fall into place” – sales, profits, and cash flow increased. Yet, in the exact same industry with a similar situation, the opposite occurred – the only difference was leadership.