VenturePORT Series - Leadership
Many entrepreneurial education programs focus on leadership training — as they should. Leadership skills will go a long way toward helping you accomplish your goals. Yet, one person's great leader might be someone else's Public Enemy No. 1. Experts differ on the definition of great leadership. Many different types of leaders have thrived — though hated by many. The New York Yankees, for instance, put together winning teams year after year, despite the negative reputation of the club's owner.
What is leadership? In the broadest sense of the word, leadership means the ability to set clear goals, measurable objectives, and to facilitate the creation of strategies, plans, and actions to accomplish those goals. Does this mean everyone has to like you or everyone will like you? No. Some great leaders are well liked, others are not, but all earn respect by doing what they are supposed to do — lead to successful results.
Whole libraries of books exist on the qualities of great leaders. Many people look to the military for examples of different types of leaders: the well-loved general who watches out for the comfort of his troops, but doesn't necessarily win battles; the general who works the troops hard and subjects them to more danger and wins; the general who listens carefully to his officers and rides among the troops to gain insight from others before making a decision; and the aloof genius who listens to no one, but who has a tremendous grasp of strategy and execution.
It's the same in business. You'll find highly successful companies run by CEOs beloved by their employees for their generosity or willingness to empower people, and others run by autocratic CEOs who pack the organization with cronies and insist on obedience.
Does this mean you don't need to care about leadership? Of course you should. Someone who aspires to build a great organization should read as much as possible — not only about business leaders, but also about military and political leaders — to see how others have approached the challenges of leading people. Few endeavors in life create more of a challenge than leading people.
Why does leadership matter? In the end, starting a successful company requires more than an idea and money. It means inspiring people to buy into it one way or another, attracting good people to help with deliverables, and providing the continual navigation required to maneuver through time and circumstances.
Many great entrepreneurs have a unique ability to conceive ideas, but little capacity to mobilize people to help put them into effect. In fact, these types of entrepreneurs are really inventors, and will do their best to find other organizations or people to bring great ideas to fruition. To implement an idea, you have to make things happen, and that means mobilizing or convincing people in one way or another.
Below you'll find a list of some of the key elements of leadership from our point of view. Keep in mind that, while many entrepreneurs have succeeded without all or many of these qualities, it certainly doesn't hurt to have them, or to find others who do to help run your organization.
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Vision
To get somewhere, you need a path. The entrepreneur may come up with a great concept, but success goes to the person who can transform an idea into positive cash flow. That takes an ability not only to see the opportunity, but to find the best route to success, and to stay continually attuned to the road ahead for new opportunities and challenges. Any entrepreneur who has read The Perfect Storm, by Sebastian Junger, will identify with the fishing trawler captain, who continually has to use not only technology but his hunches to find the fish, while making complex decisions related to ever-changing weather, tides, and morale of his crew. The visionary "captain" knows where to find the fish and helps the crew catch them. Sometimes the crew likes the captain, other times not. But the crew usually respects the captain if the catch is good.
Vision is much more than being able to identify an opportunity or good idea. Vision comes into play along the entire journey. Inventors have creative imaginations, and they may even be visionaries, but if they can't apply wisdom to the day-to-day battles of business, they won't be able to run a company day after day. That's why many great inventors get others to run their organizations.
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Clarity
The gift of clarity means the ability to see patterns where others cannot, to identify opportunities or dangers that others ignore, to sense warning signals, detect an opening, or flush out a problem. It could mean the ability to anticipate what a competitor might do; to detect an area of need or pain in customers that creates a new product or service; to anticipate a change in customer needs that could hurt the business; to identify and act rapidly on a short-term opportunity, etc.
You don't need clarity to conceive of a great idea, or even to make it work, but it will come in handy when running a business day to day. You cannot imagine the amount of information you will have to process running even a small business, and often at breakneck speeds. It's easy to ignore comments, signals, information, behavior changes, that could spell opportunity or doom for your business.
Clarity probably can't be taught either. So, if you find yourself often frustrated and confused when juggling issues, and you frequently look to others to help you make sense of complex, fast-changing situations, you will eventually need help navigating your business from concept to creation. Very few if any businesses go strictly according to plan. You will have to make many course changes along the way, and these will require both vision and clarity to choose the right directions.
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Communication
No matter what, you will have to be able to explain your vision to someone — an investor, colleagues, customers, or friends. Clearly translating a great vision into coherent terms requires an outpouring of effort for most. The good news is communication can be taught. Basic rules do apply. Good communicators, for instance, will:
- Listen and ask questions.
- Learn how to look for and address areas of pain or interest in people.
- Be sensitive to body language and facial reactions.
- Critique work produced by colleagues in positive terms, not negative ones — it's about how something could be better, not about why it's bad.
- Put themselves into the shoes of the person they're addressing.
- Understand that not everyone absorbs concepts at the same pace or in the same way.
- Always respect the dignity of people around them.
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Inspiration
Not every effective leader inspires. Even a tyrant can get people to work for them if they pay people enough, give them other perquisites and benefits, and achieve success. Many effective leaders have little time for inspiration, because inspiration takes time and requires a degree of personal risk.
To inspire people means to help them light a fire from within, so the flame of passion burns not just because they want their jobs, but because they have become passionate believers in the organization. To light the fire requires patience and an almost magical ability to understand what makes individuals tick — because not all of us are motivated in the same way, nor engaged at the same pace.
The ability to inspire requires:
- Taking the time to communicate goals and objectives people can buy into.
- Fostering a sense of pride and "task value," so people feel their work has meaning and importance.
- Letting people make mistakes so they take ownership of their decisions.
- Continually and democratically looking for ideas, so everyone from the janitor to the interns knows their ideas and observations matter.
- Providing a sense of support, so people feel management cares about their efforts.
- Recognizing people at all levels in meaningful ways, so they know they are valued as individuals.
The risk? When you let people make mistakes, you might lose some money or annoy a customer, or worse. On the other hand, if handled properly, those mistakes rarely get made again, and provide a valuable lesson to the person who made it and to those around him or her.
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Management
It's not enough to have vision and clarity: someone has to create a formal strategy, with plans and action steps. Even the simplest business requires a plan and probably some combination of people to make it happen on time and on budget to the satisfaction of the customer. This means finding ways to establish clear criteria for what constitutes the successful delivery of your product and service, at what cost, and in what time frame. The people who manage a day-to-day business often do not have vision or clarity, but a great sense of detail and of how to mobilize people to get the job done.
Again, in military terms, the type of general needed to create the overall plan of attack is not necessarily the same type of person you want to lead the troops and supplies coming ashore under fire. Many leaders know this, and seek out operations types who are great at getting the job done, yet lack the vision and clarity needed to lead from the top. If you don't have day-to-day management skills, you will probably need someone who does. Ironically, entrepreneurs who consider themselves great at day-to-day management often have problems keeping good managers, because those managers can often feel continually micro-managed by the boss, who usually knows better.
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Fortitude
Most businesses don't always run smoothly, and it's almost impossible to predict what will happen every time you make a decision. No matter what you do — create a new product, try a new marketing concept, hire an employee, select a vendor or take on a big customer — all can have unintended consequences good and bad. Too much success, and you can have problems meeting demand and potentially angering customers. Too little success, and you could hemorrhage money. You might have a day in which your top salesperson tells you she's about to close on a big piece of business that starts in three months, at the same time your accountant is telling you you're $80,000 in the hole in cash and have to come up with it within a week or you won't meet payroll. You might have to go to the office with a pile of work to get done in order to invoice a client, even when you feel so depressed you don't want to get out of bed.
Whatever you feel inside you will have to carefully mask from your colleagues. Your team will lose faith in you if you seem rattled when the going gets tough; they depend on you, the leader, to stay calm and hopeful. Remember, the entrepreneur's greatest remedy for anxiety is hope. You'll have trouble keeping the team engaged if you can't keep the flames of optimism alive even when prospects look dim. Hope looks mighty pathetic without a plan, so in addition to staying calm in the face of adversity, you should have the ability to come up with a plan when you feel under fire or worse. There's no faking fortitude, and probably no way to learn it if not through experience. Push through enough tough experiences and survive, and you'll develop fortitude — like it or not.
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Humility
Carlos Castaneda, the famed author of a series of popular novels about Native American wisdom in the 1960s, quoted a wise man who provided great advice for all people, including entrepreneurs. In essence, he wrote, there are four great challenges in life: fear, clarity, power, and old age. Fear, he said, stops us from undertaking a risky voyage, such as the fulfillment of a dream. You've got to overcome fear to launch your journey. Once you overcome fear, and attain some portion of that dream, you have to deal with clarity. Clarity, as defined above, gives you a great sense of confidence you can see clearly. After all, you've gotten this far. Clarity can make you arrogant and overconfident at the risk of causing blindness leading to a fatal misstep. Those who stay focused and go beyond clarity face the next great challenge — power. Power is what you feel when you have overcome fear and clarity. Now you really feel confident. You've made it despite many challenges. You can make no mistakes. Well, yes you can, says Castaneda's wise man. Power can blind you more than anything else.
Humility is more than a noble trait. When truly sincere, humility is perhaps a leader's most powerful weapon — and that's the irony of it. It helps enhances vision, clarity, and the ability to lead people, because humility enables you to see from the point of view of others and remain forever open to new thoughts, beliefs, experiences, ideas, and unique approaches you might otherwise have missed. Most of all, humility helps prevent you from succumbing to the dangerous tendency of many "leaders" to deprive people of dignity on the way to getting what they want. Whenever you take away someone's dignity, you risk creating an unnecessary enemy.
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The Bottom Line
Idealism aside, entrepreneurial success depends on the ability to conceive a great idea, raise money, and put in the sweat equity to deliver. Also, to make money, you must continually adapt to meet changing customer needs. If you have a good enough product and service, make enough money to reinvest in your business, and pay well for good people, you'll make enough money to keep the dream alive — and then some.
Leaders enjoy mobilizing people to accomplish a task. They get great satisfaction watching the organization effectively meet client expectations, support channel partners, and maintain productive, satisfied employees. Other types of leaders take satisfaction in making money and feel little for the people who help them get there. Both styles can succeed. You will decide what works for you, or whether, in the end, you'll need to recruit a leader while you focus on coming up with more great ideas.
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