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With Growth, Companies Have Different Leadership Needs

on Wednesday, 02.05.2016

Congratulations! You conceived of a business, started it and grew it. The business is continuing to grow in size and complexity.

Question: Are you still the appropriate person to lead it?

Leadership skills can grow with a business, or not, and in dealing with growing companies, this is one of the most personally difficult challenges that I help clients face. While this topic is important, broad and deep, I will point out a few aspects of leadership that repeatedly come up with growing middle-market businesses.

The tendency is for a leader to assume that he or she can continue to lead a growing company, even though the skills required might be very different from those required to start or initially grow the business. In trying to summarize some of the behavioral factors that relate to being an effective leader, I came across a very insightful, recent article that presents four factors in effective leadership for companies that are growing and becoming more complex:

  • Solving problems effectively. The process that precedes decision making is problem solving, which is when information is gathered, analyzed and considered. This is difficult to get right, as companies grow and the scope of responsibilities of managers narrows, yet leaders’ scopes remain broad. Resisting being over-influenced by a manager with a narrower scope by putting decision making into a larger company context requires discipline.
  • Operating with a strong orientation toward attaining results. Leadership is not only about developing and communicating a vision and setting objectives, but also following through to achieve results. Leaders with a strong orientation toward attaining results tend to emphasize the importance of efficiency and productivity and to prioritize the highest-value work. Simply put, if an approach does not affect results over the short or long term, get it off the leader’s agenda.
  • Seeking different perspectives. This trait is conspicuous in managers who monitor trends affecting organizations, grasp changes in the environment, encourage employees to contribute ideas that could improve performance, accurately differentiate between important and unimportant issues and give the appropriate weight to stakeholders’ concerns. Leaders who do well on this dimension typically base their decisions on sound analysis and avoid the many biases to which decision-making is prone.
  • Supporting others. Leaders who are supportive understand, even sense, how colleagues feel. By showing authenticity and a sincere interest in those around them, they build trust and inspire and help colleagues to overcome challenges. They intervene in the group’s work not to meddle but to promote organizational efficiency, allay unwarranted fears about external threats and prevent the energy of employees from dissipating into internal conflict.

This is not to say that different business situations don’t require different styles of leadership, but core leadership behavior that will be relevant for most growing companies include the four factors listed above. These four are not the be-all and end-all, but if you want to cultivate leadership skills, these four are a good place to start.

It May Not Be You!

More than once, I have hinted to a company that its leaders might be ill-suited to lead in the evolving organization. I then delicately suggested that different leadership would be needed for the greater good of the company. Sometimes, the hint was taken; sometimes, it was not taken until I very explicitly uttered these words or a variation thereof: “Leadership is required but is lacking – and you suck at it.” That did the job of impressing upon clients that they were the problem. There is nothing to be embarrassed or ashamed about; not everyone is good at everything,  and very few people are good at leading an evolving organization. Once they accept that they are inadequate to lead, leaders may need to get some training or must step aside in favor of someone with the temperament and skills to lead the organization.

Besides the direct benefits of improved leadership, a secondary benefit is that this change would allow the former leaders to focus on areas where they are skilled and experienced and their value to the organization is greatest. Leadership training generally has mixed results unless it is taken seriously. My experience is that leaders almost always knew this already deep down, but needed someone to be blunt to consider making a change.

Some content for this article was taken from “Decoding Leadership: What Really Matters,” McKinsey Quarterly, January 2015.