Leadership is not about finding a parade and getting in front; it's about creating a parade people want to follow! Whether you are a leader of a small business or large corporation, leading during tough times is hard work. But hard does not mean impossible. It does, however, require a laser-like attention to detail and a hands-on shift from "business as usual." Profitability must be maintained to ensure your company can make it through an economic downturn, and leaders must take proactive, bold and decisive steps to achieve it. With messages of doom and gloom permeating the news, it's easy to believe everyone is struggling to maintain profitability. And although there are companies and industries in serious economic crisis, many others continue to thrive and are poised for growth. So what sets the two apart? According to results from a Bloomberg Businessweek.com/Hay Group 2009 Best Companies for Leadership survey, leadership is clearly linked to positive financial results, with the Top 20 Companies for Leadership consistently outperforming the S&P 500 by significant margins. "The best companies for developing leaders recognize the value of strong leadership in both the good times and the bad," says John Larrere, national director of leadership and talent at Hay Group. "Culturally, they just cannot do away with leadership development, even in a recession. They don't see it as a perk but as a necessity." Effective business leadership is essential to a company's survival and is the key to its long-term success and profitability. Companies that place little emphasis on leadership development struggle to maintain profitability when key leadership departs, while top companies understand the importance of investing in leadership training and development. In her article "How Companies Develop Great Leaders," Patricia O'Connell writes that there is a sense of urgency to develop leaders in the best-led companies and that these companies actively manage a pool of successors for mission-critical roles. Jayne Johnson, GE's ( GE) director of leadership education, comments, "Our culture is committed to leadership development....Today more than ever, we need our leaders going to Crotonville
GE's corporate university . It's these very leaders who will make us successful today and in the future." In fact, many fail to realize that the strength of a company's emerging leadership is one of the most effective competitive weapons it can have. When budgets get tight, many companies quickly place their leadership and training programs on the chopping block. However, according to the Businessweek/Hay Group survey, 94.3% of respondents within the Top 20 revealed, "leadership development programs better allow employees to deliver on the company's goals and strategies." Since delivering results drives profitability, cutting leadership development programs to temporarily boost the bottom line is simply counterproductive and ineffective.
In today's highly competitive marketplace, execution remains one of the most important aspects of leadership. Unfortunately, too many organizations lack the tools and tactics required to consistently convert plans into results. But well trained leaders know how to execute. Now more than ever, it is critical for organizations to shift their focus from simply planning and replanning to execution that achieves maximum outcomes. Competition is fierce, and your customers have many choices. What separates the best performing companies, both large and small, from the competition is the ability to execute! Fortunately, execution can be learned. Business leaders committed to achieving extraordinary results can hone their execution skills through mentoring, training, reading and doing. At Southwest Airlines ( LUV), leadership development is imbedded in the company's culture. "It goes beyond formal training and is part of everyday life at Southwest, where employees at every level are exposed to leaders so they get to see how the leaders think," says Elizabeth Bryant, senior director of talent management at Southwest Airlines, "Even informal mentoring and exposure to company executives helps to broaden people's perspectives and stimulate their passion about the job." So what makes a successful leader? Do you have what it takes? Here are essential characteristics of top leaders:
- They're entrepreneurial, know what's essential, take risks and encourage others to do the same. Procter & Gamble (PG) recognizes this critical element. Its internal leadership development program, "Accelerator Experiences," encourages an entrepreneurial spirit by providing "developing leaders the experience of running a small business with huge strategic potential."
- They're decisive, action-oriented and build cultures based on ownership and accountability in the midst of ambiguity.
- They possess fearless determination, perseverance and passion.
- They always put the company first and understand people are their most important asset.
- They exhibit superior judgment.
- They are regarded as fair.
- They execute with precision.
- Concise operating plan: It must be measurable and highlight key milestones to achieve throughout the year. Your operating plan is the road map that tells you how to execute the business plan.
- Essential metrics: They are required to track performance, remove ambiguity and determine whether your company is on plan. Remember, fewer are better, and they must be easy to understand and interpret.
- Effective communication: This eliminates missteps and duplicated work. When you believe you are communicating enough, communicate more. Successful companies are filled with great people making commitments to fulfill objectives, all linked through effective communication.
- Meeting commitments to customers and colleagues: This is a powerful way to build trust and loyalty. Organizations that treat commitments as promises and deliver results without follow-up build deep bonds and tremendous esprit de corps.
- Underpromising and overdelivering: This is just one facet of creating customers for life. In a survey of senior executives conducted by The Prosen Center for Business Advancement, only 39% said their company consistently underpromised and overdelivered. It wouldn't require much change to beat your competition by making this one adjustment.
- Rewarding results, not how hard people work: Top leaders encourage hard work, but they only reward results. They are responsible to people and not for them, they know how to be hard on performance and easy on people, give credit, and accept fault. Once this thinking becomes the standard, you will find your company filled with great performers.
- Speed: Get things done now; don't delay.
- Honesty: Being honest with your customers, employees and colleagues is vital. It must be a visible facet of your culture, and everyone must understand that when a problem arises, it's best to fully disclose it. Customers and colleagues respect honesty and forthrightness because it demonstrates commitment and integrity.
- Teamwork: More quickly than anything else, politics will kill the spirit of teamwork and divert the focus from the company's primary objectives. Leaders must root out politics wherever and whenever they arise and call a halt to political behavior in a pointed and public way. Top leaders shape an organization's culture to minimize politics and maximize teamwork and results.
- Elimination of excuses and the replacement of them with answers and actions: The ability to differentiate between excuses and real problems is an essential part of management. Being responsible to people, not for them, means removing roadblocks to success. This enables employees to become fully responsible for delivering results.