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Are you leading or are you managing?

Steve Cordiner’s monthly Challenger column looks at the challenges facing fast-growth businesses as they scale. In this month’s column, he looks at how an effective leader must define their mission and keep their colleagues working towards it. 

Fast-growing smaller businesses should generally enjoy a crucial advantage in that they can be sustained by a common sense of purpose behind which everyone should be united. Smart business founders and leaders galvanise their teams by inspiring them with the idea that they are changing the status quo, taking on the established order of the market, and disrupting the big businesses that have had things their own way for so long.

 

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Such a compelling vision creates the energy and passion that young businesses need to make it in a marketplace where the traditional incumbents have much broader awareness and scale. But it’s not always straightforward to keep everyone working towards that vision: fast-growing young companies are very often staffed by people fizzing with their own ideas and ambitions. It is no easy feat to make sure that energy and momentum is all travelling in the same direction.  

Leadership is therefore crucial. Business founders and leaders must do more than simply manage the company. They also must define their mission and keep their colleagues working towards it; that may require some traditional techniques, even in the most modern of businesses.

How do you begin to define the mission in a compelling way? The best approach is to describe what you’re trying to achieve in terms of the impact you believe it will have on your best cohorts of target customers. See the business through their eyes, rather than trying to describe it from your own company’s perspective. This is the “so what?” that every successful business needs to think about – the value proposition that will ensure customers choose it over its competitors. And stick with it.

 

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With that mission statement in place, leaders should find it easier to set out how and where the business will operate – how it will execute on this vision. That requires a business plan, obviously, but also some thinking about company culture, the value proposition for employees, and the various practicalities of running the business day-to-day. But all these features should be guided by the value proposition to those target customers.

It’s vital to stay faithful to that vision over time, even when new opportunities begin to emerge. The most successful businesses are very often supremely good at doing one thing; trying to expand into new activities before every last ounce of value has been extracted from the core business may turn the company into an enterprise that does lots of things well but no single thing brilliantly.  As investors, that is one of our jobs; to remind organisations that value comes from ruthless focus on a few things, not dissipation across many.

The best CEOs recognise that and don’t allow the team to be diverted. They themselves may creatively muse about new ideas and opportunities, but they don’t do so out loud until the timing is right, so that their teams have clarity about the mission in hand today.

 

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Leaders also must decide for themselves where they want to be actively involved in the business and where it makes sense to delegate. That requires good self-awareness – an understanding of your skills and capabilities, as well as your weaknesses so that you can begin to compensate for these. 

But how do you check this is happening?  We all know it’s easier to say than do.  There are various ways to get this working in practise.  I personally am a big fan of psychometric profiles which can provide a very accurate assessment of your own preferences in the work environment and what that means for the way you lead your team. If you are sceptical, do a profile and share it with your partner or a close friend – they will usually quickly agree with those pointed conclusions.  Feedback from the team itself can also be very valuable: try to build a company culture in which people feel comfortable telling their bosses what they think – and where leaders are prepared to listen.

 

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The final part of the leadership jigsaw is recruiting where you identify gaps in the talent required for your business’s mission – either your own gaps, or shortfalls within the team. One of the most important roles for good leaders is to approach the recruitment process scientifically, casting the net wide and hiring the best possible people to fit a clear role. Hire talent for +3 years, not just for today, and pay up. Being able to lead a team you trust to deliver a clear mission? It’s the golden ticket for entrepreneurs. 

If you’d like to find out more about Livingbridge Growth or speak to Steve about your business, please contact investments@livingbridge.com

Steve's column is featured monthly in Bdaily. 

 

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