Effective business leaders combine visionary thinking with strong management skills to inspire and guide their teams, balance competing interests, and foster a culture of continuous learning and improvement, ultimately driving profitability and consistent cash flow.
Primary Implication
Dysfunctional business leadership affects every aspect of your business model, from sales and operations to financial management and employee morale. Any business leader not up to being the leader a business needs will undermine productivity leading to higher operating costs, profit losses, and no cash reserves in the bank.
Overview
Leaders of profitable businesses with predictable cash flows don’t rely on their position or power as a means of daily influence. They connect people to their vision of what needs to be done and how they’ll know it’s done through the goals and objectives they have set for the business. A business leader is valued for their ability to step up in times of crisis, and for their ability to think and act creatively in stressful situations.
Effective business leaders also possess well-developed management skills to see that outcomes are measured and compared to what they had planned to do. They use their brains to think things through so they can make rational judgments, not irrational assumptions. They do this because they know irrational actions leads to stress, frustration, and loss. That stress causes people to do stupid things, and when people are angry, they become less rational, fair or objective.
One of the significant challenges leaders face is in sharing their vision for the business through the goals and objectives they set with those needed to realize them. An effective leader does this so that those needed will want to do what needs to be done willingly. This is best accomplished by providing the information, knowledge, methods, resources, and training to realize the goals and objectives for the next twelve months.
Another challenge leaders face involves the coordination and balancing of conflicting interests of all employees and stakeholders to the business. A GREAT business is never a well-oiled machine 100% of the time. Instead, it is a business-led by an individual that understands the relationships of its parts. They know who is accountable for what and where the critical hand-offs across functions performing separate tasks need to occur to get paid for the work you sold and performed for the customer at a profit. Knowing this is how an effective leader manages the decision trade-offs that exist.
A GREAT business exists when goals are set, outcomes are measured, and the two compared. The best success is when the goals are realized. Whenever your best intentions fall short of producing your desired results, there is still great value to be captured through learning what you did wrong and where you will improve. Influential leaders are always learning what worked, what didn’t, and how they will do things differently, going forward.
