Saturday, 12 December 2015
Friday, 11 December 2015
Working ON Your Business not IN Your Business
The pressure on directors and leaders to be not only great role models but also to be involved in every aspect of the business. But successful leaders in any sector, no matter their personality or background, always have the ability to focus ON their business rather then IN their business. What does that mean in reality and if it is so successful why do directors get pulled into their business so easily, and what to do about it.
Directors: Being Pulled from Pillar to PostThe urge for directors to jump in to your business as the chief fire-fighter or executive management is the most natural reaction any director or owner has when it is under pressure to demonstrate their leadership. 'Keep calm I'm in charge' is the key message leaders want to portray. That position of fire-fighter extraordinaire (superman without the lycra) the man (mainly) who can, is a powerful pull to keep leaders hands on, but its also one main reason why companies don't succeed.
Directing is what a business expects directors to do in demonstrating their leadership skills. From making the big decisions through to setting an outstanding example to others, the pressure is always on to be seen be in the control and to be the ultimate arbitrator of problem solving. The problem is that while firefighting looks and feels vitally important, spending time working out why things have gone wrong is actually what is ultimately important, and what we directors should be investing our time and energies on solving.
The hardest task in doing the right thing as a leader is to know how and when to stand back and not get drawn into the day-to-day stuff in any business, by ensure they stay directing and making the future happen successfully. Its always easier to pick up someone else's ringing phone rather than educate them to do do it, but in doing so you've just become a firefighter rather than a director directing. Successful leaders have to learn how to stand back and understand what is happening and how to direct people to change their behaviour to change their activity to change outcomes.
Being a director is an official role, often a badge of great success and a role of not only legal significance but also as a role model of leadership. Leadership, the act of leading is about directing others towards an agreed shared goal, and that is where leaders deliver results.
The best leaders are the not the ones people see, but like great teams, from sports teams to kitchen chefs, where everything happens as if by magic and no-one can see how it is done, but like a great orchestra everyone knows their place, their role and how they contribute to the overall success of the business.
Directors: On It! Not In!Working ON the business, deciding where the organisation is going and why rather than IN, getting stuff done, is where people really see the value of an effective leader. That requires leaders to focus on both where they are going as well as how they a business is operating.
The biggest mistake leaders can make is wanting to be seen to be busy in the business. Being seen as doing something within the company process, directly adding to the value chain, while it is being seen can lead to the leadership looking sight of its real role, that of leading not working in. Being a 'hands on' person is one of the classic perceptions which people inside a company feel they need to deliver to be valued.
Directors Need to Be Seen
I've just worked with an advanced manufacturing client to develop an operations director who said in response to my suggestion "I can't be seen to sit down and read how to do something new, I have to be busy doing something so all my people can see me working hard." This classic trap, of having everyone working IN their business leaves no-one working On their business. Its an example of the classic challenge for leadership of being seen and being seen to be busy.
Being seen and involved in everything is part of being in charge, and able to offer advice, make decisions and drive people towards their objectives. The effect of having to be always seen is that directors have to be first to arrive and last to leave, draining the batteries of many directors particularly in rapidly changing companies.
Where being seen becomes the culture of leadership, suddenly everything has to be run past them which leads to vertical management structures, creating a lack of empowerment throughout the organisation which results in reduced moral and hierarchy control, putting further pressure on directors and undermining ownership as deference to authority becomes the normal acceptance. This change makes all decision making hierarchical, creating control and in result reducing flexibility to respond to changes, which no-one, the leadership, is now looking out for.
The other common problem with being seen all the time, having your door open at any time is that directors become the only people able to make decisions, resulting in increased pressure on directors to know what is going on. This pull factor into the day-to-day and the politics of micromanagement eats resources and kills innovation.
Successful leaders understand the importance of being seen effectively in business today is more about communicating when you are available and that you are available to them to provide dedicated support not just being there for people. Being seen therefore in today's business world is about being able to provide quality of time support not just volume of time. Keep your distance from the day-to-day, don't walk all over the management process and respect people's talents to solve problems rather than tell them how to do things.
Leaders must 'Know What's Going On'
Directors have to know what's going on, but the danger is that if you are working in your business as a director, then you can be a bull in a china shop, wildly spinning round treading all over other people, who aren't directors, and their roles.
Directors getting involved in every detail of every process within the business can lead to a culture of micro-management. Micro-management, where every decision is analysed and scrutinised by directors, not only undermines good employees but often leads to reactionary and damaging over-rullings of effective processes and procedures. Which leads more often than not on the process breaking down.
Knowing the process and how it works is vital for success, but micro-managing processes often lead to confusion on decision-making and the over-ruling of the existing tried and tested process.
What makes successful knowledge of what's going on, is the ability to see the process happening and recognise where it is under-pressure and where it needs resources to deal with the pressure points.
Being able to step back and see what is happening while not being dragged into the process is a vital ingredient for directors to lead from a position of overview knowledge not micro-managing detail, leave that to those who run each section. Let them own their area then they will care about it. Review how people are delivering and working out what support they nee rather than walking all over what they are doing unless things are going seriously wrong is the best behaviour leaders can demonstrate.
Leaders MUST Lead By Example
'Lead from the front, lead by example,' is first rule of any leadership development course. But it is also a phrase which is poorly understood, here's why:
'Leading by example' is one of the most commonly misunderstood terms leaders fail to appreciate and causes the biggest mistakes directors make in doing their job. When directors are told to lead by example they look at the role of the person they are demonstrating their leadership skills to and then they lead them by doing that person's role, not theirs. That
In doing that person's role they are not leading but replacing that person in doing the role. The result is that in leading by example directors do, but don't lead. Doing someone else's job is not leading or directing it is doing, the trap which anyone can of fall into, particularly when we are busy, under pressure or when we see someone not doing it as they should.
'I'll do it so it gets done,' mentality is the quick fix, but not the right solution. How will they learn unless they do it, not only in theory but day-to-day. The best help you can give someone is to train them how to do a job and ensure that they know why they are doing that job, reward them for doing it and motivate them to do it even better, but don't do it for them (unless you want to swap roles).
If you would like to learn more about how to work on your business as a leader and avoid becoming a leader working n their business, then click here to learn more: http://www.richardgourlay.com/leadership-is-all-about-vision-2/
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Tuesday, 1 December 2015
Wednesday, 22 July 2015
This afternoon I was writing some notes for a client for who I have just developed a new strategy with a flagship product to drive their position within their chosen market, and as I started to explain how to implement their social media it dawned on me that this would be useful to many other businesses owners and leaders as well.
The problem with social media is that people are always trying to sell on first meeting, like a new toy everyone wants to play with and some that just doing social media is like selling online. This inevitably fails. Why? Well it is like walking up to someone at a networking event shaking their hand, giving them your name and saying do you want to buy my product/service? What is the chance of success? Even for the most successful sales person it is going to be zero, or worse, even a realistic prospect will be turned off by this approach, because the audience does not know you, your products / services and is not tuned into to thinking about their needs or wants at that time.
Social media is not The Wolf of Wall Street
You would never just go up to anyone and start selling, this attitude comes close the perception of the 1980's (Think Wolf of Wall Street) which was typified by the ABC (Always Be Closing) approach to selling. It did not work then and it certainly does not work now. Yet in the field of social media where there is no personal handshake people forget that opening with a cheesy sales line is likely to result in someone reacting with an unfriend/disconnect approach or worse a negative review of what you do.
In the digital world of social media, the rules of engagement have not changed. People are still people, not fools and not mugs, so don't treat them like they are. A poor first impresssion reflects on you as the connector not on them as the recipient, with the added disadvantage that there is an audit trail and an attentive viewing and engaging audience, two things which can be more damaging to a brand than any traditional sales person could achieve on their own.
So here are the key steps I suggest you undertake in using social media to open up new markets and develop your customer base using social media:
7 Steps in Social Media Marketing
- Define your target customers and routes to them through researching target customers social media activity
- Connect to them using social media and identify conversations with them and direct them to open conversations on premises.
- Look at who is responding and looking for further information, support them with further information and options.
- Invite them to join your online communities (LinkedIn, Twitter, Pinterest etc)
- Connect with them personally with further information and add them to your existing marketing database, marketing as part of the funnel development.
- Listen to their engagement with you to engage with them when they are researching relocation.
- Then and only then can you can start selling to them.
These steps provide a good first principles in finding you way into the world of social media for companies looking to understand this new world order of social media. Look first to understand rather than to sell. Look at how people learn rather than tell them what to buy. Look at what people think and how they value information before you show them your products and services. Do these 7 steps in social media marketing and you will learn what works before entering the online social media world.
Social Media Marketing
You never sell and then market. Marketing is about identifying and targeting the right prospects who you then move at their pace towards your products and services. Once the customer moves towards you then you can market to them until they are ready to be sold to. By marketing effectively first you can then sell efficiently to customers. So market yourself online first and then sell to buyers really to buy.
I hope that helps you think about how to deploy a social media strategy and not try to sell at first connection. IF you would like to learn more about social media then click through my blog posts to see more: http://cowdenconsulting.blogspot.co.uk/2012/10/normal-0-false-false-false-en-gb-x-none.html
Learn more at www.richardgourlay.com
Monday, 6 July 2015
When leaders think about risk management in business they are too often talking about legal compliance. This is a common misunderstanding of risk by leaders, not seeing risk as primarily a strategic issue in business. This view of risk misses the strategic elements of risk, which leaders need to consider in defining their business model and in making strategic decisions. From start-up to exit risk is a strategic issue, which should underpin all strategic thinking.
Developing leadership risk skills is an important element for leaders to understand that their approach to risk defines how the lead and what they lead. Strategic risk defines the type of business model that leaders develop through to which markets and where in them they choose to operate.
Drawing up lots of rules and making sure that all employees follow them on the other hand can solve operational risk. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management focuses on legal requirements, not complete risk management.
Understanding strategic risk and learning to how to manage key business risks throughout your business is an important skill set for leaders to develop in establishing their judgment in risk considerations and ensure they are integrated into strategic thinking. There are two parts to risk, firstly identifying your strategic risk and then secondly how to actively manage the identified risks, which this article covers. If you would like to know more about strategic business planning then click this link here.
Here are some key questions to consider in identifying strategic risk:
1. Risk Appetite
The first stage in managing risk is to look at the leadership team and its surrounding stakeholders, both formal (Board, NED, shareholders) and informal (employees, advisors, channel partners) to map out the appetite to risk. The leaderships' risk appetite determines the overall approach the business will take to risk. Risk is always directly linked to reward, take no risk and you take no reward. Conversely take high risk and you could achieve high reward, but equally high failure. The more the leadership diversifies from its core skill sets it also increases the risk it takes. So risk is linked to the sector you are operating in, established and known is lower risk than emerging and unknown.
2. How well is your strategy defined?
Without a strategy your business is at high risk. If the leadership does not have a clear and articulated strategy, which is shared and owned, then the business is vulnerable to strategic drift, living in a dream and is without clarity and purpose. Having a strategy in place, provides the context of the business, with strategic goals, intent in positioning and outcomes defined which enable the business to drive forward. To learn more about strategy click here.
3. Strategic Risk Analysis
A business strategy must define the risk environment within which it operates. Strategic risk starts by looking at the risk of entering a market compared to the risk of not entering a market. Strategic risk management should compare not only the risks of the strategy but the reverse risks of not doing the strategy, the gap risk of missing the opportunity.
Strategic risk also covers risk analysis of the leadership and its approach to risk, how comfortable it is with risk reflects in how leadership teams actively manage risk which reflects its established risk skill set and appetite to risk across the board.
4. Strategic Risk Assessment
Risk, any risk is defined by the potential impact of the consequences from it. The manifestation of its likelihood of occurring is the assessment which must be undertaken, this is often scrutinized by undertaking scenario analysis (driven by board, NED and expert support and advisors) will encourage the leadership to consider a range of scenarios that can result in significant adverse consequences for the business and assist the leadership to make sure full width and depth analysis of strategic risk is undertaken.
This assessment provides the basis of mapping the risk and determining the investment in mitigation required to reduce or remove that risk.
5. Strategic Risk Mapping
The leaders must see risk in the context of how shareholders or stakeholders measure value in the organization. This essential mapping of risk enables the leadership to articulate to stakeholders how the risks they are taking or the risks the business is exposed to may affect the organization’s ability to realize its strategic goals. By identifying common metrics for risk and performance also allows the leadership to define the priorities of risk management activities and focus on the mitigation of relevant and important and decision defining risks the board.
The second step, in creating an effective strategic risk management system is to understand the qualitative distinctions among the types of risks that a business could face and determining how to actively manage those risk. Risks typically fall into one of three categories and here's how leaders should be managing them:
1. Managing: Strategic risks.
The leadership having determined the level of risk it is willing to take in order to generate the returns from its strategy, its risk and reward profile, leaders must then develop appropriate channel partners to achieve that strategy. From its bankers credit risk, its strategy of launching new products through to its channel partner selection, all these decisions impact upon the strategic risk strategy.
Strategic risks are quite different from operational risks because they are not inherently undesirable; they are quite the reverse they are deliberately accepted as part of operating within that industry. A strategy with high returns requires the business to take on higher risks, and actively managing those risks is a key driver in achieving those potential gains.
Strategic risks cannot be managed through a rules-based control models, such as compliance to legislation. Instead, the leadership must install a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur. Such systems enable companies to take on higher-risk, higher-reward ventures by identifying drivers of strategic risk, most often these are identified through 5 Forces analysis within markets and systems usually include primary (and secondary fallback) detailed objectives which must be achieved which underpin the strategy to actively manage the strategic risks.
2. Managing: External risk factors
Certain strategic risks arise from events outside the company and are beyond its influence or control, often identified through PESTLE analysis. These major macroeconomic risks are outside the market but directly influence it. PESTLE identification and analysis enable leaders to manage the external risks effectively, through proactive identification and mitigation of their impact. For example changing economic conditions may raise global interest rates, which put pressures on even successful businesses, which impacts upon costs and profits.
Businesses need to build a defined risk management processes to these different PESTLE categories. By identifying key drivers of external change leaders can devise stress testing through scenario planning and devise alternative strategic options should external risk factors come into play.
3. Managing: Preventable internal risks.
Conversely internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided. Businesses should have well defined internal risk systems in place which includes a tolerance level, such as 95% of all calls must be answered within 3 calls, in other areas health and safety for example mandatory 100% requirements for the use of PPE and operating systems must always be in place.
Businesses should seek to eliminate these risks since they get no strategic benefits from taking them on. This risk category is managed through active prevention by monitoring operational processes and guiding people’s behaviors and decisions toward desired norms.
Identifying and managing preventable risks is about good management of existing best practices within the legal and industry best practice. Companies cannot anticipate every circumstance or conflict of interest that an employee might encounter, so ensuring that risk is talked about, reviewed and assessed against best practice.
Managing Risk effectively
Risk is a difficult subject for leaders, precisely because it is seen as an operational detail rather than strategic in nature. Business planning sets over optimistic forecasts, from unrealistic timescales to launch new products and services through over inflated revenue streams. This form of linear extrapolations, how leaders have done it before will be immediately repeatable with something new is compounded by the use of conformation bias, selectively picking supportive data and ignoring unsupportive data. This form of groupthink often limits the risk discussion by narrowing the discussion down to it will happen rather than taking a holistic approach to risk.
Other key drivers of strategic risk failure come from leaders ignoring industry activity, how fast and quickly competitors will react to any new strategic initiatives to minimize their impact upon the status quo and how channel partners and customers will sound supportive but will measure the risk to them and mitigate it by limiting their exposure to risk. How industries react to change is one important consideration from an effective 5 forces analysis of any market. How do they players react to change is often analyzed by war-gaming with scenarios played out in theoretical games to see the impact of industry competition.
By strategy mapping your business leaders can often assess all risks linked to objective setting, looking at risk events associated with each objective and generate a risk profile for each risk and associated mitigation strategy.
Recently the adoption of the balanced scorecard has become a major way of mitigating risk, by linking mitigation to performance driver indicators of behavior within the organization. This highly effective risk management tool enables companies to engineer risk out of departments through positive mitigation strategies.
For areas of risk which cannot be mitigated from within the company, such as natural disasters or acts of terrorism, then developing contingency plans act as mitigation to unforeseeable external risks. Not putting all leaders on the same plane is a simple example of contingency planning as is having secondary operational site, should your primary site be unusable from either natural causes such as flooding or from acts of terrorism.
Like to know more about strategic business planning then learn more through my video course on strategic business planning, which will reduce your risk in succeeding within your market, then click this link.
Good leaders embrace risk, they do not avoid it and investing time and skills into understanding and actively managing risk is an important element of leadership. Good strategic planning encompasses strategic risk assessment and leadership teams need to invest in understanding their risk if they wish to succeed in their market.
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