Small Business

The key ingredient of leadership

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Over the years talking to some of the greats of business who have created household name business such as Seek, Bridgeclimb, Wotif, Aussie Home Loans, Wizard, Mortgage Choice and Oporto, just to name a few, the people behind these organisations never tell the truth, the whole truth, when explaining how they grew their business.

Now, it’s never because they are selfishly withholding their vital information that has made a difference. In fact, they are the opposite when discussing their business history of growth.

I published a book a few years ago called 350 Ways to Grow Your Small Business, which in its very title tells you they have given me 350 ways to grow a business. That came from 78 businesses — often award-winning ones — we had put under the spotlight over a five-year period.

The 350 tips we broke up into key categories and these were: staff, management and business strategies, customers, goals and maxims, products and services and finally — leadership.

Under management and business strategies, important business-saving practices such as cash flow management, setting budgets and creating key performance indicators to see if the business is heading towards the vision were covered.

Poor cash flow kills growing businesses and many business owners who have tried to grow a business have been frustrated because debtors are slow to pay. Some smart entrepreneurs have hired business managers who do the work where the founder is weak. Others have great accountants, who understand business growth but not all accountants are actually great at business.

Some of the great growers have paid for expert consultancy help, read books or joined business networks, where they hang out with people who are also growing businesses. A very small number do all of these wise innovations to create business growth.

But what about the prime ingredient for growth that the likes of Mark Bouris of Wizard, John Symond of Aussie Home Loans and Paul Cave of Bridgeclimb never give away?

Well, I covered it in my old book but it was never told to me by my subjects — I had to induce it from the story of success. That ingredient was leadership — leaders create growing businesses.

I’ve seen businesses fail and the owners have blamed red tape, unions, tariff reductions, higher currency and lower currency, the weather, the GST and of course staff.

My brother-in-law once had a successful franchise in a big shopping centre. It was a good centre, the rents were dear but the franchise was a solid one run by a great franchisor and business grower himself.

Brian always remembers one of his regulars, who never bought a cup of coffee, but always would yell out to him as he walked past: “Staff will bring you down.” The poor guy, clearly, had had a bad brush with business but had still not learnt the lesson — generally, poor leaders bring themselves down.

There are rare examples where a shock government decision can bankrupt a business, but in most cases enlightened risk management should mean a business survives a very rough patch.

It might mean a backward step but it should not lead to destruction.

The business experts always warn that a business can’t grow faster than the leader. John Maxwell, the author of Leadership Gold says, “Leadership, above all is courageous.” You have to confront yourself — your strengths and your weaknesses.

The new thinking from leadership experts is, and I love this advice — play to your strengths and make your weaknesses irrelevant.

Maxwell, who I recently met, says you have to lead yourself first and then develop and lead your people so they work in their strength zone.

The greats of Aussie growth businesses were great leaders who not only grew businesses but also grew people.

They didn’t tell the whole truth because it would have meant that they would have to blame themselves for their success and they would have been absolutely right.

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, October 12, 2011

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