From the July 4, 2003 print edition
This is the second of an eight-part casual series on business transition issues.
The first article in this series addressed the importance of business transition planning and introduced the Seven Critical Issues of Business Transition Planning. Following are a few thoughts about the first of the seven:: leadership.
Talent, knowledge and skill: Most business owners and entrepreneurs see their key role as leadership. Of course they are the leaders — ergo, leadership.
I’ve observed numerous business owners in the small-to-medium business sector base their leadership mostly on their technical expertise and intuition, rather than business knowledge and skill.
Hundreds of books have been written on leadership, and if you are lucky enough to find the more cogent and practical ones, you will find that leadership “experts” mostly agree that leadership has three elements: talent, knowledge and skill.
Talent, enhanced by technical knowledge and intuition, will not get you as far as talent enhanced by core business knowledge and the skills you develop in applying that knowledge.
John Wooden credits his success in building championship basketball teams to finding the talent, then helping to add knowledge and developing the players’ skills.
Talent is essential, but it is magnified by knowledge and skill. The result should then equip the leader to “play the game” at a higher level.
But hold on — let’s take a closer look at what talent, knowledge and skill should enable the business leader to accomplish.
First and foremost is the predictability of a profit. As Peter Drucker says, “only excellence earns a profit.” Successful business leaders develop excellence that enables a profitable outcome. Excellence relies on the contribution of knowledge and skill.
In fact, most successful leaders are committed learners. They know that knowledge can be the strategic advantage for a leader in today’s knowledge-based business environment.
Also, our current business environment is exacerbated by rapidly increasing change. In his book “Business @ the Speed of Thought,” Bill Gates says there will be more change in the next 10 years than we saw in the last 50 years … a daunting thought in regard to the impact on business.
What is the antidote? Well, there can’t be a perfect antidote, but knowledge — and the skill in applying that knowledge — may be the next best thing.
Execution: So what are the key leadership skills? I argue that execution is at the top of the list. Execution that produces predictable profitability has many facets, but the “diamond” is execution. Execution is the major job of business leaders.
Developing the strategic plan to identify the key steps to achieve the corporate goals is just the first step. Implementing the plan is the challenge. Not many businesses do it very well.
In fact, research conducted by the Balanced Scorecard Consortium reports that 90 percent of businesses execute poorly.
Competent business execution requires a system with discipline and accountability to bring it to life. This is the stuff that makes leadership work.
For a leader, the ultimate test is, where will the followers follow? Ultimately we all want to be on a winning team.
Show me a leader who can articulate a vision, create a drive for excellence and execute the steps to achievement, and you will have the unique and valuable resource that all stakeholders are looking for — the leader to take you to predictable profitability.
That’s the kind of leadership that can get a business through the various transitions to the ultimate end-game, be it family succession, expansion, contraction, merger, management acquisition or sale.
Competent leadership provides these kinds of options. Leadership knowledge and skills can be learned. Are you in the game?
Hal Johnson has been CEO of eight companies and has authored two books on mentoring business performance. He is chairman and CEO of LeadershipONE, a business transition consulting firm. He may be reached at (916) 391-3042 or at [email protected].
© 2003 American City Business Journals Inc.