In turbulent economic times, building leadership capacity in your company is more critical than ever, says BDC President and CEO Jean-René Halde. "Everything we do happens through people. We bet on people, not strategies or systems," he emphasizes.
Always room for improvement
For Halde, the high rate of failure among small businesses in Canada can often be attributed to leadership shortcomings in key areas such as human resources management, strategy and “soft skills” such as employee communication. "This is particularly true in a globalized business environment, where the stakes have changed dramatically. It's much more difficult to be an entrepreneur today than it was 5 to 10 years ago. How we did business in the past is not a guarantee of success in the future," he adds. "Leadership is the key driver of best practices, innovation and productivity. It's not surprising that there is strong correlation between leadership development and how companies perform."
Whether at the helm of a small company with a few managers or a bigger player, you can probably benefit from applying best practices in leadership. Although there are no set recipes for success, BDC's president and CEO offers some practical advice.
"A leader with vision makes sure that people have a clear understanding of where the company is going and what is expected of them," says Halde. "Your role is to be a positive and motivating influencer. You want to get people excited and behind your goals." For example, if you need to improve your customer service, you need to set clear objectives and rally people to achieve them, he explains. "That might involve systematic, face-to-face meetings with your team to monitor progress."
Know your weaknesses and strengths
A good leader also has to be aware of where a company falls short. "Be sure that you have clear insight into your strengths, weaknesses and blind spots. Once you recognize these, you're better able to focus on what you do best and see exactly where you may need some help," says Halde. For instance, you might be able to fill a gap in your skills by hiring an external consultant.
"You can't do it all yourself," emphasizes Halde. "The failure to delegate is probably one of the biggest challenges for many entrepreneurs, who often micromanage." He encourages business owners to recognize the strengths of other people on their team and to tap into those strengths. "It's important to learn how to surround yourself with competent people. By delegating, you're also developing employees, which is crucial to the long-term stability of your organization, particularly in challenging economic periods. People will most often rise to the challenges offered."
“Leadership training is also important to ensure that employees have the skills to move a company forward, especially in tougher times,” says Halde. For instance, your people may lack the problem-solving skills needed to help your company deal with common challenges such as operational inefficiency and low productivity. "Formal academic training programs may fail to engage people. A better strategy today, for example, is to ensure that your more experienced managers are coaching other team members and sharing their knowledge with them. Or you may want to get external help," he adds.
Good communication skills are also an imperative for successful leaders. “The first step is being fully transparent with employees and letting them know exactly where the company stands and where they stand," Halde advises. "Be yourself and don't put on a mask. People will recognize whether you are being genuine or not. Your employees need as much information as possible to help you reach your company's goals. Holding back that information can only cause problems down the road," he says.
"Leadership is not about winning a popularity contest. Your goal is to be respected but not feared. You have to show that you are fair in your dealings, competent and a good coach," Says Halde. Strong leaders also have to be able to make hard decisions and focus on getting results. "Get all the cards on the table and address conflicts and challenges directly and tactfully. In the end, people will respect you more for your openness."
Another excellent leadership strategy: do unto others as you would have done unto you. "And always say thanks for a job well done. The fact is, it simply encourages better performance," Halde says. Apart from obvious perks such as compensation and bonuses, people genuinely need honest feedback. "When you're asking people to pull out all the stops, especially during difficult times, you want to show your appreciation for a job well done, which also builds employee loyalty."
A final bit of advice for strong leadership? "Networking is a leader's best friend, particularly for small and medium-sized enterprises," he believes. "Smaller companies often need to connect with other businesses, for example, to share experiences and learn from one another." Strong leaders know how to reach out and build beneficial partnerships and alliances. "Networking is also one way to keep abreast of trends and maintain your visibility in a highly competitive market. In today's global environment, no one can do it alone!"
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.