Leadership has been in the news lately. In Australia we have had comments on the role played by the political and emergency services leadership (i.e. lack of) during the Black Saturday of 7th February 2009 when so many lives were lost to the bushfires.  In the US questions are being raised regarding President Barack Obama's leadership in the Gulf of Mexico environmental disaster.

It is not for me to comment one way or another on either situation.  However reading the discussions about the leadership roles and responses lead me to think, at a much more mundane level, about your leadership role in your small business.  Coincidently my colleague Andrew Young (Directed Focus) recently carried out a small business survey which found that leadership was a more burning issue than sales, finance or planning.

Assessing leadership in a small business is not easy. Effective leaders provide direction and create a supportive environment.  Leaders have to:

• Set the strategic direction for the business (i.e. - where it is going, what it wants to achieve); that is, get the big issues right;
• Make sure all parts of the business work together.
• Encourage people to achieve the objectives they set.

At the same time, given the nature of a small business you no doubt also have responsibility to "do" some of the operations of your business whether it is on the tools or actually providing the service.

Staying on the tools is a trap many technical trade-based small business owners fall into.  If you are going to have a "business" and not just a job you need to spend time on the direction and management of the business, to provide leadership for your business.

This does not mean that you should not do technical work or be involved in service delivery but ultimately the business must be both directed and managed.

A key decision you need to make is whether, for example, you are going to be a "builder" or to run a "building business".  

Make the former decision and you will do more "doing" than "leading".  You will have a job not a business.  

If you make the latter decision then the leadership you provide becomes important.  You will be judged, and judge yourself, on the results being achieved.  These will include:

• Setting the direction of the business - without leadership, the ship that is your small business will aimlessly circle and eventually run out of power or run aground.
• Driving sales - without increasing sales you will not be able to justify the resources to free yourself up to manage the business;
• Developing a track record of profitability;
• Documenting systems and procedures which enable that profitability to be replicated by others;
• Ensuring that there is management data and information on which to base decisions.

So you are not fighting fires or oil well disasters but even small businesses have 'spot fires' they must deal with.  What is your leadership like?  Are you providing direction, driving sales and helping you people meet your business's objectives?

© Copyright 2010 Adam Gordon, Profits Leak Detective

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