Applied Wisdom for Start-Up Leaders: Practical Insights for Effective Leadership
Culture
Cultivate Culture
Culture underpins everything that happens in an organization. It is the leader’s role to set the tone and build a strong culture based not only on your organization’s goals, but on a core set of values.
There are three ways to develop an organization’s culture:
- Structure
- Processes
- People
For example, imagine that you want to develop a culture of accountability, where employees are held responsible for their work and overall performance. However, in the current organizational structure, even as your business grows everyone still reports directly to you. In this case the culture and structure are not aligned. The structure actually runs counter to the accountability goal you are striving for.
Processes work the same way and contribute to the culture you hope to build for your business. If you are working to develop a culture of accountability, a powerful process might be to hold a review of weekly goals and status updates with your team.
Finally, behaviors also contribute to culture. It’s important to be explicit about the behaviors that you value (for example, by including them in writing in your employee manual), then model those behaviors yourself, and reward people who model them also.
Respect and Trust Your People
As a leader, you are constantly being evaluated by your team on whether you treat people with respect and trust. As you bring new people into your business, hire the best people you can, and then trust them to use their judgment to do the right thing. If you don’t respect and trust an employee, perhaps you should evaluate their fit in your organization.
There are many ways for you to show regard for your employees, including:
- Encouraging personal discipline and healthy habits. Prioritize your own well-being and encourage your employees to do the same.
- Pay attention to the physical environment of your workspace.
- Establish policies that promote a reasonable work/life balance.
- Conduct research for your industry, location, and the positions for which you employ people to ensure you are providing a fair wage.
- Create opportunities for your employees to socialize and get to know one another as human beings.
Respecting and trusting people does not mean expecting them to be perfect. In fact, before making an employment offer, listen for at least two potential shortcomings that you are willing to live with.
Bad News is Good News
To be successful, a leader must master the ability to perceive, acknowledge, and respond to threats as well as opportunities.
Bad news is good news because it gives you a chance to address problems before they spin out of control. Reinforce the value of learning bad news early by rewarding early detection. Everyone within your organization should encourage frank discussions of bad news.
You must identify problems and then emphasize finding solutions rather than assigning blame. Even if someone has made a mistake, keep your eye on the solutions and thank those who bring problems to you early. Visit MOBI’s sessions entitled Adapting Your Business for Change and Saving Your Business to learn more about handling challenges in your business.
At Applied Materials, Jim Morgan saw bad news as an opportunity for innovation or a strategic shift. They had a saying: “Good news is no news. No news is bad news. And bad news is good news – if you do something about it.”
Planning
Develop Court Sense
With regard to your business, it’s important to develop “court sense,” to see everything that’s happening around you and rapidly adjust to changes. Court sense is the alert, action-oriented posture that sports like basketball demand for success. But it’s equally important in business.
To thrive in a complex world, you need to go beyond checking off boxes on your daily to-do list. You have to anticipate problems, process new information, and adjust your strategy.
Think about the driving forces that surround your business. These can include demographic shifts, changes among your competitors, changes in market conditions, supply issues, and many more. Develop practices for monitoring these driving forces and be ready to adapt on the fly as you learn new information.
Keep in mind that this type of nimble change can be taxing on your team. Transparency is your friend here. Let your team know what you are seeing and what driving forces are behind any changes you want the team to implement. Visit MOBI’s Adapting Your Business for Change to learn more.
Do the Whole Job
Businesses enter the market to offer products or services in specific areas where they have expertise. For your business to thrive, it is also important to develop strength in so-called “supporting functions” like marketing, sales, team development, hiring, compliance, and cash flow management.
Investing in people and infrastructure is essential. When revenues are strong, control your spending and aim to build a cash reserve that can cover three to six months of operating costs. When the economic climate changes, your organization will be well positioned. Cash is king. Raise it when you can; don’t wait until you need it. Always protect your downside. In other words, always be mindful of and protect against business risks.
Over time, without all the parts functioning well, the entire organization will suffer. Commit to doing “the whole job.”
Prioritize and Focus
Organizational success is a marathon, not a sprint. Many leaders and organizations run at an unsustainable pace that is reactive but not strategic. With limited time and resources, it’s essential to set priorities and focus on what’s most important.
It is a good idea to spend at least 10% of your time each week planning. Stepping away from the daily grind challenges you to slow down, reflect, and adjust your plans as needed.
One great practice is to use the “Rule of Three.” Start each day reassessing and affirming your top three priorities for that day. Have a separate list of priorities for the week, month, three months, and up to a year. You will of course do more than three things each day, but it is important to budget your time so that your top priorities are always front and center.
Priority management is much more powerful than time management. Make sure that all of your activities are moving you past short-term priorities and toward long-term goals.
Implementation
Book It and Ship It
One of the biggest challenges of leadership is moving ideas to action – implementation. In the manufacturing business, “book it and ship it” means “no more dithering (hesitations or wobbling). We’ve done our best here; now let’s put the decision in motion and see what happens.” If problems develop, you manage them.
Kicking the can down the road over and over, or postponing dealing with a problem, just takes away energy. Yes, time should be spent organizing, strategizing and planning, but success comes from the implementation of ideas, and this should take 90% of your and your team’s time.
Going from planning to doing requires courage and involves risk. You have to cultivate the habit of making timely decisions. Do your due diligence, then trust your instincts. It helps to remember that organizations in motion can alter course much faster than those that are stuck in one place.
Decisions create momentum when put into action.
Who’s Got the Monkey?
To create a culture of accountability, reinforce individual ownership of problems. If one of your employees comes to you with a problem – a monkey – make sure you do not take that problem onto your own shoulders. Holding a monkey means the person responsible cannot pass the problem to someone else. They must think through the consequences of decisions and try to solve the problems that arise.
Your role is one of “first assistant” to your employees, supporting them as they work through problems.
The following model provides a helpful view of different levels of initiative. It was first published in the Harvard Business Review back in 1974, written by William Oncken, Jr. and Donald L. Wass. Discuss with each employee which level of initiative you are expecting them to take when you delegate to them:
- Wait until told (the lowest initiative).
- Ask what to do.
- Recommend an action and wait for a decision.
- Act but inform at once.
- Act, then report on the decision in due course (the highest initiative).
This lets them know how much freedom and latitude they have, and exactly the level of ownership you are expecting from them in each situation. Holding your employees accountable also means that you need to invest in and support their development to higher levels of initiative.
People will make mistakes, but make sure they’ve got the monkey. If you step in and fix things for them, or punish them for reporting a problem, they will not make decisions.
Summary
These eight leadership principles are simple in nature yet can take a lifetime to hone and master. Give yourself the grace to make mistakes and improve, just as you do your employees. The fact that you are even considering starting a business says so much that is positive about you.
Keep your own journal of insights and leadership tips along the journey. When you look back years from now, you will see how far you’ve come, and you’ll have your own set of tips to pay forward to those who want to emulate your leadership.
To your success!
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About James C. Morgan
James C. Morgan is an influential nonprofit and philanthropic leader, based in Silicon Valley, who has worked extensively in the worlds of both for-profit and nonprofit organizations. He led the semiconductor equipment giant, Applied Materials, for nearly three decades — one of the longest tenures of any Fortune 500 CEO. He recounts those years, and the many lessons he learned, in his first book, Applied Wisdom: Bad News Is Good News and Other Insights That Can Help Anyone Be a Better Manager.
Visit Jim's full bio on the MOBI Contributors page.
More of Jim’s leadership tips are available in the free, downloadable booklets and
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