Management

Leading in difficult times

Colonel Tom Kolditz, in extremis leadership expert as Professor and Head of the Department of Behavioral Sciences and Leadership of the United States Military Academy at West Point - on the current economic crisis

24 February 2009 - Our current global economic crisis has leaders at all levels - from heads of firms to heads of families - asking what they should do to lead in these difficult times.  We can learn from people for whom crisis conditions and dangerous contexts are a characteristic of their employment.  Lessons from professional in extremis leaders transfer nicely to leading to the bottom of the economy, and beyond.

Danger is inherently motivating. 
People who are fearful about their futures are already motivated by conditions; they need quiet competence, not a cheerleader or an angry boss.   People who are afraid usually prefer clear direction and an unemotional delivery.  Never arouse their fears in hopes of increasing motivation—fear mongering as a form of influence is the height of irresponsibility in a crisis.  If you need to plan through worst case scenarios, keep that among your closest advisors.  The leader’s job in crisis is to portray believable light at the end of an uncertain tunnel. /p>

Focus outward, and learn.
Focus on the environment that threatens, and learn about your situation.  Watch enough news to be informed, and stop watching when it inevitably becomes repetitive.  Resist the temptation to focus inward on yourself (leading to emotionality) or to drill into the organization (leading to collective insecurity and panic).  Never finger-point or assign blame during a crisis—it can be viewed as an abdication of personal responsibility, and part of the crisis you’re trying to control.  Accountability can wait.

Extreme threat reveals the true character of leaders and followers. 
One of the best things about a crisis is that it reveals who people can count on, and who people can’t.  Be the former.

Use the life altering character of your role to inspire. 
Chances are that the survival of your financial position affects more than your personal well-being.  Leaders in crisis are fate makers in that their work helps determine the destiny of other people.  Inspire yourself and your organization by reminding yourself that you’re not in business solely to profit.

Leaders are physical beings. 
Work out, drink less, and eat well.  Your physical condition is important in crisis.  Fit leaders are better able to handle stress, and a disciplined lifestyle projects control to those who are gauging the seriousness of the situation from observing your behavior.

Sharing risk and misery enhances credibility.  
  In crisis, people find it difficult to trust a leader who is working from a position of advantage relative to their own.  Highlight the common threat, and the common consequences of failure.

From Colonel Tom Kolditz, in extremis leadership expert As Professor and Head of the Department of Behavioral Sciences and Leadership of the United States Military Academy at West Point.

Business Planning

A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals.

Business Plan

The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.

The business plan is a necessity. If the person who wants to start a small business can't put a business plan together, he or she is in trouble.

Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan.

Before you begin writing your business plan, consider four core questions:

• What service or product does your business provide and what needs does it fill?
• Who are the potential customers for your product or service and why will they purchase it from you?
• How will you reach your potential customers?
• Where will you get the financial resources to start your business?

• How to write a business plan

S.W.O.T Analysis

Strengths, Weaknesses, Opportunities and Threats

Definition: SWOT analysis is an evaluation tool which can help you identify your business’s and your own strengths and weaknesses and the opportunities and threats present in your business environment.

A scan of your internal and external environment is a crucial part of the strategic planning process. Environmental factors that are internal to your company usually can be classified as strengths (S) or weaknesses (W), and factors external to the firm can be classified as opportunities (O) or threats (T).

SWOT analysis framework

SWOT analysis is a very effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face. Carrying out an analysis using the SWOT framework helps you to focus your activities into areas where you are strong and where the greatest opportunities lie.

• How to carry out SWOT analysis

• SWOT analysis template

• Swot analysis example

Time management

There are only 24 hours in the day – time management is about making the best of your time, prioritising your work and identifying what you can reasonably hope to achieve in your working week.

By employing smart time management strategies you can ensure you complete your projects on time and you may even find you free up more time for new projects. If you use these time management strategies well, then you will be able to function effectively, even under intense pressure.

At the core of good time management is an important shift in focus – concentrate on results, not on being busy

Many people spend their days in a frenzy of activity, but achieve very little because they are not concentrating on the right things. The '80:20 Rule' argues that typically 80% of unfocussed effort generates only 20% of results. The remaining 80% of results are achieved with only 20% of the effort. While the ratio is not always 80:20, this broad pattern of a small proportion of activity generating the bulk of returns recurs so frequently as to be the standard in many work patterns.

Here are four practical strategies for mastering effective time management

• Six Steps to Avoiding the Time and Stress Trap
• How-to: To-do lists
• How-to: Costing your time
• How-to: Activity logs
• How-to: Effective scheduling

Quick tips to find more minutes in your day

If you need more than 24 hours in a day but don't have the energy for a major scheduling overhaul, here are some quick time management tips you can start using now to help you squeeze a few more precious minutes out of your day.

1. Use your waiting time. Waiting for other people shouldn't be an active, time-consuming part of your day. For the inevitable times when you must wait, find ways to put even a few minutes' waiting time to good use. Whether on hold on the telephone or waiting for a meeting or appointment, you can make lists, sort mail, go over your schedule, or complete small but necessary tasks.
   
2. Stock up on the small items you frequently run out of or make special trips to purchase. In the work environment this might be postage stamps, stationery and printer cartridges but even having change for the parking machine and greeting cards for different occasions can save valuable time. Over time, the minutes saved on these trivial errands will add up.
   
3. If you have an urgent task to complete, turn off the telephone until the job is done. If it is important the caller will leave a message.
   
4. Make medical and dental checkup appointments well in advance (months if necessary), and ask for the earliest morning appointment. If the practice takes a midday break, you can also ask to be placed first on the afternoon schedule. That way, you'll be seen immediately and won't waste time in the waiting room.
   
5. Capitalise on your energy levels. You know when you're at your peak mentally and physically; schedule the most demanding tasks for these periods. You'll work more efficiently and save time.
   
6. Use reminder services to keep track of important dates or events – use your computer’s diary system like Microsoft Outlook or your Palm Pilot device. Program them well in advance to remind you of anything you don't want to forget or miss.
   
7. In the office, cultivate a friendly but businesslike personality while at your desk. Remain polite but unwelcoming to those who want to interrupt while you're busy. Being always available to unannounced visitors or coworkers eager for a chat can eat up a major portion of your day. Limit socialising to areas away from your workspace, so you're projecting a consistent message.
   
8. If you need to schedule meetings or appointments that have the potential to drag on indefinitely, schedule them carefully. Try scheduling them right before lunch or near the end of the business day. With everyone thinking of getting away for lunch or for the evening, there's less potential for a marathon session.

Leadership

Leadership does not come with a definitive handbook but it can help to understand your leadership style and its strengths and weaknesses. There are a host of recognised leadership styles but there are four key defined styles — autocratic, bureaucratic, laissez-faire and democratic. Increasingly, there is an acceptance that leadership styles must be adapted to suit the environment and the situation — there is no single leadership style that suits all situations. This phenomenon is known as “situational leadership”.

Four of the most basic leadership styles are:

• Autocratic
• Bureaucratic
• Laissez-faire
• Democratic

Autocratic Leadership Style

This is often considered the classical approach. It is one in which the manager retains as much power and decision-making authority as possible. The manager does not consult employees, nor are they allowed to give any input. Employees are expected to obey orders without receiving any explanations. The motivation environment is produced by creating a structured set of rewards and punishments.

This leadership style has been greatly criticised during the past 30 years. Some studies say that organisations with many autocratic leaders have higher turnover and absenteeism than other organisations. Certainly Gen X employees have proven to be highly resistant to this management style.

These studies say that autocratic leaders:

• Rely on threats and punishment to influence employees
• Do not trust employees
• Do not allow for employee input

Yet, autocratic leadership is not all bad. Sometimes it is the most effective style to use. These situations can include:

• New, untrained employees who do not know which tasks to perform or which procedures to follow
• Effective supervision can be provided only through detailed orders and instructions
• Employees do not respond to any other leadership style
• There are high-volume production needs on a daily basis
• There is limited time in which to make a decision
• A manager’s power is challenged by an employee
• The area was poorly managed
• Work needs to be coordinated with another department or organisation

The autocratic leadership style should not be used when:

• Employees become tense, fearful, or resentful
• Employees expect to have their opinions heard
• Employees begin depending on their manager to make all their decisions
• There is low employee morale, high turnover and absenteeism and work stoppage

Bureaucratic Leadership Style

Bureaucratic leadership is where the manager manages “by the book”. Everything must be done according to procedure or policy. If it isn’t covered by the book, the manager refers to the next level above him or her. This manager is really more of a police officer than a leader. He or she enforces the rules.

This style can be effective when:

• Employees are performing routine tasks over and over.
• Employees need to understand certain standards or procedures.
• Employees are working with dangerous or delicate equipment that requires a definite set of procedures to operate.
• Safety or security training is being conducted.
• Employees are performing tasks that require handling cash.

This style is ineffective when:

• Work habits form that are hard to break, especially if they are no longer useful.
• Employees lose their interest in their jobs and in their fellow workers.
• Employees do only what is expected of them and no more.

Democratic Leadership Style

The democratic leadership style is also called the participative style as it encourages employees to be a part of the decision making. The democratic manager keeps his or her employees informed about everything that affects their work and shares decision making and problem solving responsibilities. This style requires the leader to be a coach who has the final say, but gathers information from staff members before making a decision.

Democratic leadership can produce high quality and high quantity work for long periods of time. Many employees like the trust they receive and respond with cooperation, team spirit, and high morale.

Typically the democratic leader:

• Develops plans to help employees evaluate their own performance
• Allows employees to establish goals
• Encourages employees to grow on the job and be promoted
• Recognizes and encourages achievement.

Like the other styles, the democratic style is not always appropriate. It is most successful when used with highly skilled or experienced employees or when implementing operational changes or resolving individual or group problems.

The democratic leadership style is most effective when:

• The leader wants to keep employees informed about matters that affect them.
• The leader wants employees to share in decision-making and problem-solving duties.
• The leader wants to provide opportunities for employees to develop a high sense of personal growth and job satisfaction.
• There is a large or complex problem that requires lots of input to solve.
• Changes must be made or problems solved that affect employees or groups of employees.
• You want to encourage team building and participation.

Democratic leadership should not be used when:

• There is not enough time to get everyone’s input.
• It’s easier and more cost-effective for the manager to make the decision.
• The business can’t afford mistakes.
• The manager feels threatened by this type of leadership.
• Employee safety is a critical concern.

Laissez-Faire Leadership Style

The laissez-faire leadership style is also known as the “hands-off¨ style. It is one in which the manager provides little or no direction and gives employees as much freedom as possible. All authority or power is given to the employees and they must determine goals, make decisions, and resolve problems on their own.

This is an effective style to use when:

• Employees are highly skilled, experienced, and educated.
• Employees have pride in their work and the drive to do it successfully on their own.
• Outside experts, such as staff specialists or consultants are being used
• Employees are trustworthy and experienced.

This style should not be used when:

• It makes employees feel insecure at the unavailability of a manager.
• The manager cannot provide regular feedback to let employees know how well they are doing.
• Managers are unable to thank employees for their good work.
• The manager doesn’t understand his or her responsibilities and is hoping the employees can cover for him or her.

Varying Leadership Style

While the proper leadership style depends on the situation, there are three other factors that also influence which leadership style to use.

1. The manager’s personal background. What personality, knowledge, values, ethics, and experiences does the manager have. What does he or she think will work?
   
2. The employees being supervised. Employees are individuals with different personalities and backgrounds. The leadership style that a manager uses will vary depending upon the individual employee and what he or she will respond best to.
   
3. The company. The traditions, values, philosophy, and concerns of the company will influence how a manager acts.

Characteristics of good leaders

• Clear objectives — destinations are very important when you want people to follow you there
• The ability to pay attention — audit developments to see if you are making progress towards your objective
• Flexibility — when something is not working, you do something else

Fostering innovation and creativity – the new leaders

Innovation and creativity are no longer business extras. Instead they have become key drivers for new products and profitability in New Zealand’s increasingly competitive markets. To foster innovation and creativity in business requires a special type of leadership.

Entrepreneurial Leadership

Entrepreneurial leadership involves instilling the confidence to think, behave and act with entrepreneurship in the interests of fully realising the intended purpose of the organisation to the beneficial growth of all stakeholders involved.

In the new era of rapid changes and knowledge-based enterprises, managerial work becomes increasingly a leadership task. Leadership is the primary force behind successful change. Leaders empower employees to act on the vision. They execute through inspiration and develop implementation capacity networks through a complex web of aligned relationships.

One of the key elements of highly effective leadership is the refusal to believe that a business model, however sound and well crafted, is ever good to run on autopilot. Recognising this, the most successful leaders continuously improve their models by engaging in a perpetual process of interactive learning.

• How-to: Leading Innovation

• Leaders as entrepreneurs