Bordeaux - Place des Quinconces

When a business plateaus against expectation, refuses to grow beyond a certain size or repeatedly makes the same mistakes we tend to look at the market, our competitors or internally to processes and people. A review should, and generally does, start with leaders and tends to focus on “are they aware?”, “why hasn’t it been fixed?”

Surprisingly often the answer is that they are aware and are working very hard to address the symptoms of what is going wrong, without identifying the causes. They’re lost in the detail!

 

What does this mean?

Addressing a crisis, resolving complex problems or taking a business to the next level requires concerted effort. This necessitates strong leadership and if an organisational leader forgoes this role to spend their time executing or running from fire to fire there is nobody to set direction or ensure everyone is working towards it. In this situation the best outcome is that superficial improvements are made, but generally results stay the same or get worse.

Why does this happen?

There are four common scenarios that result in leaders stuck in the detail.

Capability

Few people are natural leaders and almost nobody is a natural manager. Both roles are highly skilled and require both learning and experience to be effective. As you become more senior the learning curve becomes ever steeper. Despite this we promote people who have excelled in functional roles and expect them to lead a team or department with little or no support. It doesn’t work!

So what do we do about it?

There are no magic bullets here. The important thing is not to promote people further and faster than they are able to cope and ensure they understand what is expected of them.

  1. Create clear accountabilities. For example, requiring a newly promoted manager to set their own KPIs without guidance is unlikely to get the best result as they rarely have the knowledge to identify where they can bring most benefit.
  2. Provide direct support. As they become more skilled this can be reduced, but strong support early on can avoid a lot of problems later. This means you set regular meetings and treat them with the importance they deserve. If you start delaying, cancelling or co-opting the meeting it stops being valuable.
  3. Formal learning. Courses like MBAs or a Masters of Management and more junior equivalents are specifically designed to provide the broad range of knowledge and give invaluable grounding.
  4. Mentoring / Executive Coaching. Someone who has been there before, but isn’t tied to business outcomes can provide an unbiased sounding board and help refine key soft skills.

 

Desire

When a promotion comes available there is generally a lot of pressure for strong functional performers to apply and take the promotion. Better pay, prestige and career aspirations all contribute pressure both personally and socially. A functional specialist who has been successful in their role may not fully understand that they are taking on a very different role and once in place are reluctant to give up the benefits or are unable to go back to their previous role.

When stuck in a role where the work you excel at and enjoy is performed by your staff, it becomes very tempting to help them with their interesting problems and assist as a subject matter expert. The temptation is even stronger if you also have a capability gap to your role. The impact of this is twofold as not only is there a leadership vacuum but the remaining staff lose the opportunity to grow.

So what do we do about it?

  1. Succession Planning. Actively prepare succession plan, provide candidates with opportunities to operate in more senior position (e.g. leave cover).
  2. Try before you buy. Prior to making a permanent promotion into leadership give them a 6 month stint in the role. At the end of this have an open and honest conversation about how it has gone and then either return them to their role or make the change permanent.
  3. Give people options. If you promote people without a trial period then give them the option to go back to their previous role if it doesn’t work out. They may not take the option but at least you have a chance of retaining a valuable staff member.

 

Resourcing

time-does-not-exist2

This is a tricky one. Despite best efforts a spike in workload can catch you by surprise. If you are under resourced, missing staff with key capabilities or it is a planned response, rolling up your sleeves and helping out where you can is good leadership. If unplanned resourcing shortages are a constant problem however, then they are a symptom that can distract from identifying and resolving the core problem.

So what do we do about it?

  1. Schedule time to think. It is impossible to identify and resolve a complex problem while putting out fires. Whether you’re sitting on a train or in your garden, uninterrupted time to reflect on the situation is vital.
  2. Mitigate the problem. Implementing a plan to flatten workload, improve efficiencies and address gaps must be a priority. The earlier resourcing problems are mitigated the better the outcome.
  3. Ask deeper questions. If the problem is ongoing and you are unable to address resourcing issues then review your business model. A business that requires more effort than it is able to fund is unsustainable.

 

Small Business

Small businesses are a special case as it is not unusual for all of the above to apply. It is common for successful small businesses to reach a size and plateau indefinitely. In general terms there are two options to address the situation, either learn the skills necessary and dedicate time to applying them or hire in someone to lead the company.

 

Time and again I have encountered leaders who have become lost in the detail. Some have recovered from it and others have ended up in new jobs. In every instance it has been damaging to both the individual and the organisation, and in every instance was avoidable.

If you only take 3 things from reading this:

  1. Make sure you regularly find time to step back and think about your business, then act.
  2. Prepare people for leadership before you promote them.
  3. Support new leaders, particularly early on.

 

Header image based on Place des Quinconces in Bordeaux, France by Olivier Aumage

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by mugley

by mugley

“He who fights with monsters should be careful lest he thereby become a monster. And if thou gaze long into an abyss, the abyss will also gaze into thee.”

Nietzsche, FW 2006, Beyond Good and Evil, Project Gutenberg Literary Archive Foundation.

SBS have just published an opinion piece of mine entitled “Comment: Tax haven ticket to uncharted territory“.

SBS have just published an opinion piece of mine entitled “Comment: Novated leases under the microscope“.

Who’s Next?

This change will reduce the take home pay of people like Nurses and Teachers while potentially costing many Australian jobs (on top of those already lost) including mine and those of my colleagues.

Please take a look at this website and get the facts before we go to the polls on the 7th of September.

Since the Federal Government announced changes to the treatment of Fringe Benefits Tax on motor vehicles there has been a significant amount of information, misinformation and commentary on the topic.

My intent in this article is to remove some of the rhetoric and sophistry around the announcement. I will not be discussing whether the original treatment was appropriate or should be continued; instead I will focus on the announcement and its impact in practical terms.

summary

In case you don’t have the patience / interest to read this entire article, the main points are as follows.

  1. Novated leasing is not a ‘rort’. It is a direct application of a 28 year old act of parliament which was supported by the Henry Tax review.
  2. The 20% statutory fraction rule which is being removed is a result of specific legislation by the current federal government.
  3. This change is being pushed as “good tax policy”. “Policy can not be good if it is implemented poorly. Surprising an entire industry by announcing it no longer exists ensures significant disruption to the economy and can not be good policy.
  4. Logbooks are not simple to use and in the real world people need to fill them out for 12 weeks every couple of years.
  5. The cost of implementing this new policy will mean that the full benefit is not going to be achieved.
  6. It seems unlikely that this policy is going to generate $1.8 billion and the government is declining to share how it reached that number.

(more…)

I have been working towards a return to updating this site regularly. I had intended to publish my almost complete ‘Sales Force Management’ article then move to discussing topics relating to various practical aspects of business management.

A recent announcement by the Australian Federal Government regarding changes to the treatment of Fringe Benefits Tax (FBT) on cars is a topic of specific interest to me. As the situation is progressing rapidly I’ve decided to finish my hiatus earlier than anticipated.

Enjoy, and if you have any questions or responses please feel free to use the comments section.

Shane