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5 Leadership Questions Every Boss Should Ask

Your employees need you most when times are tough. Know how to talk to them – whether the news is good or bad.

Entrepreneur

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The downturn has brought about many woes, especially in the corporate sector. Balance sheets are in distress, stocks are down, layoffs are up, revenues are off, and employees are extremely worried; so are employers. The shockwave that’s been hitting the world economy demands that entrepreneurs react, and react differently than they have in the past. Unfortunately, the pathways toward effective action aren’t always clear. There’s no single set of rules to follow during turbulent times that says, “This is the best way to go.”
 
Nevertheless, there are some especially useful guidelines to consider during times of crisis that can be helpful to entrepreneurs interested in riding the negative wave and holding out for better times. Entrepreneurs, like other leaders, often ask similar questions about how to manage in a downturn. Following are five examples of such typical questions, and the answers to them:

Question 1

How should I manage and lead differently in light of the economy?

The best response is to communicate, communicate, communicate. Your employees need to hear from you, the person at the top. Lack of communication leads to a rampant rumour mill that most often has harmful effects. Even the best of leaders’ intentions can be misconstrued and twisted in the absence of direct communication. The leader must provide regularly scheduled updates on issues such as sales, services, revenues, losses, projections, near- and long-term projects and status.
 
That said, this message must be clear, upbeat and to the point. Employees, just like stockholders and trustees, dislike having to sift through corporate bluffing and unnecessary details to get to the “meat” of the message. Above all, the message must be honest, even when it’s negative. The entrepreneur must not underestimate the level of understanding of the recipients of the message. No one likes to be spoken down to, and above all, no one likes to be lied to. If the leader tries to sugarcoat the message or minimise the impact of a situation, it’ll soon become apparent to the audience. And when it does, they’ll be angry; in fact, angrier than if they’d received a direct, yet negative message to begin with.
 
Furthermore, if the leader minimises the negativity or is dishonest, his credibility will be injured, perhaps irrevocably. The leader must be constantly sensitive to employee morale and motivation. Realistically, sad economic news delivered in a depressing way leads to downbeat employees, which in turn leads to decreased motivation. It becomes a domino effect: Decreased motivation leads to decreased productivity, which leads to decreased output and revenue, which leads to possible employee termination for non-performance. Morale may plummet; however, if the leader is honest and clear, and frames the message in realistically optimistic terms, morale doesn’t necessarily decline in the face of negative news. The key is to be a level-headed, rational, understanding and positive leader.

Question 2

How often should I communicate the status of the company to employees?

This depends on the type and size of the company, the industry and the degree of impact the harsh economic situation is having on the organisation. The general rule is to communicate often enough to keep the employees up to speed, yet not so much that they overreact to the daily or weekly fluctuations of the marketplace. This is true unless the very survival of the company is directly tied to the frequent changes in the marketplace, in which case updates need to be made more often. Therefore, on average, monthly status updates are appropriate.
 

Question 3

Should I allow my employees to participate in these information sessions?

Yes. Employees want and need to be heard. Many leaders are reluctant to open up the floor to their employees because they fear losing control. This usually only occurs when motivation is down and anger is high – two factors that can be minimised with frequent and honest feedback. Many organisations hold town hall meetings to create open communication between employers and employees. This helps both parties hear and understand each other’s viewpoints, questions, frustrations and worries. If a meeting is held where only the boss speaks, the employees are prevented from airing their questions, fears and concerns – data the boss needs to understand in order to be an effective leader. The leader can clarify misconceptions and avoid disastrous rumours by allowing an open flow and exchange of information.
 

Question 4

Should I give my employees a heads up about layoffs, work furloughs, etc?

Because this category of information is usually depressing, productivity and morale are certain to decline once it’s delivered. In brief, no work gets done because the people are in shock and feel betrayed or confused. The best time to convey the bad news is right before it’s scheduled to occur. Therefore, if a noon layoff is set, employees should be told, individually or in teams, shortly before then. The leader should allow time for questions and expression of fears and concerns – and yes, be prepared to be yelled at or even threatened. All of these are realistic and common reactions to receiving bad news about one’s employment future.
 

Question 5

How should I communicate bad news?

No one likes to get bad news, especially when it applies to one’s livelihood. Layoffs are difficult to accept, but there’s a communication format that can lessen the pain. The message needs to be clear and concise. “Beating around the bush” isn’t acceptable; neither is a very brief, dramatic statement like “You’re fired.” The leader needs to use a three-part sequence to deliver the message. First, say something positive, like “You’ve been a valuable member of our team for some time. I want you to know that I appreciate your contribution.” This statement contains negativity, but it can be softened and better accepted if the message begins with a positive statement and the communicator expresses concern for the other party. Next, continue with the bad news. Tell them you have to cut your losses and terminate some people or cut back on certain projects. Pause and wait for your words to “sink in.” Third, state what you’ll do to help out those being terminated. Say you’re setting up stations to show employees how to develop their resumés, search for new jobs, etc. If you don’t intend to do this, ask them to finish up what they’re doing, gather their things, say their goodbyes and leave the building by a certain time.
 
The most important thing to take away from this column is that there’s a framework to use when openly and honestly delivering news, even when that news is bad. The leader’s credibility and honesty is at stake at every juncture here. As a result, the entrepreneur needs to invite feedback and express concern for the well-being of the employees.

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Leading

What A Grade 1 Sticker Business Taught Me About Business

It’s the very fundamentals that are frequently overlooked amid ambition and “blue sky thinking” – yet, these remain the most crucial element of any business.

Grant Field

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When I was a kid, my father believed that instead of getting pocket money, my brothers and I should learn how to make money. Stickers were the school craze when I was in Grade 1, and we wanted a collection for ourselves, so Dad said if we wanted to buy the stickers, we needed to make the money. So, logically, we started a sticker trading business. Dad gave us the start-up money and took us through the basics of business.

We had a cash float for purchases, and learnt about cost price, mark-up and selling price – very basic accounting. We kept recycling that money, making extra and using it to buy more stickers. Then we worked out that if we increased the mark-up, we’d make a bigger profit – so why not make the mark-up as big as possible? The obvious happened. Our prices were too high, and we lost customers.

Valuable business lesson learnt, we came back down to a mark-up that other kids were willing to pay for.

More lessons to learn

Then people came to us and asked if they could take a sticker today and pay us tomorrow. We saw no reason not to trust them. Guess what? They didn’t pay us back. We had bad debt on our hands. When we sold out of stickers, we had cash-flow issues and couldn’t buy more stock. Dad was there to help us out, though, so we received another capital injection to get back off the ground. And this time, if we did extend credit, we loaded it for the privilege of “buy now, pay later” – another lesson learnt.

We ran a proper ledger for the business, tracking our inventory, sales and profit. Even if our “bank” account was a piggy bank, we had a clear record of what was going on. When I look back on it, none of what I learnt was irrelevant.

Today, I run a leading financial services company with billions of rand running through our bank accounts. Even though the finances of the business are run on a much larger scale, the principles of business – those basic principles that we learnt trading stickers – still power our company. And when I see entrepreneurial ventures failing, or when friends come to me for advice because their business is struggling, it’s almost always because they haven’t got these basics right.

Related: Successful SA Entreps Share Their Most Valuable Business Advice Ever Received

Clarity

One of the most important lessons I’ve learnt is that if you don’t fully understand how the money is being made, walk away. Whether you are dealing with stickers or financial services, the business principles should be straightforward: money coming in, money going out, and profitability.

Every day, I look at an Excel statement of my company’s forty bank accounts. Every day, I look at the cashflow, and unusual big-ticket items get a note so I know what’s going on. It’s just like that Grade 1 business, only on a bigger scale.

Entrepreneur, thwarted

Once the other kids saw the success of our sticker business, they started to want to get in on the action, so they came to market with their own competing products. At first, we were able to innovate as the competition squeezed our margins and started to impact on our profits. Eventually, the whole situation got completely out of hand and the school banned sticker trading for profit.

While I didn’t become a sticker magnate, the lessons I learnt in Grade 1 remain central to every business I am involved with – get the basics right.

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Leading

How To Handle A Director Who Always Says No

Diverse opinions on a board is a good thing — but is it boosting your business, or hindering growth and decisions?

Carl Bates

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Do you have that director on your board who always says ‘no’? Regardless of what the issue is, regardless of the context, who raises it or whether or not it is indeed a good idea, their response is either a simple ‘no’ or an elongated perspective on why they disagree? It can even feel at times that they are actively working against the company and against the board. Although they obviously do not see it that way.

Experienced directors will have multiple war stories related to this subject. Aspiring directors should be aware of how to approach these situations when they arise and how to avoid becoming the subject of such stories.

Develop a culture of trust, candour and professionalism

A board’s conduct must be characterised by trust, respect, candour, professionalism, accountability, diligence and commitment. It is the board’s collective responsibility to build this culture and to engage with one another in a productive and effective way.

Dissent should be welcomed when it is constructive and engaging. The idea of being the ‘devil’s advocate’ for the sake of it however, is not the best way to approach this. Dissent should be based on a real belief that the issue has not been fully debated or creates a real challenge for the company going forward.

If you have a director who genuinely believes a different path is right for the company, hear them out and engage in the discussion. In my experience, this often opens up an issue or changes a detail that when taken as part of the whole, improves the decision-making outcome for the board and the company.

Related: Contributing In The Boardroom

Remove the politics from the boardroom

At the heart of this issue is often politics. Politics between directors, who are also shareholders or executives. Politics between the ‘new guard’ and the ‘old.’ Regardless of the genesis, politics really do not have a place in the boardroom and directors who engage in it should be called out by the chairman or another senior director.

In local government I have heard stories of councillors who always vote ‘no,’ so that whenever something goes wrong, they can say “I told you so,” and show the public why they should be re-elected. But that is indeed politics. The boardroom is a very different space. It is private and discussions should be confidential.

Board rotation, a simple solution

While the removal of an errant director should never just be left to resolve itself, there is a simple solution that can support the easy removal of the most difficult directors. The challenge is that it requires forward planning prior to the appointment of any new director.

Directors should only ever be appointed for a predefined term, with automatic rotation at the end of that term. This does not stop you from reappointing a director for a further period. It is, however, always easier to ask someone to consider a further term than it is to tell them that their time has come and they should resign from the board.

Having a predefined term for a director essentially ensures an automatic resignation period. A simple rotation policy for directors is not just good governance, it is a practical step you can take to provide a way out of a sticky relationship.

Ultimately the board as a whole must address issues that detract from the board fulfilling its function as and when they arise. A rotation policy might provide an effective backstop. A high-performance board is one that will tackle the issue head-on.

Read next: How Diversity Drives Board Performance

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Leading

The Power Pose: Using Body Language To Lead

Use the way you move and stand and interact with others to become a better entrepreneur and leader.

Howard Feldman

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In 2012, the power pose became a global sensation. A Ted Talk by Amy Cuddy hit a staggering 46 million views and became the second most popular Ted Talk in history. The premise was simple – hold a powerful pose and it will not only affect the way you behave but it will even change your body chemistry. Since the talk, the power pose has met with heavy criticism and been labelled as nothing more than pseudoscience. Fortunately for believers, they were proven right. Amy Cuddy released further research this year and it fundamentally proves that this bold stance works exactly how she said it did back in 2012.

The power pose isn’t something that you’d adopt in a meeting or around the office but the science behind it shows how important it is to pay attention to your body language as it can fundamentally change how you are perceived.

Notice how you are noticed

People spend a lot of time reading one another’s body language and the way a person stands or holds their hands or moves can influence how others see them. It’s very natural to judge someone else’s posture, but what about the way they are judging yours? Few people look at how their body language is affecting the way people engage with them.

Related: [Quiz] How Good Are You At Reading Others In Business?

So, what are you supposed to do?

Fake it until you make it

Want to know how can you adapt to become a better leader? You can fake it.

The power pose isn’t the only way to change your mood. Research has shown that whether you laugh naturally or put on a smile and make yourself laugh, your body still releases the same levels of serotonin.

Whether you are really laughing or just pretending to laugh doesn’t matter – they both have the same impact on your demeanour.

Change how others see you

Think about the pose that every athlete adopts when they win a race or achieve something that’s been physically taxing. They hold their hands outstretched in the air. Even blind athletes hold the same pose. It’s big, it’s bold and it’s a physical manifestation of success.

Now consider the defensive pose. The tight hunched shoulders or inward curve of the spine. These poses immediately make a person look nervous, afraid and lacking in confidence. Like the porcupine curling in on itself for protection.

The same ideas apply to daily business life. While the power pose and the athlete pose are not necessarily a team activity, ensuring that you hold your body upright and with confidence means that you’re conveying an attitude of strength. You come across as confident and capable and positive. You are ready to take on anything and overcome the odds.

By contrast, if you are hunched and withdrawn, you come across as nervous and lacking in confidence and these are not the qualities you want associated with you as an entrepreneur and a leader.

Related: (Slideshow) 5 TED Talks That May Change Your Perspective on Life

Body language for entrepreneurs

  • Shake hands like a hero. The way you shake hands with someone is very significant in terms of establishing equality. Be even, be firm but don’t pull people towards you or turn their hands under your own. This makes them feel like you are trying to establish dominance.
  • Create an atmosphere of openness. Maintain eye contact, say hello to people with warmth while holding a strong posture. A warm and open greeting is essential to establishing trust.
  • Do the power pose for two minutes before any meeting or interview. This will get those chemicals stirring and make you feel confident and in charge.

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