Connect with us

Leading

Leaders Who Make Good Decisions Do These 6 Things Constantly

Bad cultures are created by bad decisions by leaders who are not ready for the accountability leadership requires.

Published

on

business-leadership-advice

The ongoing workplace difficulties at Uber – accusations of discrimination against women, rebellion among its employees and drivers against what they feel is a complete lack of appreciation for them – seem to surprise no one who worked there.

Every story I read indicates that these issues (and others) had been issues for a long time at the company. Uber’s workforce had long been frustrated with their leaders and their inability or refusal to have their backs and listen to their concerns. But, when business is good and managing growth is the only objective, who cares if the culture is failing? Things are good now!

What’s the point of making bigger, long-term decisions to keep employees motivated and their teams inspired? Those that complain can leave – and easily be replaced.

This is exactly why Uber is looking for new leaders from the top down: It knows so many of its so-called leaders were not ready for leadership responsibilities and increased levels of accountability required in today’s workplaces. It focused only on managing growth in the marketplace, not making good, thoughtful and smart decisions about the the people who worked there – as if the two were not connected at all.

What is clear is even in hard-driving cultures like the one Uber created, people still want leaders that can help them grow professionally and that have the influence to advance their careers over time. These leaders know how to organically manage from within the corporate culture, maximise resources, motivate, inspire and – most importantly – make good, sound decisions, not bad ones that create chaos.

Related: 4 Leadership Lessons You Won’t Learn In Business School

Are your leaders making the right and good decisions and thus ready for their leadership roles? Are you?

Those that are adhere to the following six behavioral patterns:

1Knowing experience matters only so much

business-marketplace

The only thing certain about business today is uncertainty. Marketplaces shift and competitors emerge globally in much less time than ever before. As a result, what succeeded 25 years ago – or even five years ago – matters only so much.

A track record of prior success doesn’t mean that it will apply within any organisation, even the industry you work in. What matters most is mindset: Leaders who are adept at being inclusive in their leadership in the workplace make good decisions by constantly seeing and seizing new opportunities.

2Refusing to play politics

Leaders that play politics lose their leadership identities, because they are always trying to serve other people’s agendas and motives that don’t align with their beliefs. That leads to bad and inauthentic decision-making.

It is possible to serve your company’s and boss’s goals and objectives and not get addicted to corporate politics. Is this always possible? No. But, at the very least, leaders who are transparent about playing politics when necessary maintain trust from the employees who depend upon them.

3Having clarity of purpose

clear-purpose

What do you stand for? Do you even know what your core values are? Do they align with what your leaders and company expect from you? Then how can you know you are making the right decisions?

Clarity of purpose allows you to make decisions that are true and consistent with the mission at hand and align it you’re your own. Lacking this clarity erodes your ability to make decisions authentically.

4Knowing how to manage resources

Do you know the resources you have at your disposal – both the human and intellectual capital and the tools and resources that are available and/or need to be acquired to compete?

I’m constantly surprised at how few leaders actually know how deep their talent is and what they need to succeed and thus make bad and uniformed decisions leading to a mismanagement of those resources. People are your playbook for success for not just managing growth but reclaiming it.

Related: These 5 Styles Of Leadership Don’t Work. Do Any Of Them Describe You?

5Being able to see and seize opportunities

Seeing and seizing opportunities are the keys to reclaiming growth and require what I call circular vision or wide-angle thinking that makes leaders proficient at anticipating crisis and managing change before circumstances force their hand.

It broadens their observation and allows them to see around, beneath and beyond the obvious detail before them.

6Trusting themselves

Do you trust yourself enough as a leader to adapt to the cultural demographic shift taking place in America’s workplaces and marketplaces? Do you have the courage and wisdom to embrace diversity of thought?

The best leaders do and thus have the trust not only of their people but also trust themselves as they lead through uncertainty, even if they can’t know whether their decisions will lead to success.

Many great leaders begin to lose self-trust as they fail or face uncertainty and thus fail to do the other five things that lead to bad decisions. Don’t fall into this trap!

This article was originally posted here on Entrepreneur.com.

Glenn Llopis is the Chairman of the Glenn Llopis Group – a nationally recognized thought-leadership, human capital, and business strategy consulting firm. As a speaker, consultant, and executive coach to Fortune 500 companies and beyond, Glenn guides leaders and organizations to embrace a new type of thinking that helps them evolve and stay ahead of the rapid changes in the workplace and marketplace to drive growth. He is the best-selling author of the book Earning Serendipity and contributing writer to Forbes, Huffington Post, and Harvard Business Review. He has been recognized as a top 20 influential writer at Forbes and a top 100 leadership speaker and business thinker by Inc. magazine. His new book The Innovation Mentality (Entrepreneur Press) will release February 2017.

Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Leading

What’s Your Number? How To Unpack Company Valuations

Business is booming. Investors want in. But how do you put a price on the value of the company you have built with your own hands?

Louw Barnardt

Published

on

company-valuations

Company valuations is such a hazy part of the scale-up journey of a private company. Putting a price tag on a business is both art and science. At the end of the day, the number that makes the headlines (if ever disclosed) will be where willing buyer and willing seller meet.

But how do you , as business owner,  go about setting your asking price? Before approaching investors, it’s a good exercise to determine your own valuation range for the business. Choosing the right valuation method is the first big question. The answer has many parts to it, but the most important driver is the stage of the business.

Let’s look at some of the most commonly accepted valuation methods in our market:

Earnings Multiple

Applicable stage: Established, profitable companies

Listed companies, institutional players and private equity investors normally invest in a company for its cash flow profit that can contribute to their portfolio income. More often than not, companies will be valued based on their current earnings (bottom line profit after tax).

This method can only be used for companies that consistently make a profit. A multiplier will be chosen based on the company’s perceived risk. Younger, more risky businesses will likely have lower multipliers (as low as 3 and 4) and high growth, well established, lower risk companies will get higher multipliers (8-15).

Sometimes small adjustments are made to current year earnings (like non-standard, non-repeating income statement items) after which the valuation is set at Earnings times multiplier equals company valuation.

Related: 7 Factors That Influence Start-up Valuations

Discounted Cash Flow (DCF)

Applicable stage: Post-revenue start-ups, growth companies and established businesses

The most commonly used method in practice, the DCF method argues that a company’s value is determined by the future cash flows that it will yield to investors.

The starting point is creating a five to ten year cash flow forecast for the business. This is no small feat. In order to create a full financial model – income statement, balance sheet and cash flow statement – for the next decade requires a lot of work, both from a strategic and technical perspective.

Investors love this model because if forces the owners to put a clear strategy and expansion plan for their business into numbers. It will include dozens if not hundreds of assumptions – all of which can be scrutinised for reasonability. The result of financial model will be five to ten years’ worth of projected cash flows. These amounts are then discounted to present value at a discount rate that reflects the company’s risk and expected cost of capital.

The sum of the discounted future cash flows plus a terminal value (that represents the value after the five or ten year period of the model) then represents the valuation of the company after some final small adjustments for things like existing debt in the business.

Revenue Multiples

A revenue multiple valuation approach is focused on the market for similar businesses and is underpinned by your company’s current turnover. It seeks out the sales price of other similar companies in the country or worldwide, adjusted for size, stage and market differences.

A company that sold for R100 million at a turnover of R50 million would have a two times revenue multiple (valuation/revenue). If the average revenue multiple for similar companies is in a certain range, this multiple is then slightly adjusted and applied to your business.

If the average sale in your industry has been two times revenue but you are growing much faster than the average with a better competitive advantage, you can argue that two and a half times revenue is a more applicable number for your business. Revenue multiples are often used as a reasonability check in the market for the current asking price.

Related: Why Start-ups Like Uber Stumble When They Scale

Other methods

Most established companies are valued using one or a combination of more than one of the above three methods. At start-up stage, there are a number of other methods like Cost to Replicate or the Scorecard Method that early stage investors look to. When a company is simply in too early stage to practically value it, seed stage investors would also consider SAFE Agreements (Simple Agreement for Future Equity) – an instrument that determines that the percentage of the company the investors are buying with their investment. This is only determined when the Series A round is raised at a future date and under certain conditions, generally at a discount to the price the series A investors are paying.

Company valuations are complex. Many of the above technical factors play a role. A lot of it also comes down to the salesmanship of the owners and the negotiating capabilities of the parties. In ‘How Yoco Successfully Secured Capital And The Importance Of A Pitch’, the Yoco team speak about the importance of the right approach in their recent R248 million fundraising

Don’t go into this process without seeking some kind of expert advice. The price of the wrong valuation is simply too high. Make your numbers and your arguments bulletproof and you will be on your way to defending a strong and exciting valuation for your next raise!

Continue Reading

Leading

3 Keys To A Vision Others Can Own

Trying to get others to buy into a vision that is all about you getting more money is not going to excite people.

Zech Newman

Published

on

vision

I get really excited about my dreams. Over the years, as I have led my team, I have realised that they aren’t as excited about my dreams as I am. I own two restaurants and employ minimum wage employees. In the early years of owning my restaurants, turnover killed me. I used to fight for them to have the same passion for my goals and dreams as I had and as a result I had extremely high turnover. Confused and frustrated, I knew I needed to change the way I was leading a team.

A few little changes have created a committed team and extremely low turnover. If you don’t have a passionate, committed long-term team, check these simple vision casting strategies.

Deeper Vision

Often our vision that we cast is shallow and self-serving. A vision that is all about you getting more money is not going to excite people. Take some time to uncover what you are trying to accomplish. When you can cast a vision beyond your selfish desires, others can sink their teeth into the vision. For my company, I wanted to raise up leaders to change the community.

My focus changed to my crew and they could feel the shift in perspective, which also helped me to earn a bi-product of more money, my original desire.

Related: 30 Top Influential SA Business Leaders

Their Vision

Our deeper vision helps us keep and build a team, but it’s still our vision. We need to really understand the goals and dreams of our team to find untapped potential and loyalty. No one will ever care as much about our vision as us because it’s ours. The more focused you get about helping your team and their wants and desires, the more they will care about yours. In my restaurant I had a young lady who wanted to be a teacher. I thought about what it takes to be a great teacher and how I could help her toward that. Find out what they care about and dig deeper to see what is behind that desire.

Marry the Two

If you have a team running around caring only about their vision they may be loyal and passionate, however, they will not be united in one direction. Magic happens when we combine our vision and their vision. At the points of intersection, our interests and theirs are united to accomplish more. I want to encourage leaders who can change the community.

Related: Business Leadership – Learn How To Embrace Change

As for the employee I mentioned above who desired to be a teacher, I trained her toward being a better teacher so that she could raise up young leaders to change the community. Now she is one of my top supervisors and teaches many other crew members. She will be an awesome teacher someday, but in the meantime, she is a valuable team member.

Caring for a team and helping them see how your vision and their vision can help each other will change everything. Growing people is the business no matter what business we are in. Care for others and they will care for you. Care only for your own wants and you will never get the most out of your team. Find a deeper vision, figure out your teams’ vision, and combine the two and your business will transform.

This article was originally posted here on Entrepreneur.com.

Continue Reading

Leading

3 Signs You Are Your Own Worst Business Enemy

It’s hard to be objective about ourselves but if we really pay attention our colleagues will reflect how we are perceived and what it means for the business.

John Boitnott

Published

on

enemy

Sometimes, it’s hard to get out of your own way.

Entrepreneurs and business owners have to keep all the trains running on time, as well as figure out the next place they’d like those trains to go, metaphorically speaking. It’s a huge, complex job. So it shouldn’t be a surprise to realise that in many cases, the problem behind an underperforming company is the boss.

How do you know when it really is “just you,” though? We human beings have a notoriously difficult time being objective about our own behaviour and choices.

So, try looking for the following signs in the people and circumstances around you.

1. Your employees seem unusually tense or flat lately

Has the camaraderie vanished? Is the workplace one big collection of really bad moods, most of the time?

Of course, the boss’s mood can infect the entire office. As the leader of your team, you set the example and the atmosphere, and your employees follow your lead.

Getting along with others, both inside and outside your company, is imperative for success. If your employees and customers sense a negative change, then it’s worth examining your behaviour. These signs could be symptoms that you’re becoming a toxic boss.

To address this, first make sure you’re acting with integrity and in accordance with your personal values. Next, make an effort to demonstrate empathy with your employees. You don’t have to agree with every single point they make to do this. Respect their boundaries and try to see the issue from their perspective.

Finally, make sure you listen deeply. Employers who simply command and demand compliance find themselves stuck with the “toxic” label all too quickly. Instead, be curious about your employees’ perspectives and problems. Ask open-ended questions to get them to tell you more, and listen to what they say.

2. You feel deeply frustrated with your employees

employee

Are you feeling unusually impatient around new workers? Do you find yourself snapping at experienced workers over small annoyances or accidents?

If so, there could be some deeper issues at play.

Insisting on perfection, or even just on competence in an unreasonable amount of time can eventually sour your entire workforce and drive away valuable employees. You’ll have a hard time attracting and retaining talent if you create an awkward, uncomfortable or outright hostile environment.

Instead, try practicing a “talk-down” method on yourself. When you feel your impatience or annoyance growing, mentally talk yourself down from these emotions to a state of greater calm. Here are some questions to ask yourself:

  • On a scale of one to 100, how bad is this, really?
  • What’s the worst that can happen here, realistically speaking?
  • If that happened, how would we respond?
  • Is this more important than my relationship with my employees? Or my reputation?

In most cases, reflecting on these questions helps you keep small issues in check. You’ll also want to give some thought, however, to whether there’s a bigger issue just beneath the surface. Using smaller problems as a diversion from the bigger ones provides an effective distraction from tackling life’s larger challenges, but doesn’t do much to help us solve underlying issues.

3. Minor projects are infinitely refined and “perfected” but your company hasn’t come up with a strong new idea in ages

One of the most common ways entrepreneurs become their own worst enemies is by focusing too heavily on things that don’t deserve so much attention. For whatever reason – be it fear of failure, fear of success, or something else altogether – people fall into the habit of spending too much time perfecting existing projects when they should be thinking about what’s next.

Not giving yourself enough time to create and innovate is one of the biggest ways to become your own worst business enemy. Your primary job as the business owner is to create that overarching vision for your company, and then work with your team to figure out how to achieve that vision. If you’re not even allowing yourself the time to do so, you’re fighting an uphill battle without reinforcements. After all, no one else can really do this kind of work for you.

To combat this tendency, try keeping a log of your time for two weeks. Track your time in fifteen minute increments to help figure out where you’re spending the majority of your attention and energy. Then carve out uninterrupted “CEO time,” and schedule it as if it’s a firm appointment you cannot reschedule or miss. Give yourself at least three hours a week to work on new ideas for your company.

Takeaways

It’s hard to be objective about our own behaviour and surroundings. Instead, use your colleagues, employees, and environment as a mirror to reflect back to you the reality of how you are perceived and the ways that perception is impacting your business. Then take the appropriate action to mitigate those challenges.

This article was originally posted here on Entrepreneur.com.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending