The moment you sign the piece of paper to become a director of a company is the moment when a door suddenly opens to a new world and a plethora of duties and responsibilities. Anyone who has started a company has been through the process.
This quite likely applies to you. Did you understand what signing that document really meant at the time? Do you have a clear comprehension now of what it requires of you?
Do you know what it means to be a high-performance director? This applies to executive directors and shareholder-managers, as well as non-executive and independent directors.
It is a critical role that we are seldom well-prepared for and one that I am passionate about helping others master.
Why do private companies need boards?
Most business founders and shareholder-managers I have met are quite surprised when I talk about how critical a board is for a private company. ‘Surely that is just for large companies? Why would I need all that hassle if I am the sole or majority shareholder and managing director?’
The challenge is that governance and a board of directors are concepts that are poorly understood, yet they are the very things required to lead any private company from small to large, and from good to great.
What skills should a director have?
Being a director requires a specific skill set — a way of thinking and focusing on business growth that, unless specifically developed, will drop into management and operational thinking. If you are the executive director, unless you have a board to support you to lift this thinking, you may remain in management mode.
Being a director, and this applies specifically to non-executive directors, demands two primary qualities: The first is ‘commercial acumen’ or an ability to grow great businesses. When we assess directors for our private company client board appointments, this skill set is critical.
The second, and equally important quality, is emotional intelligence. It isn’t about how many degrees you have or how many listed company boards you have sat on.
It’s your ability to know your responsibilities, engage fellow directors as a team and deliver sustainable and ethical business growth for the company you serve.
What are a director’s duties?
The new Companies Act brought with it fundamental changes in how we think about directors’ responsibilities. Signing that piece of paper immediately bestows upon us fiduciary duties of care, skill and diligence.
Even if we are not formally a director, if our role has significant enough decision-making powers in the company, we may be deemed to be a director, known as a ‘prescribed officer’.
Directors can now no longer hide behind the ‘I did not know about it’ excuse when decisions or business outcomes go awry.
As a director, you have a set of responsibilities that you should know or have gone to reasonable lengths to know. When you make decisions within the company, there are specific processes you are expected to follow to ensure that good decisions are made, solvency is maintained and stakeholder interests are cared for.
Conflicts of interest must be declared and you must be beyond reproach in putting the business first before all other interests, every time.
Yet how many directors have invested in the study and application required to fulfil these responsibilities? Signing that piece of paper is easy. What happens next is another story.
You may be a highly successful founding shareholder-manager or executive director with an outstanding track record of growing ‘your’ company. Yet it might not be enough. When we look through the lens of directors’ duties, will we see fiduciary compliance, stakeholder inclusion and legal principles in play?
Albert Einstein: An Influencer To This Day
Say the word genius and immediately Albert Einstein springs to mind. To this day his influence remains across not only science, humanity and education but popular culture too.
Albert Einstein had the same mentality as an entrepreneur; he was a discoverer, an educator, a revolutionary and incredibly creative. Below are some of the few more reasons why entrepreneurs can learn from him:
1. Even geniuses get it wrong
Einstein wasn’t always right. The best example of Einstein getting it wrong, was when he had trouble accepting that the universe is based on probabilities, not absolutes. In a famous Einstein/Bohr debate, Einstein stated, “God does not play dice with the universe,” with Bohr retorting:
“Einstein, stop telling God what to do!”
2. One should read
When you find the right book, at the right time, it can have an incredible impact on your mindset. I have learned so much from books, and many have helped me as an entrepreneur. Not only does reading give you quiet time and space to look after yourself, but it’s also exciting to keep discovering incredible insights, and being surprised by their impact.
Now I don’t think I will ever dream up a concept that will have world-changing implications like Einstein did, but reading can open new doors for you and your mind, and take you places you never thought possible.
3. Enjoy the challenge
Einstein didn’t pluck remarkable theories out of thin air. He made many mistakes, he persisted and proved his theories worked.
Einstein would ask challenging questions and ask them in different ways. By doing this, he was able to address the unknown from different angles and eventually unveil some of the most perplexing universal secrets.
4. Your weaknesses are your strengths
Experts such have hypothesised that Einstein might have suffered from Asperger’s Syndrome; a condition where sufferers are described as socially aloof, emotionally detached and exhibit inappropriate social behaviour. But on the flip side, those with Asperger’s Syndrome can display an obsessive interest in a single topic or object. So, while Einstein wasn’t the best at socialising, he relished solitude and made incredible use of his mind.
By embracing his playfulness, curiosity and laser-like focus, Einstein decoded the universe. Not so much of a weakness when you think of it like that, hey?
5. Find your tribe
His professors often criticised Einstein’s ideas; professors who were accustomed to conformity. It was only when Einstein worked as a clerk at the patent office that he made significant strides in his thinking within physics, mathematics and philosophy. The point being, make sure you surround yourself with people who get your creative juices flowing and fuel rather than deplete you.
Your Narcissism Is Killing Your Employees’ Productivity. How To Avoid The Pitfalls
The key is to understand how your narcissism is affecting others and actively work to adjust and adapt your behaviour.
Narcissism appears to be on the rise among today’s business and entrepreneurial leaders, if you read the business pages and academic research on a regular basis. And this isn’t always a bad thing: Narcissists can be compelling leaders capable of executing grand strategic visions.
But all too often they are described as highly self-absorbed individuals who believe they are superior to those around them.
And while successful entrepreneurs tend to have high levels of self-confidence and an intense drive for success, often they’ll fall prey to the problems associated with the darker aspects of narcissism: Specifically, they take unnecessary risks, hold too tightly to their vision when change is needed and fail to recognise the work and sacrifices of those around them.
In our new study, which was published in May in Organizational Behavior and Human Decision Processes, my research partners and I sought to gain a better understanding of just how problematic narcissistic leaders are, and what they might do to lessen the negative outcomes. We surveyed 262 employees and their (262) direct supervising managers over a four-week period at a large Chinese technology company.
Overall, we found the harmful consequences of narcissistic leaders to be wide-ranging.
Just how harmful is a harmful narcissistic leader?
We began by asking leaders at the tech company we targeted to complete a widely used Narcissistic Personality Inventory test. Employees, meanwhile, were asked to report on their organisation-based self-esteem, meaning the degree to which they felt they belonged in their organisation.
As researchers we were operating on the understanding that the need to belong is a fundamental human need and motivator, but that narcissistic leaders fail to satisfy this need among their employees because of their high levels of self-concern.
Those high levels mean leaders like these ignore the feelings of others. Former Yahoo CEO Marissa Mayer, for example, was often described as highly self-absorbed and inconsiderate of others. She was often criticised for being habitually late to meetings and dismissive of her constituents’ ideas and suggestions.
Elon Musk, CEO of Tesla Motors and SpaceX, is also said to be highly abrasive, and to tend to berate employees who fail to live up to his impossibly high standards. One former engineer at the company referred to critical interactions with the SpaceX CEO as an “Elon ass-kicking” and said some employees felt “crushed under the weight” of those interactions. Not surprisingly, both Musk and Mayer have been recognised as some of the most narcissistic CEOs in the tech industry.
Our study found that 51 percent of employees with narcissistic leaders disagreed or strongly disagreed with statements asking if they felt valuable in the workplace. Moreover, this diminished sense of belonging had wide-ranging consequences on these employees’ behaviour. Specifically:
- 34 percent of employees surveyed disagreed or strongly disagreed with statements asking if they helped other group members with their responsibilities
- 31 percent of employees disagreed or strongly disagreed with statements asking if they spoke up to their leader about their own improvement-oriented suggestions
- 37 percent of employees agreed or strongly agreed with statements asking if they badmouthed their leader to their coworkers
- 18 percent of employees agreed or strongly agreed with statements asking if they intentionally tried to disrupt task completion by ignoring their leader’s requests.
Such behaviours are troublesome enough for established companies, but for start-ups – whose survival depends on quick action and cooperation from all employees – the consequences can be dire.
How can narcissistic leaders avoid the pitfalls of their personalities?
We asked employees to report whether their leader consulted with them before making decisions. While this kind of consultation is an influence tactic leaders use to gain employee support, it can also signal to employees that their contributions are valued.
We found that among narcissistic leaders, 27 percent frequently consulted with employees while another 43 percent consulted with employees to some extent.
Importantly, we found that when narcissistic leaders consulted with employees, the detrimental outcomes stemming from such leadership were not simply reduced, but eliminated completely. Here are three takeaways:
Active listening means that you concentrate on the message being communicated; you don’t just passively “receive” the message. Unfortunately, most narcissistic leaders have difficulty focusing on what others are saying and often ignore their advice.
One classic example of a narcissistic leader who altered his behavior to more attentively listen to others was Steve Jobs. Much of Jobs’ success upon returning to the helm at Apple in 1997 was attributed to the drastic change in his interpersonal behavior from his prior tenure in 1985.
Not only was he more willing to listen to his employees, but he was described as someone who “seemed to relish other people’s ideas.” Our research indicated that employees are likely to discount their narcissistic leaders’ more abrasive qualities when those leaders take the time to actively listen to their suggestions.
Don’t just listen. Invite employees’ involvement in the making and development of decisions. Our study demonstrated that when narcissistic leaders invite employees to participate in leadership processes, those employees experience a sense of ownership in the process that can help alleviate the leader’s more harmful tendencies.
In particular, such behaviour signals to employees that their narcissistic leader is not only willing to listen when they, the employees, have concerns or suggestions, but actually desire to receive those employee contributions.
According to Jack Welch, former CEO of General Electric, the best leaders “make a religion out of being accessible.” Likewise, our research emphasised the importance of narcissistic leaders making themselves accessible to individual employees.
Despite his narcissism, Welch often sent personal notes to his executives and met one-on-one with employees at all levels. Such behaviours were part of the programs Welch instituted to enhance employees’ “feelings of ownership and self-worth” in the GE culture. We found that the individual attention employees receive when they’re consulted provides the interpersonal interaction they crave, but rarely receive, from their narcissistic leader.
Due to the dynamic environment of the typical entrepreneurial venture, communication and cooperation from employees is a necessity for continued growth and survival. Although entrepreneurial leaders may be more narcissistic than their counterparts in non-entrepreneurial vocations, the pitfalls associated with their tendencies may be avoidable.
The key is for such leaders to understand how their narcissism is affecting others and actively work to adjust and adapt their behavioir.
This article was originally posted here on Entrepreneur.com.
How Can Scholars Prepare Themselves For The World Of Work?
Make A Difference – Young Leader’s Launchpad.
The narrative that we have expanded on over the past few weeks has highlighted the importance of considering the fundamental principles of entrepreneurship and not the general definition of just “starting a business.” Furthermore, we have emphasised that South Africa is fortunate to have a diverse range of perspectives and skill sets that we can use to benefit society, and allow the youth of this country to take a leadership position despite their age, circumstances or financial means. Through the various topics that have been discussed, we have hoped to expand on your knowledge through a range of insights, perspectives, and lessons learned. Which leads us to the topic of what it takes, as a scholar, to prepare yourself for the world of work.
Make A Difference Leadership Foundation (MAD Leadership Foundation), in partnership with their fellows, have launched a diverse initiative which aims to prepare our scholars for the world of work in the general sense. We will expand on some of these learnings below, highlighting the four key lessons we feel are most applicable.
Work Becomes Our World – Lessons Learnt
Lesson one – Create a Community of Support
When entering the working world, it is easy to get caught up in the pressure of your nine to five position. This may mean that you leave your dreams behind and focus all of your attention on the role you have within the company you are working for. Creating a supportive space, with your peers, where you can discuss your dreams and/or goals which are not directly linked to your workspace will continue enforcing a sense of achievement in your private life without neglecting your work. In creating a community of support, it will allow you to explore your “dreams” in a way that will make them feel more achievable and obtainable.
To encourage this concept of a supportive community the MAD Leadership Foundation fellows have implemented a concept called Dream Enabler. This initiative aims to select a “dream” or initiative that the MAD Leadership Foundation scholars would like to pursue. We review these dreams and find ways to convert them into actions for the next year. The initiatives chosen are presented back to the alumni forum and implemented in the year after each Annual Leadership Summit.
A little collaboration will go a long way in giving each dream that little something extra.
Lesson two – Bring Focus to Different Aspects of the World of Work
The working world can be subdivided into three broad sectors which include those who enter the workforce, those who start their own businesses and those involved in the creative arts or cultural sectors. You can focus on these different sectors by creating two main archetypes, letting your goals fall into two broad categories:
- The Career Driven Professional
- The Independent Creator
By highlighting the importance of both archetypes, we can develop into well-rounded individuals. For example, an actuary in the corporate field may grow by focusing equally on his/her career as a “career-driven professional.” Once qualified, he/she may benefit by attending workshops aimed at the “independent creator” archetype. It is essential for scholars who are soon to be entering the working world to allow themselves the flexibility of focusing their attention on both archetypes and to strategically plan their time given to each respective archetype.
Lesson three – Learn to Face Failure
Many individuals are funneled into a particular career path and then experience challenges that they would have never thought of. That being said, every challenge brings an opportunity, and every failure has a learning curve. The compilation of these challenges and failures will form our world of work. It is important to consider these failures as an integral part of your journey through the working world. If you are not failing are you genuinely pushing yourself? The MAD Leadership Foundation alumni have learned that vulnerability is a strength and that you will show the most growth by failing and trying again.
Lesson four – Fail in a Safe Space
Highlighting failure as an integral part of your journey to success doesn’t mean that you should throw yourself into unplanned, risky ventures. This just means that when you are entering unknown territory, you are bound to encounter some failure. This is a testimony to you having the wherewithal to push yourself. However, there are some areas you can explore further, and find out more information on, with your community of support, to allow your journey to run a little smoother. Areas to consider further:
- Financial and Time Management
- Building and Maintaining Your Personal Brand
- Influencing Others
- Knowing Your Value and Making Your Environment Work for You.
MAD Leadership Foundation has created a safe space for their scholars, through the creation of a simulated gaming and learning experience. Where scholars can explore the concept of failure by addressing potential hurdles in their day to day lives, and how these would impact them personally, professionally and otherwise. Together as a cohort, they can address these hurdles and how they would overcome them, with the support of the experienced alumni. This helps to ensure that we are prepared and aware of some common pitfalls that one may encounter when leaving university.
Earning money and supporting yourself is tough and many experience difficulties in getting up after each failure. For this reason, it is important to create a culture of “failing forward” in that you need to learn from your challenges and continue on a path to your dreams and successes.
Bringing It Together
These core lessons will allow you to have the foresight to plan and prepare for the world of work. Many might be known or assumed, but until you delve into each lesson, you might not be as ready for this journey as you might think.
We aim to prepare our scholars as best as we can with the knowledge, ability, and power to enter the working work as prepared as possible. Many youths, however, do not have the structure that MAD Leadership Foundation offers, and we, therefore, encourage you to be that support structure to each other. Lean on your peers and share insights through shared learning and support, through this the youth of South Africa can be assured of their readiness for the world of work.
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