Understanding how to lead other people in any organizational setting doesn’t depend on whether you are a natural leader.
It depends on how well you understand your people, your business processes and the resources you have available. In my business and as a SCORE volunteer, I always tell my clients the key to understanding whether they’re leading well relates to how well they feel they are fulfilling the definition of the word. There are many definitions of leadership. This one is mine.
Leadership- Influencing others to focus their efforts on accomplishing the organizational mission, and continuous improvement, by providing purpose, direction and the appropriate stimuli for motivation.
Here are other important terms for all leaders:
Mission: A mission is a purpose - the reason for the existence of a business. Anyone who starts or joins a business does so with the expectation of realizing a net-positive result value. As an entrepreneur starting up a new business, you must take the time to understand how you will realize your vision and what net-positive value you expect in terms of both material value and intrinsic value before you can even think about writing a mission statement.
Why is this important? Because starting a business is about starting a journey to somewhere. Every journey begins with a first step. If the first step is not directed in the right direction, then you will be immediately consuming time, effort and resources without getting closer. These are three things that a typical start-up cannot afford to waste. From a leadership perspective, it is one thing to waste time, effort and resources as a single person, but as a leader and owner of a business, the waste multiplies with each employee whose efforts you influence.
Vision: The first, and last, consideration is your vision. What does your business look like? What product or service will you provide? How will you provide it? What advantage will you leverage? Developing your vision is not a one-stop event. As you think through how you will realize your vision, you will make assumptions which may prove unrealistic. As assumptions change, your vision also changes and it is critical to think about how your mission will be affected.
Net-Positive Intrinsic Value Creation: What intrinsic values are represented by your vision? The inspiration from which your business idea springs is an important aspect of your mission. Ensuring the values behind your business are clearly identified is critical for recruiting and selecting potential partners and employees. If the people who work for you do not value the aspects of your business that are critical for its success, then you can expect their attitudes and efforts to reflect the misalignment.
Net-Positive Material Value Creation: No business can continue to operate if it cannot generate enough revenue to cover operational expenses. The leadership definition provided earlier implies there is a purpose to leadership: getting others to do things that will contribute to the mission of your business. The definition also implies a responsibility: giving people clear direction on how to do things and providing the appropriate incentives to do them properly. Half of this responsibility has been addressed in the previous discussion on intrinsic values. The direction aspect involves training, measurement, evaluation and continuous improvement. It is critical to take the time to understanding how you intend to operate your business before you ask others to help you. Training, measurement and evaluation must be based on your process and the risks you must optimize in order to be profitable.
In developing a mission statement, there are four core-principles, based on common intrinsic values.
These principles represent the different types of risk inherent to every decision, process design, operation and continuous improvement effort you and your employees will make:
Internal Safety & Security- A business must provide employees with a work environment free of conditions which could result in unacceptable individual or collective injury, sickness, degradation of morale or personal physical security.
External Safety & Security- An organization must provide the client, customer, and/or consumer with a product/service free of hazards which could result in unacceptable individual or collective injury, sickness or degradation of morale, personal physical or financial security. The methods of procurement, production or delivery of products/services must not adversely affect environmental conditions.
Quality- An organization must provide customers with the products and services they want, in the quantities they want, when they ask for them.
Efficiency- It is critical to the success of the business to create the greatest value for its customers at the lowest possible cost.
The mission statement is the foundation for everything that happens within your business. Your mission must represent, as succinctly as possible, the vision and values that inspired you to start the business and the purpose you and your employees will work toward. As a leader you must recognize that decisions, actions and efforts will either contribute to your mission, or they will create waste. Understanding and clearly communicating your business’ mission is the first step to leading your employees successfully. Leadership is practical.