How better business leadership can save your fast-growing company from failing
Donald C. Geletko
Corporate Account Sales Strategist
Do business leadership skills affect the strength of a business? Yes, and the proof is in the numbers.
Several years ago, the Kauffman Foundation and Inc. magazine studied(opens in a new tab) the health of companies five to eight years after they appeared on Inc.’s 5,000-fastest-growing-companies list. The results revealed an underrecognized danger of rapid business growth: Two out of three of these fast-growing companies had shrunk, been sold at a disadvantage or gone out of business entirely.
Many found it unusual that two-thirds of these companies imploded, but these outcomes don’t surprise me. During my 10-plus years at The BB&T Leadership Institute, I’ve helped leaders of rapidly growing companies sustain their growth strategies and face the many obstacles these promising businesses encounter.
Typically, business leadership challenges fall into three categories:
- Challenges with growth strategy
Strategically, many companies are ill-prepared to deal with the consequences of their business growth. Sometimes business leaders are unable to identify the next stage of growth and execute accordingly. Other times, they have focused all their efforts on achieving one overarching business goal, such as winning a large contract or launching a new product. As a result, they can be ill-prepared for what to do after they accomplish that goal.
- Challenges with business leadership
When a company grows at a breathtaking pace, leaders sometimes want to maintain control of all things – large and small. This approach might have worked when the company was starting, but it’s a recipe for disaster with a rapidly growing business. A leader’s inability to relinquish control, delegate responsibility and empower others often seeds further problems. Tight control can lead to operational bottlenecks, inhibiting employees’ professional development and creating a working environment hampered with inefficient business processes and layers of frustration.
- Challenges with talent optimization
When a company goes from 0 to 60 mph overnight, talent optimization can be an acute problem. Talent optimization means having the right people with the right skills for the business’s needs. Leaders need to ensure their employees possess the right skillsets as the company evolves.
When a company’s growth skyrockets, it’s natural to promote from within. But the bookkeeper of a small enterprise who, as the company grows, is promoted to controller and then to CFO might not possess the business leadership skills required at that executive level.
Solutions for strengthening business leadership skills
Besting these and other growth-related challenges falls squarely on the shoulders of a company’s leaders. And the outcome of these challenges often depends on two interrelated factors: how-to-be competencies and what-to-do competencies.
- How-to-be competencies are personal. They concern how you, as a leader, act in the workplace. For instance, are you aware of your behavior? Do you know how you come across to others? Are you perceived as a positive, can-do leader or do you have a reputation for constantly browbeating subordinates?
- What-to-do competencies pertain to a business leader’s professional ability. For instance, do you know how to manage your time efficiently? Can you command an audience’s attention in a formal presentation? Do you have the ability to ask the right sales questions during a business lunch to guide a client to a decision that will close a deal?
How-to-be competencies help leaders achieve the what-to-do ones. In general, what-to-do competencies are easier for people to address. There’s a seemingly endless stream of search engine results on, for instance, “Five best tips for salespeople.” How-to-be competencies, on the other hand, concern a leader’s closely held beliefs and personal behavior, which means they’re usually messier and more difficult to change.
How-to-be competencies are instrumental to a company’s growth. If a leader lacks the personal skills to inspire a sales team and help them strengthen their competencies, it doesn’t matter that the company has a written business growth plan. A leader’s relentlessly boorish or critical behavior can demoralize even the best sales team and eventually lead to poor performance and constant employee turnover.
A fast-growing company that put business leadership training into action
I recently worked with a large publicly traded textile, apparel and luxury goods company. The company was achieving impressive business growth, but it was also experiencing growth-related problems.
The CEO intuitively knew the business growth was unsustainable because the quality of its products was suffering. Also, the company was missing multiple deadlines, and its leaders were being pulled in too many directions at the same time. It was a classic case of overload.
To help that company maintain its business growth, The BB&T Leadership Institute facilitated a two-day Team Optimization Process for many of the company’s executives. The senior executives participated in the Mastering Leadership Dynamics program and other key leaders completed similar coursework at The Leadership Institute. Thanks to these investments in their professional development, the company’s executives were able to create a common leadership language, improve their communication skills and be more agile as the company’s operations expanded and became more complex.
In addition to the three programs highlighted above, fast-growing businesses can benefit from attending other applicable BB&T Leadership Institute programs such as:
Executives can participate in these programs at our new state-of-the-art campus in Greensboro, North Carolina, or our consultants can travel to your company and implement the programs on site.
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