CHAPTER 2

Mindset on Leadership

Leadership—Involves Setting Clear Directives, Providing Oversight, Developing Talent, and Guiding the Activities of Others toward a Common Objective

There are some stark differences between how an entrepreneur and an employee think. One of those differences is on the matter of leading versus following. A follower awaits instructions. A leader takes initiative. A follower relies on the guidance of his/her superiors. A leader is guided by the vision and objectives set for the company. Followers depend on others to get opportunities. Leaders create opportunities for others. A follower doesn’t mind being in a supportive role and is just fine to not “call the shots.” A leader is effective when making decisions on behalf of others. It takes a guiding set of beliefs to shape the thinking of a leader.

An entrepreneur is a leader who wears many hats. He/she is at the helm of a company, leads a specific group of people, performs autonomous tasks, and provides direction, guidance, and delegation. It is impossible to be an entrepreneur without being a leader. As such, a great entrepreneur must think like a leader in order to be successful.

There are different types of entrepreneurs. There are solopreneurs, serial entrepreneurs, franchise owners, online marketers, freelancers, business moguls, and conglomerate visionaries to name a few. Regardless of the numerous types of entrepreneurs, all of them share virtually the same characteristics. Here are 10 foundational characteristics of a leader:

Has Followers

Without followers to influence, there is no leader. As an entrepreneur, the measure of your impact is demonstrated by how well you compel people to buy from your company, how you shape others’ thinking, how you inspire others to be their best selves, or even by how you draw others (employees, stakeholders, loyal customers, partners, etc.) to join you in advancing your vision in some capacity. People follow a leader who has a captivating vision and can convince them that they need what he/she is offering. You don’t have to be a social media sensation or even have a massive public following to be a leader, all you need is some followers to influence in some way.

You have responsibilities to your followers. For your customers, you are responsible for delivering on your promise to provide the product or service to their satisfaction. For your employees or staff, it is your job to ensure that they are given a clear vision of where the company is going, its core values, the expectations of their jobs, an environment that allows them to carry out these expectations, and any other promised benefits. If you have investors or shareholders, you will have to honor your commitments to them as well. This is what leaders do.

Gives Instructions

Your staff are also followers who have joined forces with you to help your vision come to pass. It is important for entrepreneurs to provide the necessary leadership and clear instructions for what is needed from your followers to help you fulfill your vision and to reach the goals and objectives that you set. Once you have hired the right staff to accomplish certain tasks, you are then responsible for ensuring that they understand exactly what is expected of them. Until you scale large enough to hand over some of the reigns to other capable people, you will have to take on most of these duties. Entrepreneurs are leading the charge and must set the course by giving directions.

Have you ever been assigned a task with no instructions? It’s like trying to assemble furniture with no guide. Imagine the frustration of having the responsibility to do something but no one has made it clear to you how to do it. If you leave room for those who are under your leadership to just figure things out on their own, you are liable for any disastrous outcomes, not them. It also wastes time, increases the chance of mistakes, and reduces efficiency when the team has to attempt to teach themselves.

Develops the Talents of Staff

It is vital to properly train and develop the talent within your company so that you can begin to transition certain responsibilities into capable hands as you scale your organization. Hiring a trainer will be necessary as the business expands, but the business owner must still be involved in conveying the brand message and culture to the trainer to create consistency throughout the organization. The successful entrepreneur will approach leadership from the perspective of empowering those who follow to excel in their roles. Therefore, leaders must be very secure in themselves to recognize when an employee has knowledge or a skill set that exceeds his/her own. A leader cannot be excellent in everything, and so it is wise to hire those who are more competent than you are in some areas. Hiring those who are highly skilled is for the betterment of the company as a whole. There is no room for ego as a leader.

If you develop the skill set of your staff, you expand their capacity to perform better in their jobs. As the staff develop, they can contribute to the growth and development of the company. Investing in your company’s talent is also an investment in the company. The longer you retain your talent, the greater the return on your investment. Studies show that training and development is an effective employee retention tool. Employees feel valued when companies invest in their growth. It shows that the company is committed to both the growth of the company and its talent.

Assumes Responsibility for Outcomes

Great leaders understand that they are accountable for all results—both good and bad. Shirking responsibilities is a character flaw. The familiar phrase “heavy is the head that wears the crown” is derived from this concept. The burden can be quite heavy at times. Poor leaders absolve themselves of their responsibilities when there are losses and take the glory for the wins. Even with a team of great leaders, the buck stops with the one who is at the top.

If things fail or don’t go as planned, the head person in charge should assess where the breakdown happened and take the required action to prevent a repeat of the failure. Conversely, when things go well and according to plan, leaders should keep the company on course so that the success can continue. The price of leadership is that even if you have a poor team that makes bad decisions, you are still to blame. You also get to relish in the victories when the company meets or exceeds its goals.

Exemplifies Behaviors Expected

The best form of leadership is leading by example. The “do as I say and not as I do” method of leadership produces followers who lack integrity because it is not practiced at the top. This will set a negative tone for the entire culture of the company. Integrity is when your actions align with your words. If you want your team to show up for meetings on time, you must be on time. If you want them to be excellent in their quality of work, then you must be excellent also. Another great old adage, “actions speak louder than words,” is fitting here. You will set the standard for your team by your actions.

In many ways, your company will be a reflection of who you are. Whether they want to be or not, entrepreneurs are role models for their team. Your team will look up to you as someone to emulate. How you handle problem-solving, how you treat others within your company, and many other actions that you demonstrate are teaching others which attitudes and behaviors that are acceptable and which ones are not. This requires leaders to have a reasonable degree of emotional intelligence to understand how their actions and words affect their team.

Makes Difficult Decisions for the Greater Good of All

Having the courage to take charge even in the face of challenges is another mark of a true leader. Staff and stakeholders ultimately look to the business owner for solutions or guidance during a crisis. If sales are down, staff morale is low, your top client is threatening to take their business elsewhere, or your company receives bad publicity, you, as the leader, must step up amid trouble to avert a crisis. Especially in cases where there is much to lose, it is vitally important to demonstrate strong leadership. In a crisis, it may not be wise to put the fate of your business in the hands of someone else.

Another mark of a great leader is being a pillar of strength and resolve, particularly when the company is facing challenges. With a solid team advising you, decision making becomes a lot less burdensome. Some business owners have to decide whether or not to discontinue a product or service, letting go of team members, or developing policies to handle difficult or unsatisfied customers. Although some decisions might be tough to make, their impact on others on the short and long term should be taken into consideration.

Motivates Others to Take Action

As a leader, you have to possess the ability to rally the troops. When there is a mission to be accomplished, it is the leader’s job to understand how to best motivate their team. Some examples are setting monetary incentives such as bonuses, honoring them with public recognition, sharing positive feedback, and simple gestures like saying “thank you.” If you are unsure about what will inspire your team toward taking the actions you want, then simply ask them. Keeping a motivated staff is a small price to pay in exchange for getting them to accomplish company objectives on a consistent basis. A motivated staff will make your job as a business owner much less taxing.

A compelling vision can also activate your team to do their best. People like to feel like they are contributing to something great. If an entrepreneur is willing to help align the team members’ talents, skills, and passion with the mission of the company, very little motivation will be needed to keep them inspired. Passion and purpose are closely intertwined and where you find one you will find the other.

Manages the Strategic Direction

In the context of entrepreneurship, leaders also create the mission and vision of their companies (why they exist and what they set out to accomplish), establish the company’s culture, decide the company’s brand identity, and provide direction for the company. The leadership responsibilities of an entrepreneur are to identify the short- and long-term goals of the organization and map out a strategic action plan to achieve those goals. This requires a leader to see what’s ahead before anyone else can see it and make adjustments accordingly. In order to manage the strategic direction of the company, the business owner must understand industry trends and other external factors that may affect business operations, such as laws, economic conditions, supply and demand, and more.

Leading the way in a business requires having enough foresight to maneuver from one goal to the next in a planned and prudent manner. Business owners must be willing to look ahead in order to be competitive in the marketplace. Setting new trends and staying on the cutting edge of industry changes is vital to staying relevant and in demand. Based on what’s going on in the marketplace, the onus is on the entrepreneur to set the necessary course of action.

Holds Their Team Accountable

This one is often difficult for new leaders to do. Taking corrective actions, confronting certain negative behaviors, making requirements known, telling staff when they have fallen short of expectations, reprimanding team members when needed, being firm on deadlines, and so on are normal and necessary tasks of leaders. These responsibilities are not for the faint of heart. It might be uncomfortable in the beginning, but leaders must do these things or the organization will lack structure and order.

Accountability holds team members and the business owner responsible for fulfilling their performance obligations to the company. It also demonstrates that there are standards set by the company that must be followed from the top downward. Without accountability, quality can suffer. Lack of accountability is a breeding ground for low standards.

Seeks Feedback for Improvement

Even the greatest leaders have room for improvement. Getting feedback from others around you in your organization will help you to grow as a leader and help you to remove blind spots that prevent you from seeing your own shortcomings. Seeking feedback demonstrates that you respect the opinions of your team. This also shows that you want your team to view feedback as an opportunity to improve, which contributes toward building a healthy organization.

Feedback provides great data for implementing changes necessary for the growth of both the organization and the staff. It is an effective and proactive means of seeking ways that the company can be better. Getting and giving feedback can also spark innovation because team members are invited to be candid with their suggestions to improve. Some of the greatest ideas are generated by the team. If a leader thought enough of them to hire them, then what a waste of talent it would be to not permit them to express their brilliance.

After every major launch of a service or product into a new market, I host a team meeting to debrief. During this meeting we review what went well and what could have gone better. The team is glad to give their input because they feel connected to the vision. For customers, we send out surveys to ask about their experience and provide insight on what we can do better in the future. The results have given us invaluable business intelligence to apply for ongoing improvement.

These 10 foundational characteristics of a leader provide insight into the mindset of an entrepreneur at the helm of an organization and/or team. Ongoing leadership development is paramount for every entrepreneur. It fosters personal and professional growth while serving as a great example for your team to follow. Leadership development can provide new tools to help an entrepreneur become more effective in leading.

There are a variety of leadership styles, and I’m certain that you will find the one that works best for you. My personal philosophy on leadership is probably best described as a servant leader. I feel that not only is my team there to support me and the company’s objectives but I am also there to support my team. I have worked for enough bad bosses to know what is good leadership versus poor leadership (see Figure 2.1). Therefore, I have developed a genuine concern for the well-being of my team. I wrote an article on Forbes.com, “Leading with Love: An Unconventional Approach to Leadership,” which explains this concept and more of my convictions about being a leader. (Cuellar)

Figure 2.1 What type of leader do you aspire to become?

People who have never served anyone or anything make horrible leaders! There is a disconnect between that type of leader and their team because they have never been in their team’s shoes. This often creates a lack of empathy of what it takes for the team to do their jobs well. Unrealistic expectations are typical of leaders who have never served. Leadership is not about barking orders to people or giving commands, rather, it is about inspiring and equipping your team to be at their absolute greatest.

Ultimately, you get to decide what type of leader you want to be. However, an autocratic, dictator-style of leadership will likely be the most ineffective way to lead in most business cultures. Low morale and high turnover of staff are associated with this domineering style of leadership. It is a sign of great leadership when employees or team members are effective, productive, and inspired.