As a business owner, have you ever stopped to assess how strong your leadership team is? The abilities, communication styles, processes, and efficacy of your designated business leaders, or management team, are critical. Periodically evaluating your leadership team is also a key component of making sure your leaders are on track to meet goals and are keeping the rest of the company on track as well. Understanding your leadership team’s strengths, opportunities, and the role they hold within your company is an essential part of work done by business valuators and succession planners. This valuation area can help realign and boost the performance of your business for current success as well add value for when you begin to think about the future transition of ownership of your business.
The Long-term Impact of Strong Leadership Teams
One question to ask when evaluating your leadership team is: Are they a leadership team or simply a group of leaders. The former will be a dynamic, cohesive group of team members focused on shared goals who communicate, debate, and discuss issues effectively and for the well-being of the business. The latter is a collection of executives who do not have the firm in mind and are more focused on their priorities and personal growth.
The impact of strong leadership can affect multiple generations of your family. According to the Conway Center for Family Business, the tenure of leaders in a family firm is 4-5 times longer than in other organizations. However, only 30 percent of family firms survive for the owner to pass it on to the next generation. A recent Deloitte report notes that developing a strong leadership strategy is imperative for long-term success. “Development of a strategy and governance framework typically supports a long view of family wealth preservation and growth,” the report also addresses how many companies lack the experience and perspective to implement such leadership models and strategies, hindering their success.
Building Strong Leadership Teams
Here’s a closer look at some of the traits all management and leadership teams should encompass:
Whether the leadership team takes a formal or informal approach to planning, there should be a clear focus on reaching tangible business goals. Effective leadership teams understand the need for a clear-eyed, aligned emphasis on the visions, values and goals to uphold the organizations business mission. Infighting, prolonged focus on irrelevant issues, and a lack of discipline on these core fundamentals defines fractured and unsuccessful teams. A distracted leadership team will lose sight of the goals and result in delayed decisions on what matters most.
Defined Decision-Making Processes
Effective leadership teams have a clearly defined process for making decisions. There are no hidden agendas, there is ample conversation, and healthy discussion on issues. In an ideal scenario, leadership teams use this process to discuss specific agendas related to individual work needs. Decision-making discussions should be done transparently and with a greater goal in mind.
The Force Multiplier
A leadership team is a cohesive, efficient system. Great leaders recognize that the team’s needs and outcomes transcend the individual. They understand that the real value comes from the complementary and unique talents each member brings to the table. When teams are truly aligned, these decision-makers become force multipliers, amplifying the efforts and overarching goals of the business, creating force multiplier ripples throughout the organization, having a cascading positive effect to all employees.
Emphasis on Development
Does your leadership team focus on the development of team members throughout the organization? Strong organizational leaders identify human capital development needs through the planning process and invest in these areas, including professional development, training, and periodic evaluations or assessments.
A Trusting Space
Businesses that work best have created a space where employees and team members are comfortable presenting conflicts to decision makers and addressing them head-on. These spaces can only exist if there is an inherent level of trust among all team members starting with the leadership and management levels of the organization, each person can admit mistakes, and members know that there are processes in place for handling conflicts and making decisions.
Businesses today operate in a sea of gray. There are very few black-or-white decisions. That’s why effective leadership teams can manage well in the abstract. Adding to that complexity is the need to make decisions quickly in a fast-paced environment. When numerous inputs, variables, and outputs are presented in a situation, it decreases the overall team’s control, but having good communication and decision-making processes helps manage that uncertainty and remain resilient to the inevitable changes that may arise.
Where to Start with Building Your Best Business Leadership Team
Evaluating leadership teams is a crucial role in assessing and adding value to your business. Prometis Partners has knowledgeable experience on what great, not good, leadership and management teams look like and the qualities they possess. To help see where your company stands, what steps you can take to improve, and how to better equip your staff for future success, contact us today.