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66. Leadership thinking for small business (part 1)

We have been looking at some of the motivational theories and how they apply to small business. In the area of leadership, the gurus come by the pile, with lots of theory and not much evidence. What it is critical for a small business to know is that leadership is not the same as management, and that even a one man band needs leadership.

Leadership is about direction; in a business choosing an appropriate path in given circumstances and guiding the business along it. Management is about making the practical stuff happen, handling situations. Even a one-man band can have a problem of leadership if, as so often happens, the owner becomes so engrossed in managing that he ceases to have a direction. And of course, if the business involves any more than one person, the problems of leadership take on a whole new dimension of differing aims, aspirations, views of the world etc. (and sometimes it can be easier to lead 200 people than one person!)

So leadership is relevant, however large or small your business is. So let’s have a quick scan of theories.

Originally there were the Great Man theories that leaders are born not made, and theorists studied their characteristics. This led to Traits Theories – that leadership can be defined by certain traits and skills – this had so many answers that it did not lead anywhere. These theories were about identifying leaders. But it encouraged the Behavioural Theorists (on the back of McGregor’s Theory X and Y see earlier blog). An example is Blake & Mouton’s Managerial Grid, which looks at the concern for people  and for output as the two axes on a grid where managers can be defined by their style. This raised the question of whether one style was more suited to a particular situation than another and led to Situational Theories so that by identifying the situation one could adopt an appropriate style. Then Transactional Theories look at how the leader and the group interact. Increasingly we have gone from identifying to learning how to.

Perhaps one of the most  influential of the theories has been John Adair’s Action-Centred Leadership model which looks at the leader’s role in three overlapping dimensions: achieving the task, building the group to deliver it, and supporting and developing individuals within the group. It is focused on skills which can be learned; a person can learn to be an effective leader.

We can look at this in the context of a small business such as a shop. The first leadership dimension is the task: probably initially a marketing one of deciding where the shop fits in the competitive environment, what image it needs to portray and what values it has. (In a large organisation this might be a team activity but most usually not in a small business). Without some vision of how the business should be and where it should go, there can be no leadership, as this implies direction.

The second leadership dimension is the team, getting the staff to buy into this overall concept of the business and where you are trying to go. Without the commitment of staff, you end up with a business that sends out mixed messages (The newsletter from the WOW Awards for customer service today gave the example of 2 uniformed staff from a health foods shop standing smoking outside the front door!).

The third leadership dimension is working with individuals to contribute as much as they are able, and at least as much as is required, to achieve the results you want. This might, for instance, involve developing one person into a supervisory role for when you are not there, or developing specific skills for certain tasks.

Where does leadership stop and management begin? Does it matter? But whether you employ people or are on your own, setting the direction and making sure the motivation is there is clearly separate from making it happen, and it is particularly crucial that managing the day-to-day does not happen instead of determining the course and ensuring the resources are there to reach the destination, but as well as.