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The Do’s & Don’ts of Leadership For Higher Profitability
By Bob Prosen
Up one month, down the next.
Like it or not, this just seems to be our economic reality for the foreseeable future.
Unfortunately, you can’t just hit PAUSE until things improve. You’ve got a business to run!
Your job as a leader is to make the necessary adjustments to plow ahead and succeed.
So whether gas prices go up or down, the housing market improves or consumer optimism increases is all somewhat irrelevant to the small business owner.
While those factors may change the rules of the game, don’t let them alter your ability to manage a thriving business. You have to be willing to make some tough changes and ADAPT, but it doesn’t mean you can’t turn a profit.
Since it does no good to pretend conditions are better than they are, let’s first uncover the harsh realities of doing business and then look at six tangible leadership tactics to put you on the path to profitability.
With the right leadership skills, profitability for your business is not out of reach!
The Cold, Hard Facts
Along with declining employment, we also face increased gas prices, political uncertainty in Washington, as well as overseas, and overall rising costs for doing business. Oh, yes, and let’s not forget the credit situation which remains extremely tight. For small businesses in particular, the impact is draining.
On top of that, it’s simply becoming harder to compete. New businesses, created by smart, unemployed entrepreneurs, are popping up all over offering lower prices. And large companies (once competing up-market) now have moved down to go after smaller opportunities.
But enough doom and gloom, let’s focus on how you can navigate toward higher profitability by following a few simple leadership “Do’s and Don’ts.”
The Path to Profitability
There is something you can, and should, do to build positive momentum. Use this time to revamp your business policies and practices to operate with greater efficiency and innovation.
Most important, have the courage to “do good and do well” not only by your business, but also your employees and community.
It might sound simple, but in reality it’s one of the most challenging leadership issues you’ll face.
Forget easy, politically correct, or most comfortable — it’s about having the fortitude to make the right decisions even when they’re difficult.
Increasing your profitability is doable, but you can’t afford to take a “business as usual” approach if you expect to get anywhere. It takes guts to make tough internal changes.
To keep your small business profitable, you must lead first with integrity. Looking for the quick road to success, regardless of consequence, sets the whole company up for failure.
Leadership Do’s and Don’ts for Building Profitability:
Now is the time for action! Create a leadership plan to play through this economic downturn and position your company for better times.
- Do create a culture with a fierce commitment to meeting goals and objectives guaranteed to sustain profitability and exceptional employee morale. You need this in any economic climate.
- Do becomemore hands-on and pay attention to details. Don’t be afraid! In the end, it’s going to benefit your bottom line. And yes, this also applies to those of you who don’t like the details!
- Do hire people smarter than you. Once you’ve got the right people in the right positions, step out of the way and let them do their jobs.
- Do have the courage to make tough decisions and take calculated risks.
- Do build a collaborative work environment where employees’ ideas and talents are sought and respected, even if/when they’re not identical to your own thinking. Encourage collaboration, have an open door policy, and listen! It’s key to leading a profitable and visionary company.
- Do maintain a high ethical standard — ALWAYS!
Along with the “Do’s” are, of course, a few very important “Don’ts.”
- Don’t allow yourself to get comfortable. Great leaders are brave enough to grow, and as John Maxwell said, “If we’re growing, we’re always going to be out of our comfort zone.”
- Don’t believe that “Good=Complicated.” Experienced leaders understand the power of simplicity. Simple and easy initiatives often are the most successful.
- Don’t make it personal. It’s fine to be hard on performance, and you should be. In running a small business, you can’t allow numbers, commitments and objectives to go unmet. However, don’t take it out on your people. You want your employees to feel free to talk about both successes and failures. Keep your focus on the business problem.
- Don’t fall on the sword of, “But that’s the way we’ve always done things!” What worked in a booming economy might not be the best solution today. You MUST be willing to change. Continuing down the same road can ruin a business and drive a business owner to the brink of insanity. Errors, rework and the use of inefficient procedures and ineffective technology will bleed your organization of precious profit dollars.
Profitability eludes plenty of businesses these days. It seems like we’re all just limping along trying to stay in the game.
While some of these “Do’s and Don’ts” require gradual shifts in leadership strategy, many can be implemented immediately. All will help you on your path to profitability as part of a sound leadership development strategy.
The Key: Improving your business profitability hinges on your ability to avoid challenges that negatively affect your bottom line, and it starts with mindset. A willingness to walk away from the status quo can be incredibly difficult for business leaders. But you must do it!
As you begin to make some of these positive changes, I hope you’ll let me know how things are going. Together we can start conversations to help stir action and get this country moving in the right direction.
image of pause button: theragblog