The Art of the Highly Effective Leader

Are you a leader? Whether you're an executive or an entry-level employee, leadership is a truly essential skill that can propel you and your career to bigger, better things. That holds true for both leaders of large teams and self-employed people who are guiding a team of one.

What are three habits a competent leader practices regularly?

The first habit is asking different questions. This is about expanding your curiosity. The second habit is taking multiple perspectives. This habit is about listening well and understanding the perspectives of others. The third habit is looking at systems, and that one reminds us that while the human brain likes to break things down into manageable parts, it is the unwieldy combination of those unmanageable systems that opens us up to new possibilities.

Do even the best leaders make mistakes?

Yes. They'll get mad and make mistakes and hurt people. And sometimes they won't even recognize that they've done that. But the best leaders never stop learning, never become so arrogant or complacent that they stop believing they have room to grow. They never become so hopeless or discouraged that they believe it's not worth the effort. John F. Kennedy wrote "leadership and learning are indispensable to each other." The good leaders never forget this.

What else separates great leaders from everyone else?

They create environments where people can be at their biggest. We all have the experience of people who make us smaller and less capable versus those who make us more capable in their presence than we are without them. Good leaders remember that their perspective isn't the only truth, and they welcome entire human beings into the workplace -- inconvenient emotions, vague hunches, thoughtless mistakes and all. When people see us in our messy wholeness, we can spread out and become bigger.

If I want to become more of a leader today, how should I start?

The most important thing; Believe that you can change and begin to look for the ways you might need to by asking for feedback from others. Forgive yourself for your limitations (rather than denying them or beating yourself up about them), and then seek to grow beyond the way you understand the world today.

Business Etiquette and Conduct

I stand up when a lady arrives at or leaves a table. I know, that is nostalgic and even possibly risky, as it might be perceived as sexist. However, it is one of a set of manners I was taught as a child that I still follow. Holding doors, taking hats off indoors, pulling out chairs and lowering voices all seem to be quaint throwback ideas that are dying rapid and unceremonious deaths.

Because of diversity training, political correctness and the changing mores of society, I think the clarity of what are considered to be "good manners" has become murky. The basic guideline of "treat others as you would wish to be treated" is less of the clear path to follow as individualism changes the interpretation.

Manners are still important and can be differentiating, often times in the negative. When you make a mistake, it sticks out and is memorable. For that reason, there are certain things that you must get right.

1. Use of names -- Get the names right. Phonetically write them down and make certain that anyone who is prospect or client facing knows their names. Spelling, correct titles and deciding whether to use a nickname or proper name are all on the "must-get-right" list. I have seen big sales blown up because of a repeated misspelling of a key player's name.

2. Confirm before you proceed -- Ensure that you have agreement at each step in a meeting, tour, phone call or visit and that all of the participants have their questions answered before going to the next set of ideas or concepts. Adults not only stop listening to you when they get stuck or are in disagreement with what has been put forth, they also begin building resentment towards the speaker who proceeds without clearing up the issue.

3. Declare your accountability and keep it -- At the end of each meeting, visit, or call. It is your responsibility to declare what comes next. It is rude to ask the typical question, "What are the next steps?" You asked for the meeting, now you need to be able to provide an encouraged path to follow.

4. Host well when you host -- If you are feeding your visitors, feed them well. Creature comforts including temperature, lighting, drinks and room conditions are all noted. In the better sales organizations, even when those companies are tiny, the handling of a visitor is handled like a guest at Sunday dinner. Even the little details can make the person feel honored and valued.

5. Be gracious as a guest -- Diana Ross may be able to pull of a diva routine, but you can't. Your goal is to be gracious for what you receive. I am amazed at the number of people who miss the most basic of "Please" and "Thank you" courtesy when support staff brings them water or provides help with the projector. Buyers notice and cast a broad net of perception as to what you and your company is like based upon how you handle the simple courtesies of interacting with support staff. Be gracious in every contact.

These manners probably seem like common sense. They are to the degree you get them right. They are deal killers when you get them wrong.

Mentoring: The benefits for all!

For a young entrepreneur, a close mentoring relationship is like having a big brother in the office. The big brother knows the ropes, has a large network of friends and is bigger than the bullies. There are countless benefits of having an experienced, fully engaged business mentor on your team. Here are a few of the highlights.

First of all, if you can find an experienced mentor in your field, then you'll gain access to that person's extensive network of contacts. Building an effective professional network is still one of the hardest parts of starting a new enterprise, even with social networking Web sites like LinkedIn. If you're looking for a vendor, supplier or investor, the mentor knows exactly who to call. And unlike you, his call will actually be returned. That's priceless.

If you can establish a trusting and mutually beneficial mentor relationship, your mentor will not only share his or her ideas, but also a long and valuable list of "lessons learned." Mistakes are a great way to learn, but some are so costly and time-consuming that it is best to let someone else do the "learning" for you. By analyzing your business plan and keeping track of your major upcoming decisions, a good mentor will help you steer clear of the biggest blunders.

A healthy mentor relationship is really an informal education. You can learn a lot in an MBA program, but there are some lessons that can only be gleaned from real-world experience. In an Inc. magazine article from 2000, a small-town businessman named Kent Sutherland described the unique mentoring relationship he shared with billionaire and Wal-Mart founder Sam Walton. Sutherland met Walton as a 23-year-old salesman peddling health-care products for a national supplier. Even though Sutherland never worked for Wal-Mart, CEO Walton took the young man under his ample wing. When Sutherland talks about the benefits of the relationship, he cherishes the nuggets of common sense wisdom -- like "always diversify" -- that helped him make a small fortune in unglamorous businesses like insurance, storage units and mortgage brokerages.

The best way to find a business mentor is to get out there and network. Start by combing through your connections on LinkedIn or searching the online alumni directory at your alma mater. You'll have a better chance of making a solid connection if you already have friends, colleagues or colleges in common. Local mentors are best, so consider joining the local chapter of the Rotary Club, Toastmasters International or Entrepreneurs' Organization. Attend some meetings, identify potential candidates, and start asking people out to lunch or coffee.

There are also national small business organizations designed to help connect entrepreneurs with resources and mentors. The National Association of Women Business Owners and the National Federation of Independent Business are good places to start. The U.S. Small Business Administration partners with a Web site called SCORE.org, which connects small business owners with online mentors. There are also regional SCORE offices across the country where you can seek out offline mentoring relationships.

What characteristics should you look for in a potential business mentor? First, your mentor needs to have experience with your exact business situation. If you are trying to raise venture capital for a tech start-up, find someone who's successfully funded and launched a profitable start-up (or six). The important thing is that your mentor has done what you want to do and gone where you want to go. Otherwise, you might get a lot of good general business advice, but nothing you can apply directly to your current situation.

Secondly, your mentor should have an established network of industry contacts. This is one of the greatest benefits of having a mentor -- instant access to a Rolodex of savvy investors, trustworthy vendors and potential partners. For this reason, a business mentor doesn't necessarily have to be older. It's his or her years of experience in your field that matter most.

Thirdly, your mentor should actually care about you. Your mentor needs to be someone who is deeply invested in your success; not financially, but intellectually and emotionally. If your mentor truly cares about your success, he or she will be more committed to regularly scheduled meetings, feedback and networking on your behalf. Of course, a crucial aspect of caring is honesty. The best mentor shouldn't be worried about hurting your feelings. Your mentor should tell it like it is, pointing out the weak parts of your business plan along with the strengths.

Risk Management-Business

Recognizing the Complexities of Risk Management:

The concept of risk management seems simple; perhaps that is why it is often overlooked. The unfortunate results of insufficient risk management are serious losses in dollars and management time. Risk management, crucial to all businesses, can be extremely complex.

In today's economy, parties are more litigious and businesses must understand and address issues that can lead to corporate as well as personal liability. Often risk can be limited or transferred through insurance, contract or proper documentation. The key is to track all contingencies and implement a comprehensive plan to monitor them. Missing one component could result in a catastrophic loss and make all other efforts futile.  There is less room for error as businesses strive to survive in this economy.

Injury and Business Claims:

Insurance is crucial to protecting a company against inevitable claims.  The type of coverage needed varies by industry.  Professional service companies such as law firms, accounting firms and medical practices will need professional liability coverage.  Construction industries will need policies to cover site injuries and auto accidents. Retailers will need general liability insurance in addition to "umbrella policies" that covers a number of risks such as personal property, liability, fire, theft, and medical.  Workers compensation insurance covers your employees, but not third parties, independent contractors or employees of others.

The implementation of policies and procedures designed to prevent accidents and insurance claims are as equally as important as maintaining insurance policies.   Maintenance on work equipment, comprehensive safety procedures and rules can limit accidents. Implementing investigation and documentation procedures minimizes exposure and ensures accountability. Warnings and safety rules should be posted and included in employee handbooks. If procedures are implemented, they must be followed and enforced.  

Business claims are expensive and, in most cases, a negotiated resolution is preferable to litigation. Contract, environmental, intentional torts and intellectual property claims may not be covered by insurance. Clear documentation of all agreements can help avoid confusion and limit future disputes.

Business Structure and Corporate Maintenance:

A company should generally operate as an entity (Corporation, Limited Liability Company (LLC), Limited Liability Partnership, Limited Partnership) for asset protection of both the company and its owners. Many legal and tax benefits also exist. Selecting the proper entity and maintaining it are essential.  Due to their combined tax and liability benefits, LLCs have been the entity of choice for those companies that qualify.  Corporations must be properly maintained to shield their shareholders. Establish separate corporate bank accounts, keep minutes, prepare State filings, and authorize transactions in minutes. If corporate form is not followed, the "corporate veil" could be pierced. The rules vary for LLC's and other entities.

Other potential business structure problems exist such as mixing LLC's and corporations, unwittingly exposing a parent company to the financial troubles of a project subsidiary, dissolution issues and securities law issues. 

Insurance:

Carefully analyze your insurance policies so you are aware of the scope to which you are insured. Are the limits of liability and deductibles appropriate for your business? Does you CGL (Commercial General Liability) policy exclude coverage for your "work product" or for damages that first manifested prior to inception? Are there contractually assumed liability exclusions? Be careful when renewing policies as new riders or exclusions may enter the contract.  Time spent regularly reviewing all of your insurance policies is essential.

Contracts and Administration:

Business contracts generally contain a promise by one party to defend and indemnify the other against claims of third parties. The extent of the indemnity obligation depends on the specific contract language. How the provisions are drafted is critical. Many indemnity agreements are too broad and, therefore, void and unenforceable. If shifting risk contractually, then the provisions must be specific.  

Many contract provisions have a great impact if there is a dispute. Care in negotiating or drafting indemnity, warranty, attorney fee, and damage limitation provisions is essential. Courts routinely reject "boilerplate" provisions. All contracts should be kept available and reviewed. Dates or milestones in contracts should be calendared.

Employment Issues:

As an employer, you have obligations to your employees that can lead to liability if those obligations are not met. The establishment of clear and fair written company policies can be an invaluable tool in avoiding employee confusion and complaints. However, one of the worst mistakes an employer can make is to establish a policy and not follow it consistently. An employer can actually create liability for itself by establishing a policy and not abiding by it.

Appropriate investigation of employee complaints and adequate disciplinary action can shield an employer from liability even if a complaint is valid. Formal training and regular refresher courses for all "management" employees regarding their responsibilities to identify and resolve potentially inappropriate behavior are necessary. Again, consistent and thorough documentation is invaluable. 

State and Federal regulations require employers to confirm citizenship and work eligibility for employees and submit I-9 forms to the appropriate agencies. Failure to comply can result in penalties as well as potentially forfeiting valid defenses to termination claims.

Typical employment-related lawsuits are generally not covered by a company's CGL policy. Because of the growing number of lawsuits, many insurance companies offer Employment Practices Liability coverage tailored to cover claims for wrongful termination, discrimination, and harassment. 

Succession and Estate Planning:

Succession planning is the transfer of business interests upon retirement, death or sale. All businesses need to ensure that ownership interests are transferred effectively, with minimal taxation. There are many planning tools available, such as buy-sell agreements, family limited partnerships, living trusts, life insurance, annuities and disability policies to fund a business upon sale or transfer. Failure to plan for orderly business succession can result in monetary loss. Estate taxes alone range from18 to 55%, frequently resulting in liquidation or additional debt.

All business has risk. Understanding the extent of risk, planning around it and minimizing it will ensure a smooth running business and help avoid catastrophic losses.

If any of the aforementioned gives you cause to question your coverage of Risk to your business, give me a call at 502/599-8313 or e-mail me at stevehomola@gmail.com .  I can help!