Editor's Note: This is the fourth column in Chuck Gremillion's Family Business series. Read the introduction for his series by clicking here.
Setting the Table: Good Leaders Create an Atmosphere of Success
By Chuck Gremillion
Standing ovations are pretty rare in business. So it shouldn’t be surprising that I remember the standing ovation my sales staff gave me one day – not for meeting some amazing sales goal or because I gave them all a raise, but because I finally fired one of their colleagues. More about this story in a minute.
It is my opinion that the overwhelming majority of the best performing companies succeed because the leadership of those companies creates an atmosphere…an environment…a culture, that drives success at a high level. Almost always, the differentiating characteristic between a successful company and a similar company that does not perform as well is the quality of leadership.
So one may ask, what are the leadership qualities that allow one company to significantly outperform its competitors? In addition to those that I defined in my three previous columns (creating trust, providing clarity and alignment, and establishing a discipline of strategic planning), strong leaders expect high performance, are excellent communicators, encourage debate and are, most often, servant leaders. By putting all of these qualities together, great leaders enable organizations to separate their company from its competitors and, in many cases, dominate an industry.
An Expectation of Excellence
Let’s begin with a trait that is a must for any strong leader, an expectation of excellence. A great leader defines the goal for the team, provides the resources to achieve it, measures performance, utilizes strong communication skills, and insists on accountability. This recipe brings the best out of people and organizations.
During my first ten years as president of my family’s company, A&E – The Graphics Complex, our leadership team did a great job regarding the first four attributes I listed above, but a mediocre job of holding underperformers accountable. I eventually realized that I was a major contributor to the problem. Sometimes it was because I liked the individual and wanted them to be successful, even though their performance was not getting better. But, by not holding the underperformers accountable for mediocre to poor performance, I learned that I was keeping the company from achieving its goals, which was hurting company morale. As a result, non-family co-workers were becoming frustrated because management (me!) talked a great game but didn’t back it up. Not until I learned this lesson did our company perform at the level that we expected.
The most vivid example of this occurred when we enabled a sales manager, who truly believed that he was smarter than anyone else in our organization, to remain even though he wasn’t meeting company sales goals, and it was obvious that he was not a culture match for our company. Eventually, I made this realization and let him go. When I announced to our sales team the next day that his employment had been terminated, I received the above-mentioned standing ovation. I was embarrassed because our sales people had long seen what I had refused to see.
There were two lessons learned from this scenario. First, don’t allow underperformers to remain in the organization because it frustrates and demoralizes those who want to achieve and help the company be successful. Second, don’t be afraid to admit a mistake. All leaders make them, but the best learn from them and aren’t too proud to admit when they make one. The willingness of a leader to admit a mistake earns the respect of those who work with and for him or her. It also encourages others to do the same, which increases trust within the organization.
Family is NOT Exempt
One cautionary piece of advice for leaders of family businesses: make certain that family members, especially the chief executive, have expectations of their own performance that exceed what is expected from non-family employees. There is nothing more de-motivating to a team of employees than a leader who has high expectations of performance for everyone but himself or herself and the other family members working in the business.
In next month’s column, I will elaborate further on the relationship of leadership and high performing organizations.
Chuck Gremillion now runs Gremillion Consulting Services LLC, which focuses on the needs of small businesses. He is a past president of IRgA, and chairman of the IRgA President’s Council. He welcomes input and questions from other family business owners. He can be reached at firstname.lastname@example.org.