Top 5 Leadership Problems in Small Business
- Posted: August 11, 2010 by Stacey Abler/ Last modified: August 3, 2010
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The leader of a small business is the person that the other employees look to for guidance and motivation. A weak leader can cause an entire business to collapse regardless of how strong the employees of the business are. Problems with leadership in a small business should be addressed as soon as possible. Leaders should not assume they are infallible and without weakness simply because they have been chosen as the leader of the organization. All employees should strive to grow, learn and change to stay on top of their game – leaders included.
Inability to Adapt
In an ever-changing business world, leaders must always be willing to make changes to adapt the business. Change in the regulatory environment or simple changes in market preference can undermine the success of a business quickly if the leader is not willing to make simple steps to institute change. Business plans should be followed but a good business leader knows that the plan is a guide and is not set in stone. All leaders must be willing to make changes and adapt when the situation calls for it.
Lack of Team Building Skills
A leader is only as strong as his team. If a small business leader is unable to motivate his team to success, the business will be doomed. A good business leader is able to build a team and encourage them to work together by leading by example. A strong team can be a competitive advantage over the competition and should be leveraged. Leaders should always be striving to increase the strengths of the team while addressing any areas of weakness in a supportive, learning environment.
Ignoring Competition
Some business leaders believe that their business or product is the best on the market and cannot be touched. While it may be the best, if the competition is ignored, then the coveted top spot can quickly be lost. Leaders should not ignore what the competition is doing or discount its tactics. A smart leader will evaluate the competition on a consistent basis to maintain its competitive advantage in the marketplace.
Employing “Yes Men”
All leaders should encourage employees, customers and vendors to bring concerns and dissenting opinions to the attention of management and leaders of the small business. These opinions can alert management to underlying issues that may eventually damage the operations of the small business. Just because the opinion is the opposite of the leader does not mean it should be ignored. A good leader is able to look at an issue from all sides and this includes welcoming others to bring to light the other sides of an issue.
Knee Jerk Reactions
While leaders need to be able to adapt to changing business environments, they should not be too quick to react to the situation. Proper research should be conducted to ensure that the right changes are being made. When cash flow problems present, it is generally a knee jerk reaction to cut the most expensive parts of the business. However, if these parts of the business are the ones producing income, this can be a mistake. Do not react hastily and ensure all the facts are present before acting.
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These are all very good points. One issue I see in small businesses (my own included) is that a ‘leader’ in a 5000 employee company is different that a ‘leader’ in a 10 person company in terms of hands-on involvement. A small company doesn’t have the luxury of having a leader who wants to ‘lead’ everyone, they need another pair of hands doing the same work as they are. So I think leading by example: work ethic, company loyalty, productivity are more leadership functions WHILE doing the same ‘jobs’. Inability to adapt is a killer and I think rightly the first one mentioned. When everyone is leading in a small company, adaption is part of the culture.
The only constant is change, and like Darwin said, it’s not the smartest, but the most flexible that survive.