Leadership is having a plan and effectively communicating to each employee their role in that plan.

By Dirk T. Dieters, Executive Director of The Fremont Group

In our discussions with business owners leadership is often a central topic. As an owner you are attempting to get people to act in a way that they would not do on their own. You want them to act in the best interests of the company. “Alignment” issues are when the best interests of the company diverge from the best interests of the individual employee. Alignment is a topic addressed in accountability and incentives which are structural issues. Leadership issues relate to the ability of the owner to create “buy in” by the employees. Effective leadership requires the respect of the leader. Many owners believe that respect is earned by demonstrating their ability to do every task in the company better than the employees. This is obvious in a transition business—father thinks the best way to train his son is for him to do every job in the business before he takes over. This attitude is generally a reflection of simply not understanding how to train the son to do the job of “owner.”

Leadership starts with having a plan. I often use an analogy from the military (bear with me, I was never military and my military son laughs at this but you will get the point.) When the general first calls together his troops, what is it that the troops want to hear? They want to hear, “what is the plan?” The last thing that they want to hear is, “well, I’m not really sure what we are going to do but we will come up with something.” They want to hear, “We are going to take that hill tomorrow!” And they want to hear it said decisively. They need to know that you have done your job and identified the need to take that hill in order to accomplish the next overall objective of the mission or battle. So you call them together and tell them, “We are going to take that hill tomorrow!” What is their next question? “What do you want me to do?”

Each individual wants to know their role in accomplishing your larger objective. You cannot have each individual determining their own role—you have to assign it. “You are going to charge up the east side of the hill at 0900.” “You are going to go to the west side and charge up at 1000.” “You are going to stay here and follow up in a second wave at 1100.” “You are going to be the medics and stay here to take care of the wounded.” And so on. The thing that you cannot have is the people on the west side at 1000 asking themselves, “I wonder if we really should go up now?” They have to understand that their job is to follow those orders and the only way to avoid that disaster is to be sure that you have their respect before you start. They have to know that you have a plan and that it will be followed and that no matter how small, their role is critical in that plan.

The same applies to your business. You need to have a plan and you need to communicate to each person their role in that plan. And you have to have their respect. They don’t have to like you but they do need to respect you.

Are you ready?

Below is an article by Karl Forth from Cabinet Maker FDM that applies across the board to other industries.  The article can be found at http://www.cabinetmakerfdm.com/8229.html

When I travel to visit woodworking companies, I’m often asked, “How do we compare with other companies you’ve seen?”

That’s often a difficult judgment to make. Here are some of my own general observations from visiting many successful companies. Keep in mind that over the past 12 years I’ve visited mostly medium-sized and larger companies, while Will Sampson has visited many smaller shops.

Some of these observations have to be modified in the current recession. It’s harder to say no to work and some companies have had to be more flexible.

Successful companies…

1. Stay focused and know what they do well

2. Say no to some jobs if they don’t fit.

3. Get by with fewer employees.

4. Treat employees well, offering good pay and benefits

5. Emphasize training, both in new technology and employee development.

6. Have a core group of key people that have been with the company a long time

7. Use lean manufacturing techniques if possible. Companies are not afraid to redo the shop layout or manufacturing flow if efficiency can be increased.

8. Identify a need and match software to that need before purchasing.

9. Recognize when new technology can pay off, and are not afraid to make the jump to an advanced but unfamiliar technology.

10. Have upgraded their finishing capability.

11. Have little or no inventory. (Although recently we’ve seen more inventory creep back into some shops.)

12. Have some knowledge of competitors, as well as their strengths and weaknesses.

Also in that issue is a second article “Get Ready for Pent Up Demand” by Gero Sassenberg found at http://www.cabinetmakerfdm.com/Gero_Sassenberg/8267.html

These articles put into focus the need to invest in building your systems, procedures and controls and take this time to be ready to take advantage of the improving economy—whenever that happens!

Six Responsibilities of a Small Business Owner

The Fremont Group sponsors workshops based upon the book, Minding My Own Business.  The book identifies the six responsibilities of a small business owner and then analyzes each.  The Fremont Group derives funds in three ways—the sale of the book , donations and our workshops—all run by volunteers.  Do your own self-examination of your responsibilities.

  1. You must earn a minimum, mandatory percentage of profit.
  2. You must create cost controls to assure that the profit is produced.
  3. You must put your people into an organizational structure where they are responsible for the enforcement of the cost controls through accountability and incentives.
  4. You must sell—internally and externally.
  5. You must keep the money you make—tax and risk management.
  6. You must have fun.

How did you rate?

The Ambulance Down in the Valley

‘ Twas a dangerous cliff, as they freely confessed,
Though to walk near its crest was so pleasant,
But over its terrible edge there had slipped,
A duke and full many a peasant.


So the people said something would have to be done,
But their projects did not at all tally.
Some said, “Put a fence around the edge of the cliff,”
Some, “An ambulance down in the valley.”

But the cry for the ambulance carried the day,
For it spread through the neighboring city,
A fence may be useful or not, it is true,
But each heart became moved with pity,

For those who slipped over that dangerous cliff;
And the dwellers on highway and alley
Gave pounds and gave pence not to put up a fence,
But an ambulance down in the valley.

Then an old sage remarked, “it’s a marvel to me
That people give far more attention
To repairing the results than to stopping the cause,
When they’d much better aim at prevention.

“Let us stop at its source all this hurt,” cried he.
“Come, neighbors and friends, let us rally.
If the cliff we will fence, we might almost dispense
With the ambulance down in the valley.

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