Business Basics: How SME business owners can develop leadership skills

14 April 2020

Welcome to this month’s edition of Business Basics, an interview series where we chat to experts with something to say on current business topics and trends. Ideal for SMEs hoping to level up, our business Q&As provide actionable tips and advice on everything from writing business plans to maintaining a positive company culture.

In today’s Business Basics, we’re chatting to Ros Taylor, CEO of RTC Leadership & Coaching at In Touch Group, about how business owners can develop leadership skills and transition from owner to leader. With years of experience helping business professionals develop their leadership prowess, Ros provides her essential top tips on attaining greater confidence and influence as a business leader.

Read the full Business Basics Q&A with Ros below.

What is the distinction between being a business owner and being a leader? How important is it to recognise this distinction?

A business owner has often come up with the idea for their own business or bought into a franchise that they are running themselves. Their motivation might originate from a desire to be independent, put their stamp on a product or offering, and to be more in charge of their working life. They are responsible for everything from sales and marketing to client interface and accounts. The buck stops with them and they often work long hours to make their business successful. They may have business investors, but they will also have invested financially, as well as putting in time and effort as a start-up.

A leader in an organisation has a different focus. Yes, they have to deliver in a timely fashion; yes, they need to be customer focussed when necessary; and yes, they need to be financially literate, but the buck ultimately stops elsewhere.

When I was interviewing 80 CEOs for my book ‘Fast Track to the Top’, one of my interviewees was Tim Melville Ross who led the Institute of Directors. He was very aware of the difference between business owners and leaders, so much so that he decided to become a business angel. He told me that he needed to feel what it was like to put up your own money, risking it for something you believe in. However, even a business angel is not risking his livelihood, his home and his future. A business owner is.

Do small business owners still need to develop leadership skills even if they employ little to no staff?

If we believe that leadership is the skill of motivating a group of people to act towards achieving a common goal in a business setting, then the small business owner requires that set of skills to deal with the plethora of demands on their time. Especially if employing a small number of staff, leadership skills can enable them to create a group of advisors and supporters around them and to make that group feel part of the business.

The skills of influencing stakeholders and the skills of presenting business positives are essential to making a difference in a challenging customer landscape: all part of leadership.

image of ceo talking

How important is it for leaders to encourage their staff or team to become leaders themselves, even if they aren’t managing others?

Unless a leader can delegate to those around them, then growth will be limited. Scaling up a business requires a diversity of different talents to produce ideas, evaluate them and implement them. Helping others to be leaders in their own expertise is a major trait of the good business leader. In fact, they should want others to be better than them, encouraging those who will step up, produce their own business objectives and deliver outcomes. And they should also hire for difference. There is little use in having a team of ‘similars’.

When I started my own business, I used to wonder why staff often left after a few months to start their own businesses. Did they look at me and think ‘well if she can do it then so can we’? Perhaps, but more likely was that I was hiring people like me: people who were independent, entrepreneurial and motivated like me. After the third person left, I saw the pattern and started to use psychometric assessments to hire for difference, not similarity.

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If budgets are limited, what training and development resources are available to business owners?

There is much online training today which is inexpensive and available to all. Face-to-face is always more transformative, but if training is more content-focussed than behavioural, then much is on offer. Artificial intelligence has made many strides and can offer staff a chatbot which can encourage best practice and motivate compliance.

The Institute of Directors offers a variety of Leadership Masterclasses and online courses where business leaders can network and discuss best practice, as well as making useful business contacts. There are also several business forums where successful leaders share their journeys to success, supplying motivational tips and business insights. At RTC Leadership and Coaching, we run many leadership skills courses and offer executive coaching to business owners. Many of these offerings are face-to-face, but others can be accessed online.

When investing in training and development, always ask those who attended to share their insights on their return. There is nothing more demotivating than to return from a seminar to find that no one back at work is remotely interested and all learning is lost or indeed discouraged.

colleagues laughing

What would you say are some of the most necessary traits a small business leader needs to have to effectively manage a team?

The following list contains my personal very hard-won attributes:

  1. Resilience is so important for a small business leader as the road to success is rarely smooth. When you listen to those who have made it to the top, they often don’t mention the challenging times or have selectively chosen to forget them. Coping with stress is a major skill as the long hours involved can jeopardise health. An ability to pace themselves by taking days off can avoid burn out and developing an awareness of stress in others is crucial, as a leader has a duty of care to those around them.
  2. The need for security may be low for a small business leader as there are absolutely no sure outcomes, however, those in your team may feel differently. Good leadership will involve their team in the changes of the business without terrifying them.
  3. Financial planning is very important, as I have discovered over the years. Building up reserves for a rainy day allows a business leader and team to sleep comfortably at night.
  4. Adaptability is another key skill allowing a leader and team to listen to customer feedback and change accordingly. Of course, that is dependent on the desire to evaluate what you do and take on board the results.
  5. Delegation can be a challenge for the small business leader as they were there at the beginning and probably can do everything better than any new hire. However, the ability to coach a team to do what they do is pivotal for success. No delegation = no growth.
  6. Having the interpersonal skills to get to know your team is of prime importance, not only to understand capabilities but also to what life events might be challenging for them domestically. Leaders have a duty of care to those in their employ.
  7. A desire for continuous learning allows a leader to take their team in new directions, keeping pace with new consumer demands. There is no place for a stagnating business in today’s market.
  8. Finally leading by example in a small business is crucial as everything the business leader does is visible. If asking your team to be prompt for meetings do not be late yourself. Hypocrisy is noted and undermines morale.

image of handshake

Even though you’re in a position of leadership, perhaps public speaking isn’t something that comes naturally for you. What can be done to improve areas like this that are lacking?

I’m a great believer that everyone can present or speak in public. There is an erroneous belief that you must be formal and prepare a written speech which of course puts people off. Leaders should learn to tell stories about their life and business and just be themselves. I would also suggest learning how to Mind Map. Ideas can be assembled quickly with the topic in the centre and single words branching out. Read Tony Buzan’s book Mind Mapping and be adventurous.

Start by asking questions at small gatherings then agree to speak at meetings, graduating to conference speeches. Enjoy the challenge.

What challenges or barriers should owners be aware of when developing leadership skills?

The major block for business owners as leaders is thinking they must do everything themselves. They are ultimately responsible and that often leads to the habit of working long hours. Seeing it as a badge of honour, overwork translates into no-one else being good enough or motivated enough to do what they do. And of course, no one volunteers because it is already being completed by the business owner. This circularity is often very difficult to break as habit, fear and worry get in the way. Business owners need to take the risk of handing over their baby but can mitigate that risk by coaching their teams well.

The owner of a large building company used to tile all the bathrooms in his developments himself because he trusted no one to tile as well as he could. When finally realising this was limiting company growth, he came up with the idea of founding a tiling school where he would train apprentice tilers - a much better use of his time.

What methods can business leaders use to measure and evaluate their success as leaders?

Financial performance and growth are often used as indication of success, but leaders can also take a temperature check in other ways to gain insights.

They can suggest the team provides feedback on their leadership style. For example, how good are they strategically, how motivational are they, how good a communicator internally or externally and what might be areas for improvement.

In addition, they could ask clients for feedback about the service provided and areas for development.

woman ceo

What can small business leaders do to ensure they constantly develop their leadership skills?

There are so many development opportunities around today to help leaders keep up to date. Signing up to online services like LinkedIn and Fast Company, or Harvard Business Review or McKinsey updates are but a few resources.  However, there is nothing to beat networking with like-minded business owners where they can support each other. Having a network of confidantes is a necessity for business leaders who want a sanity check when everything goes pear-shaped.

We’d like to thank Ros for taking part in this edition of Business Basics. If you’ve enjoyed this article, consider reading more instalments of the series, including:

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