Three Keys to Develop Leadership Skills - for Small and Medium Sized Businesses

Developing leadership skills is often an afterthought at small and medium-sized companies.

When companies start-up, and then launch into growth, there is little time to think about how the company will sustain itself long-term – survival is the immediate focus. Once things are humming along smoothly, many company founders begin to relax their control and would like to enjoy the fruits of their labor but then realize there are few other leaders in the organization because they haven’t thought to groom them.

Thus begins a period of attempting to promote leaders from within or hiring potential leaders from outside the organization; rarely does either approach work well.  When potential leaders – who have not been groomed to ascend in the organization – are promoted, they often lack the full complement of skills needed to lead because the owner / founder has been filling the decision-making role(s) for so long.  As a point of pride, rarely does a newly appointed leader admit they are in over their head or ask for more support from the owner / founder. Instead, these leaders often leave within the first year of their appointment.

When more fully capable leaders are brought in from outside the organization, they may find they are butting heads with the owner / founder because they are introducing new ways of working – informed from their external experience. Leaders brought in from outside the organization often fail faster than internal candidates, frequently leaving organizations in a matter of months. A 2019 study conducted by PriceWaterhouse Coopers found that successors to long-serving CEOs have short tenures and are often forced out of office. (Here is a recent example from AutoNation who replaced an “outsider” CEO after only four months.)

Every small or medium-sized business owner / founder should have a needlepoint sampler in their office that reads “The true mark of my success is to be able to walk away from this business and for it to continue to thrive.”  Adopting that mindset early on enables future leaders to be brought up from within the organization. This is the best scenario because they have organizational knowledge and relationships with others in the organization.

If you hope to exit your business without having to sell or close it, here are three ways to ensure you build a capable leadership pipeline.

First, begin leadership development earlier rather than later. Think of youngsters who begin T-ball at age five. There is no telling who among them will be a star athlete come high school or who will go on to a college or professional career; but rarely will one begin softball / baseball as a high schooler and go on to great success. When the skills and responsibilities are taught early and practiced for a decade or more, it is more apparent who is capable of further success.

Second, include everyone in leadership development opportunities. Don’t presume to know who among your workers will be a future leader – assume everyone will be. This will ensure you are more egalitarian about leadership development and, in the long run, will help your organization the most. Central to this approach is ensuring that there is a mix of learners in every offering. For example, a course on feedback skills should include individuals from all departments and all levels within the organization. This comingling nurtures relationships among everyone in the organization (a key capability of a leader) and enables every one – in every role – to be capable of giving back to the organization. Continuing with the sports analogy, when every new player is nurtured with the assumption that they are capable of becoming a stellar athlete, some will demonstrate a natural talent or drive to move to the “senior-leader team,” but everyone on the team will have increased their capabilities.

As an example, consider Tom Brady’s career vs. Johnny Manziel’s. One was a ninth-round draft pick and the other a Heisman Trophy winner. One went on to a stellar career and one flamed out after two seasons in the NFL.  Presuming who will be a leader is often a losing proposition – in sports and in business. 

Finally, don’t make the development of leadership skills another “thing” people have to do. Integrate skills development with real-world responsibilities. For instance, if a department holds weekly meetings, rotate the responsibility for facilitating the meeting. Why must the leader of the meeting always be the manager? Everyone should be able to follow an agenda, keep conversations on-topic, summarize decisions, and make sure action items are claimed.  This type of development ensures that when one does become a leader, they already possess the ability to manage a meeting.  There are a myriad of other skills which can be developed in this way, without an onerous (and often contrived) training process.  

In order to develop the skills of your organization’s future leaders, make a list of the ten skills you feel are critical to success, such as communication, an understanding of financials, customer service, etc., and identify ways to work the development of these skills into everyday work responsibilities. Assume everyone has the ability to lead, start early in people’s careers, and do formal training in mixed groups so that people can build relationships throughout the organization. These simple but important steps will help to ensure a ready and capable leadership pipeline for any organization.

Note: This article was previously published by Forbes.com.