The Ultimate Tie-Breaker

Whether they acknowledge it or not, most business owners and executives know when their organization has outgrown its current leadership.

Like our dated electronic gadgets, some leaders who were right for their original mission may have been obsoleted over time.  But acknowledging the need to address a change is thorny. It’s not uncommon for businesses to endure a leadership mismatch by substituting quick fixes to avoid stepping up to a tough decision.

When assessing the performance of a faltering leader, it can be tempting to rely on hope – that in another one, three, or six months, the executive will finally click. That’s not likely, and in each passing month, the company overpays for deficient results.  They’ll miss new offerings, markets or customers.  Essential operating improvements will go unrealized. For major sales, collaborations, mergers or acquisitions, the enthusiasm of a potential partner will be dampened by an unimpressive colleague.  Finally, they’re not a match for fast-moving competitors.

The Right Leader                                                                                                                                                                              

Different leadership traits are demanded by each stage of a business’s evolution — conception, launch, growth and maturity — and also by changes in company structure or ownership.

As an illustration, a $5 million-business will not realize its growth potential if led by $5 million talent. That is to say, best leaders in a growing business should have experience and abilities beyond the size and complexity of their current company. They’ve previously lived and understand what a successful business with sales of $10 to $20 million needs to look like, and what it takes to get there.

A leader should never be someone whose selection is settled upon. Weak leadership is a competitor’s dream.  If current leadership is not stretching the business or its team to be the best they can be, it is time to take a look at what they’re bringing to the table.

The right leader will be organizationally committed, goal-oriented, selfless and confident enough to hire others of equal talent to build an exceptional team.

Beyond business acumen, their personal chemistry and their success in molding a positive company culture are critical.  Without the right chemistry and culture, they’ll have difficulty collaborating with peers, marshaling the support of subordinates and establishing credibility with anyone.

The multiplier impact of uniting a great leader, a solid culture, and a cohesive team is stunning.

When It’s Time for a Change                                                                                                                                                                  

Most companies have not constructed talent pipelines to prepare internal talent as replacements for key positions. Thus, it’s easy to understand why an organization wouldn’t rush to replace even an underperforming leader. Plus, an executive search takes time and money, whether the company engages a search firm or tries its own hand.  Further, it will take even the best new executive about six months to get up to speed.

Like any business-critical investment, success will be gauged by rapid, quantifiable returns.

After six months, new executives should begin to more than pay for themselves. But if a right selection wasn’t made, the missed fit will drive added costs (rather than profits) – this atop the costs of the search, the ramp up, and unrealized improvements. It’s crucial that every business gets their executive search right – the first time.

Each company needs to understand their cost of retaining underperforming leaders.  In its competitive deployment of strategy, capital, and people, the right leadership will be the ultimate tie-breaker.

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