Essential Leadership Skills for Business Owners

Your Path to a Better Future

If you are the owner operator of a small business, by default, you are the leader.

Many small business owners are not all that comfortable as leader.  They prefer doing over leading.  However, they are smart enough to realize, if they are more effective leaders their business will produce better results and be less dependent upon them.

The challenge is where do you turn for advice on how to become a more effective leader?

There is an overwhelming amount of information on leadership.  Even if you pay attention to just a small fraction of it, you end up with a very long list of things you need to do to be a “good” leader.  It can be very confusing.

Of course there are lessons to be learned from the famous CEO leaders (i.e. Steve Jobs, Jack Welch, etc.) who tend to be studied in MBA programs and the dominate examples cited in much of the leadership development information. Your leadership challenges are different than theirs. You are interested in practical and relevant skills for your situation.

Leadership is Situational

There is no one list of leadership skills for small business owners. Understand leadership is situational – different situations require different skills. As a small business owner your situation is unique. You need the skills to lead a relatively small number of people who will help you grow your business your way.  One that is less dependent on you, affording you more freedom and financial success.

As the owner you have multiple roles in your business.  When you are filling the role of leader, what is your job?  You may not consciously make a distinction between your leadership role and what you do every day.  Defining the work you do when wearing the leader hat will help you determine the skills you will require.  I like Marcus Buckingham’s definition of leadership: 

“A leader’s job is to rally people to a better future”.

I think this is a perfect way to think about leading a small business.  It is simple, practical and easy to remember.

Five Essential Leadership Skills for Business Owners

If your role as leader is to rally people to a better future, what skills do you need to do that?  Here are five skills that will serve as your building blocks to becoming a more effective leader:

1. Vision

This is your ability to paint a clear picture of what your business will look like at some future date. If you expect people to follow you, you better be going somewhere.  Think of what you want to accomplish as your destination.  If you know where you want to end up, it will be easier to figure out how to get there.

Create or refine you vision for what success looks like.  Clarity is the key to an effective vision.  In addition to your destination, clarifying what is important to you and your business like core values, core purpose, culture and what role you want to fill in your business are all key elements of this work.  If you are going to rally people to a better future it starts with your vision of the future.

2. Strategic Thinking

If vision is your destination, then evaluating and choosing the best path to reach your vision is strategic thinking.  It includes your ability to focus on outcomes and keep your eye on the “big picture”.  The challenge is it is so easy to get caught up in what needs to get done today, you can easily forget about your destination.

It’s important to make some time to step outside of the day-to-day and stay on top of trends in your industry.  Anticipating future business opportunities and potential competitive threats are all part of the strategic work an effective leader does.

3. Communication

It is not enough to have a vision and a strategy in your head. You also need to be able to share it with the people who are going to help you achieve it.  The challenge for many small business owners is how do you share what is in your head with other people in a way they get it.

Just telling them once is never enough.  You need to repeat your message often and consistently.  Your ability to help people confidently see what comes next, how the work they do every day aligns with where you are going, and what’s in it for them is how you will engage your people and rally them to a better future.

To help business owners become better communicators we have developed tools plus a specific meeting rhythm to allow them to easily and more consistently share the vision, strategy, mission, core values, goals and priorities.  This ongoing sharing and conversation about the business creates a common point-of-view and language for your business which is foundational in building your culture.

4. Relationship Building

Being able to understand others’ perspectives and deal with them effectively is a key leadership skill. Business is all about relationships. The higher the quality of your relationships – in your personal life and business life – will often lead to a more enjoyable and successful business.

Relationship power is a more effective way to get things done than position power.  Better relationships will lead to more frequent and meaningful conversations.  This will allow you to have deeper connections, and give you more opportunities to share the vision and strategy.  The more you share and connect with people the more they will trust you.  It is much easier to influence someone when then they trust you; as opposed to when they are afraid of you.

5. Action

You have all heard “lead by example”.  The small business owner may take this concept a little too far.  Believing if they put their head down and work really hard, go the extra mile for the client and keep an eye on every penny, people will follow and do the same. Visibly working hard is their version of leadership.

Instead, I want you to think about action in terms of what actions you can take as leader to get more and better results from your people. It is like moving from being the main player on your team to being a player-coach (and depending on your vision to being just the head coach).  Involve more of your people more often.

This means adapting more leadership behaviors like coaching, mentoring, supporting and team building.  These are the leadership actions that will enable you to grow your business in a way that is less dependent upon you and ultimately more enjoyable.

Decoding Small Business Leadership

Don’t over complicate your role as leader; don’t ignore it either.

Simply spend a little more time envisioning and thinking about the future.  Clearly and regularly share your vantage point and the direction the business is going.  Involve your people where ever you can. Connect and engage them in making the future better.

Focus on these fundamental skills.  They are skills that you will always use and will serve as the building blocks for you to become a more effective leader.  You will need additional leadership skills throughout the life of your business.  Your unique situation will determine which skills are required.  Leadership is a learned skill.  Once learned it is part of what you do – a set of beneficial behaviors.

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Kevin is the Co-Founder and President of The Renaissance Group, a coaching and consulting firm focused on helping business owners have more time, make more money and enjoy growing a business.