The previous article Leaders at All Levels highlighted the idea that leadership and personal finance are not mutually exclusive topics. Earning higher income is a key strategy to build personal wealth, and for most persons, higher income is usually achieved through promotions in their jobs. I believe the most effective way to position yourself for a promotion is to demonstrate you have leadership qualities.
To accept this premise, we must unshackle ourselves from the belief that leaders only exist at senior levels in an organization. Instead I believe leaders could exist at all levels of an organization’s hierarchy because leaders are not determined by rank but by the need to guide others to a particular objective.
To demonstrate that you are capable of leading, you have to adopt the leadership behaviours and attributes discussed in the previous article; however, adopting a leader’s value system is only half the battle. The next logical question is, what do leaders actually do every day? I don’t mean their job/responsibilities. I mean what are the actions leaders take, well, as leaders? What is the “playbook” they apply daily that defines them as leaders and sets them apart?
- 1 Leaders versus managers
- 2 The playbook
- 3 They build trust
- 4 People Management Strategy
- 5 Closing thoughts
Leaders versus managers
Before tackling this question, let’s side track for a moment on a related question: what is the difference between leaders and managers? This is an often debated topic, and I often wonder, why the debate? In my view, the easiest way to look at it is, you lead people but manage tasks.
Leadership is sometimes associated with some sort of “vision”, while management is regarded as some sort of administering activity that ensures things happen as they should. To me, this distinction is meant to create an excuse for leaders to preside – hover over the dirty work and be “kept informed”. A good leader must do both – create the vision and manage the details. Leaders do not preside: they get involved, lead by example, and own the result.
The best description I ever read about the distinction between leadership and management was the following:
“My job was to make sure everyone understand that the impossible was possible. That’s the difference between leadership and management.”
(This statement was from the book “Leading” by Alex Ferguson and Michael Moritz. See link below.)
What a simple, yet energizing description! If no change is needed, you manage the process and make it efficient. Unfortunately, status quo never lasts long: change is continuous. Once change is needed (however large or small), it represents an unknown i.e. the “impossible”. A leader’s job is to help guide everyone to the impossible by getting them to do more than they believed they could.
Let’s return to the actions leaders take on a daily basis:
They set high standards
This is fairly straightforward: mediocrity is neither accepted nor tolerated. To ask those around you to do more than they believe possible, the bar must be set high, with continuous improvement being the unspoken watchwords for every activity.
They build trust
Leaders recognize that trust has to be earned and is only achieved over time. Equally important, it is a continuously fragile condition, taking a significant effort to create, but easily destroyed.
They build trust by:
- Being transparent – they are open books with no hidden agendas.
- Engaging in direct but respectful communication. They tell the hard truths – no sugar coating because people deserve honesty – only with honesty can true growth or improvement take place.
- Acting with integrity, which simply means, words and actions line up. The cliche, yet and absolute truth is: they walk the talk.
- Treating everyone fairly. There are no favourites – people are recognized, rewarded, and given latitude based on their commitment, effort, and contribution. Fair treatment is sometimes confused with treating everyone the same, which makes no sense because everyone is different and their circumstances (including the value they add) may require a different approach.
They prioritize people and their development
The hallmark of a leader is their approach to people, evident in several ways:
- First and foremost, before you become a leader it was all about your success; however, when you become a leader it’s no longer about you – instead, your focus is directed towards the people you lead and their success; therefore, a leader develops others and builds their confidence. Leaders do not hoard praise but ensure that credit for success is shared widely.
- A leader understands the power of team versus individual. A motivated and high functioning team crackles with energy and multiplies effort, but the leader recognizes that building and maintaining a team takes time and continuous attention.
- A leader learns to delegate as a core skill. Delegation does not mean transferring the tasks you dislike (or are not interested in doing) to someone else. Delegation is about properly managing the use of one’s time and enhancing overall productivity – it is impossible for a leader to do everything. Secondly, and probably more importantly, delegation is a way to empower those around you to be exposed to new challenges and allow them to take risks in a controlled manner. It helps them build confidence and skills. A leader also recognizes that while responsibility can be delegated, accountability cannot.
- A leader encourages his team to make mistakes and fail because they are tremendous learning opportunities. If no mistakes are being made, no one is taking risks to push the envelope or trying to improve. In the case of people error, they do not finger point or waste time laying blame – they acknowledge the mistake and focus on solutions.
- Leaders understand the carrot is more effective than the stick. Occasionally some sort of “punishment” or consequence (for unacceptable actions or behaviour) is necessary to show that leaders are serious about maintaining discipline, focus, or principles. But leaders know that long-term success is not achieved with negative actions. Instead, the team must be motivated to succeed by earning their trust and respect, getting them accustomed to wins and triumphs, and encouraging continuous improvement. An important aspect of motivating is building a connection to the people you lead, which means getting to know them personally, learning about their “story” (we all have a story that defines us based on collective experiences), and understanding what drives them individually.
They are available and approachable
How often do you see leaders with locked doors or an annoyed look when you approach them? Or in many cases, they are rarely even around or visible. How can people believe they are a priority if there is no effort to prioritize them?
This does not mean leaders must always drop everything they are doing to address a team member’s needs. It means your people must feel comfortable to approach you at any time and about any topic, but when you need to defer them for a bit, they understand and do not feel that they are imposing on your time.
They are always learning
Leaders acknowledge they are not all-knowing and may not be the smartest person in the room. In fact the diversity of skills that is frequently required to achieve major goals usually means leaders are often guaranteed NOT to be the smartest person in the room. They ask a lot of questions, even if it makes them look dumb, and they solicit feedback for improvement (even of themselves).
They encourage debate and disagreement
No optimal solution is arrived at without investigating a problem from all angles and challenging existing norms and traditions. Leaders therefore create an atmosphere that encourages respectful but vigorous disagreement and debate to achieve the best solution. But importantly, after a direction is determined, they ensure even the dissenters are focused on the path forward.
They reduce complexity and chaos for others
Many problems are fuzzy, the solution uncertain or may seem insurmountable, or the considerations and options too numerous for dedicated effort on all. A leader shoulders this burden, this apparent chaos, by applying focus in various ways:
- They make choices and set priorities
- Their eye is on the prize/the solution/the goal and do not allow the team to be distracted with peripheral issues that may arise along the way
- Their gaze is usually slightly ahead – to what comes next. As a result, they tend to anticipate problems or seamlessly guide the team to the next step
They make difficult decisions
Leaders do not try to please everyone or make friends – they accept leading is not a popularity contest. Leading is about making the best decision in a given set of circumstances, even if it’s an unpopular one. This is especially the case when leaders make a decision based more on trusting their instincts or gut feel than the wealth of evidence in front of them.
People Management Strategy
To return to the premise of this article series: I believe career progression can occur more rapidly if a leadership mindset is adopted. Leaders achieve more than individuals because they harness the power of team. Greater achievements make you a more valuable employee – one that is promotable and entrusted with the organization’s key initiatives.
Given my belief that leaders need to exist at all levels in an organization, I genuinely believe widespread education in leadership thinking and actions should be the cornerstone of an organization’s people management strategy. Leadership education should not be restricted to expensive programmes for “C Suite” executives. It should become mandatory education for all employees (and be recognized in compensation systems) in order to become part of an organization’s culture and value system.
This article series is not suggesting that everyone will progress to actually lead – many people have no wish to become a leader, which is perfectly fine. Being a leader is like stepping out onto an open plain with a target on your back – you are exposed, open to criticism, your mistakes are published for all to see, and quite frankly managing staff can be hard at times.
Many prefer to avoid this type of burden and “stress”. What they do wish for, and rightfully should expect, is to deal with colleagues or bosses who approach a problem maturely, and quite simply, make you want to come to work every day. In a nutshell, their boss should have a leadership mindset and use the leader’s playbook.
We hope you enjoyed reading this article, which was a continuation of Leaders at All Levels. We hope the connection between leadership and achieving your personal finance goals is now clearer and encourage you to adopt a leadership mindset and use the playbook!
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