One of my readers asked recently, “can a business leader be a failure even when the balance sheet is doing well?” My response is, “yes — very much so.” It’s true that as a business leader, your preoccupation is to create value for your shareholders, as manifested by a strong profitability out-turn and a very healthy balance sheet consistently. That is your ticket to the game. A business executive who can’t deliver a good commercial performance is only living on borrowed time. So numbers not only matter – they are our source of “bread and butter.” That said, there’s a lot more to attaining the status of a successful business leader than “merely” delivering numbers.
For a start, the quality of the delivery matters to no end. If you are churning out high sales volumes in a consumer goods company, for instance, on credit and booking that as profit without the cash coming in, that is an unhealthy delivery and cannot or must not qualify a business leader as a success. So quality of the delivery is most important. This explains why, for instance, when a company announces its result, shareholders and investors are creating scrutiny around the quality of the numbers. If it’s a bank for instance, beyond the size of the Profit Before Tax (PBT) or the loan book or deposit, these stakeholders are provoking discussions around various key performance ratios such as failed or failing loans (non-performing loan, a.k.a NPL’s) capital adequacy ratios etc, to affirm that the performance is not lopsided. Furthermore, even when the numbers are of good quality, there are two further imperatives from my perspective: (1) Talent management for succession and (2) Governance — as in integrity and compliance.
(1) Succession Planning: We have seen cases of leaders who have demonstrated unquestionable technical competence in their business areas but failed woefully in talent management. One of the reasons we have cycled and recycled many leaders in key political positions in Nigeria, for instance, is that our past leaders have paid little or no attention to the matter of succession. We are a very interesting breed. We are forever watching over our back to see what subordinate is about to stab us in the back. As a consequence, we don’t trust them enough to delegate to them, mentor them and grow them. I hear some governors use their deputies like executive assistants, hardly ever tasking them with big decision-making challenges that stretch their leadership. They are simply at their desk to complete the team. In the same way, we have deputies to CEO in the private sector who have been so caged that they almost have to get the permission of their bosses to use the toilet – permit my exaggeration! Not acceptable. Regarding talent management and succession planning, we need to:
(a) Take bets on your people: When I was growing up with multinational companies, we used to talk about “taking risks” with our staff, but after a while, that was changed to “taking bets” on our people. Everything communicates. The latter provides better psychological mandate for the leader to support his mentee to be successful – that’s the major difference between taking bets and taking risks. Leaders must learn to take bets on their team, allow them to stumble and (maybe) fumble where necessary, and see how much they will grow that way. I was a young sales manager at Haco cosmetics, a division of John Holt Plc in 1989 when the branch sales manager in Kano had to take an emergency time out of the office for a month. We needed to bridge the gap. Kano was our 2nd biggest market (only topped by Lagos). I was two levels below the incumbent (and typically, you would get promoted in three to four years depending on performance – so I was effectively six to eight years too junior for the role). The company decided to take a bet on me. Thankfully, that experience changed my career story for the better. Someone took a bet on me.
(b) Investing in the growth of your team: Typically, when we assess out staff, we rate them based on their readiness to assume bigger roles. If you rate an employee R-5 (ready in 5 years to take over your role), the reality is, in 5 years’ time, nothing will have changed much if you haven’t been specific on the development areas and consciously invested in closing the leadership gap. Part of investing in the growth of your team is doing cross-functional capability building. I remember, when I was in Ghana and had my HR Director (HRD) on vacation, called in the Sales Director (SD) to act as HRD, there was so much noise about that being unconventional, but it greatly transformed the leadership of the SD. You must create the ambience for your staff to freely express themselves without feeling intimidated. Confidence breeds competence. (Even) making mistakes in your presence should be part of their learning curve.
( 2) Matters of compliance and values: Aside from succession planning, the other area, I believe determines the completeness of the success or otherwise of a leader is the area of compliance. So many technically competent leaders have failed to progress beyond certain levels, as they are said to be “in complete managers’ in the sense of – can’t be trusted, lack integrity, not tuned into the compliance agenda, etc. There is nothing more important than protecting your name in the corporate world by having your radar switched on always in the matters of controls, compliance and ethics. The adage that a good name is better than silver or gold is so true. At the time I was appointed CEO of Guinness Nigeria, after nearly 20 consecutive years of expatriates in that role, I recall having a meeting with the global CEO for Diageo where he was clear that beyond competence and intellect, it was their belief in my values, the tenacity for bringing purpose to life that made it an easy decision. One of Shakespeare’s quotes I find profound says, “Whoever steals my purse steals trash… but he that filches from me my good name …. makes me poor indeed.”
In closing, delivering strong commercial numbers consistently is absolutely the primary responsibility of the business leader, but is not in itself sufficient to qualify a leader as successful. You must in addition to this, embody the highest standards of corporate governance and be able to grow people to succeed you brilliantly, performing better than you when you are long gone. That’s the true definition of legacy.
Have a wonderful week.
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