All businesses, including yours, can be classified into four categories:
- “At-Risk.” Leaders in this group have lost control of the business and possibly their personal lives, too.
- “Average.” These businesses are doing well enough to reasonably satisfy the leaders but are vulnerable to regressing back to at-risk.
- “Well-Run.” These businesses are well managed by leaders, respected in their industry, and likely in the top 25% of businesses measured in terms of professional leadership. However, these businesses are still vulnerable. Why? They have not yet created a leadership culture in which organizational excellence is second nature—regardless of personnel changes.
- “Excellent.” Here, professional leadership is a way of life because there is a disciplined process that propels the business into the upper 5% of organizations.
Take the “At-Risk” Quiz
Here is a brief quiz that can give you a sense of where your business is operating right now. Answer each question with a YES or a NO. In order to generate meaningful results, you must be ruthlessly honest with yourself. If the answer is NO, choose NO!
- Do you have a vision for your organization that is regularly reviewed to determine if it still reflects what you want the organization to become some day? (YES/NO)
- Can every employee explain your organizational vision without assistance? (YES/NO)
- Do all employees understand how the organizational vision relates to their job? (YES/NO)
- Do you have a strategic plan that covers a three or five-year period, and is updated at least once each year? (YES/NO)
- At least annually, do you analyze each market segment to determine key factors like competition, government regulations, changes in technology, demographics, industry trends, etc.? (YES/NO)
- At least annually, do you analyze your strengths, weaknesses, opportunities, and threats in each market segment? (YES/NO)
- Within each market segment, do you know the strengths and weaknesses of each major competitor and how they compare to yours? (YES/NO)
- Do you have an up-to-date organizational chart? (YES/NO)
- Is your organizational chart aligned in a manner that enables your strategy to be implemented? (YES/NO)
- Are the reporting lines on your organizational chart absolutely clear to everyone? (YES/NO)
- Do you have a succession plan for every position, including your own? (YES/NO)
- Are there up-to-date job descriptions for every position in your organization? (YES/NO)
- Do you know specifically what skill sets are needed in each position on your organizational chart? (YES/NO)
- Do you objectively evaluate the degree to which each person meets the required skill sets of each position? (YES/NO)
- Are you willing to hire others who have greater skill sets than you in order to achieve your organization’s vision? If this hasn’t actually happened, answer NO. (YES/NO)
- Do all people at every level in the current organization have the skill sets required to perform their current job? If you don’t know, answer NO. (YES/NO)
- Does the organization have an independent outside board that does not include friends, family, company accountants, company attorneys, company bankers, or others for whose advice the organization already pays? (YES/NO)
- Would your employees say your processes are well documented, clear, and repeatable? (YES/NO)
- Are your processes linked to job descriptions? (YES/NO)
- Do you have incentive compensation plans linked to your processes? (YES/NO)
- Are training and development built around your processes? (YES/NO)
- Are your processes continuously re-evaluated for relevance? (YES/NO)
- Do you set individual performance metrics for each employee at the beginning of each year or each quarter? (YES/NO)
- Do you conduct performance appraisals based on individual performance metrics with each employee at least annually? (YES/NO)
- Can you say with certainty that all incentive compensation plans/bonuses are based on formulas, not discretion? (YES/NO)
If you answered NO more than 10 times, there is a very strong likelihood that your business is currently AT RISK … that you could easily lose all you have worked for … and that your stress levels are too high and your personal life is suffering as a result.
If you answered NO between 5 and 9 times, the odds are good that your business is currently at the AVERAGE phase. It may be functioning well enough to satisfy your own immediate financial needs, but it is not well positioned for long-term growth, and it could easily slip into the AT RISK category.
If you answered NO between 2 and 4 times, your business is probably WELL RUN, meaning that it is operating in the top quarter when compared with its competition. However, there is still room for improvement in terms of the leadership culture.
If you honestly answered NO to only one of the questions, or to none of them, then congratulations! You are leading a company that is committed to ongoing improvement and organizational excellence.
Nine Warning Signs for Leaders
One of the common attributes of leaders in the at-risk group is a low level of professional leadership skills for managing and growing the company. These leaders typically have some common characteristics:
- They are unwilling to relinquish control.
- They stay within their comfort level, focusing on what they know.
- They continue to be a doer, working in the business and not on the business.
- They believe their own professional leadership skills are enough to grow the company.
- They continue to hire people like them or hold onto employees too long.
- They do not believe in sharing company information with employees.
- They do not set realistic goals or hold people accountable for specific behaviors that support those goals.
- They do not set a good example for their employees.
- They see themselves as above everyone else.
Do any of those warning signs ring a bell for you as a leader? If so, you may want to consider initiating a relationship with a personal coach – someone who can help you to move your organization and yourself toward the level of excellence by helping you to identify obstacles, set new goals for yourself and your team, and move outside of your comfort zone.
For more information, please visit https://www.sandler.com/resources/sandler-books/road-to-excellence
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