For any business endeavor to succeed, you need a solid leader who possesses a specific set of traits. In larger corporations, leadership has always been a highly discussed and celebrated topic. But what about leadership in small businesses? SMB owners are typically thrown into the fire as leaders and expected to adapt quickly. With your business potentially in recovery mode, you may be actively looking to fill vacant positions, and new hires may be scheduled to start soon. This could worry you since you’ve never onboarded before. Not only that, you may struggle with the thought of being a leader in this rapidly evolving digital age. Everyone has their own leadership style and you will develop your own with time. That said, there are some common themes and values that tend to surface with successful leaders. With us today, we have David Souaid, Chief Revenue Officer of OnDeck Canada, to take us through his thoughts of what it means to be a successful small business leader for the future.
Which Leadership Traits Should SMB Owners Possess?
Let’s face it, not everyone is a natural born leader. The good news is that leadership can be learned. As a small business owner, you should possess a few key leadership traits such as the following:
Empathy – Employees want to know the person they work for understands their concerns and genuinely wants to help them achieve their personal and professional goals. Being empathetic, especially among younger employees, is an important part of building a loyal, dedicated and hardworking team that will serve customers well. So much so, that in the 2021 State of Workplace Empathy Study, 75% of Gen Z said they would choose an empathetic employer if that meant changing their job, industry or career path.
Focus – In today’s fast-paced world, business owners are pulled in many directions, making it difficult to stay focused. Staying focused is critical if you want to instill confidence in your employees and your customers. Focus on specific goals, communicate them, and move collectively as a team. Be measured in growth plans and don’t be tempted to move into new business areas too soon. Remember, managed growth is key.
Resilience – It seems obvious in a post-pandemic world, but now more than ever it’s important to be resilient to the ups and downs of daily business life. This doesn’t only mean being a resilient leader, but also building resiliency into the business itself. This can be achieved by diversifying your revenue streams. Developing more than one source of income protects your business from unplanned circumstances, which encourages consistent growth and allows your business to continue moving forward. Building business resiliency also means establishing strategies to reduce risks in your business. The objective is not to eliminate these risks, as they’re inevitable in any business. But the more risk-resistant your business can be, the more resilient you will become as a small business owner.
Communication – Employees no longer expect to be told what to do. Instead, they want to be told “why” it needs to be done. They want to know how they can contribute to the customer experience and how they can improve the value of the overall business. Employees want a sense of transparency on where the business is at and where it’s going. It’s important for them to know and understand how they can help the business get from point A to point B. Involve them in decision-making, have them provide feedback, and communicate your business’s goals and vision clearly.
How to Retain Employees?
You may have heard about the Great Resignation which emerged at the same time as Covid-19. According to CIBC Capital, this resignation hasn’t quite come to fruition in Canada as it has for our neighbors in the United States. But some studies still suggest that roughly 65% of Canadians are considering leaving their job due to issues such as compensation, declining job satisfaction and overall well-being. As a small business owner, there are some things you can do to convince your employees to stay for the long run:
Empower them – Employees often struggle with not feeling valued in the workplace. We have all been there at one point or another. Working in this state can lead to demoralization, reduced productivity, and disengagement. That’s where employee empowerment comes in. Employees want to feel as though they are owners of the business and part of the decision-making process. Give them a voice and encourage them to provide honest feedback. Instill confidence in their abilities and watch as it leads to greater creativity and increases their motivation.
Challenge them – Give them challenges that will motivate them to learn, grow and contribute to the success of their career and your business. The Pygmalion and Galatea effects are powerful tools that you can use with employees. These principles reveal that employees perform in ways that are consistent with the expectations they have picked up on from managers. Set the bar high and adjust your expectations accordingly. Whether it’s communicated or not, employees will pick up on these expectations and will adjust their work behavior and performance.
Compensate them – It’s time to address the elephant in the room, compensation. Be proactive in terms of compensation, don’t wait until they come to you with a better offer or career growth demands. It’s been shown and communicated that employees who switch jobs every 2 to 3 years will experience a boost in earnings. Don’t let your business be another statistic. Study your competitors and pay more than what they would potentially offer. Set trends in your industry and always be ahead of the curve. Lastly, move in sync with inflation and increase salaries depending on where the Canadian economy stands.
Can Anyone be a Leader?
I don’t believe everyone can be a leader, nor do I think everyone wants to be a leader. Some people are naturally born with traits for leadership or with the desire to learn them. And others are content with doing the work that’s required for a business to operate well and not having to worry about the daily pressures of being a leader. For a business to truly succeed, both roles need to be filled. Find your strengths and passions as an individual and pursue them relentlessly. Managers need the doers just as much as doers need a manager.
The Future of Leadership
While some aspects of leadership, such as setting a vision and executing on strategy will remain, the future leader will need to possess a new set of skills and mindsets to lead. Leadership for the future is all about the engagement and empowerment of your employees. The days of top-down leadership are over. Moving forward, the next generation wants to understand why they are doing something, how they can impact the business, and the opportunity to provide open feedback. They want to be inspired and work towards creating something special. It’s much more of a bottom-up approach in terms of ideation and improving the customer experience. Employees are on the front lines and in most cases, they know the business better than the owner. What separates a good leader from a great leader is the ability to listen, to communicate effectively and to involve your team in decisions. Already, we’re seeing small businesses look and operate fundamentally different. Will you adapt to this new normal and become a future leader?