Leading A Business, The Impact Of The Managing Director

Thursday 17 February, 2005

by Benleys MRI

If a business is lucky it will have an MD who understands that his/her behaviour influences the decisions and performance of their senior staff.

Regardless of the size of the company, there are critical cause and effect behaviors that MDs need to be aware of:

Don’t punish bad news.

Leaders who fly off the handle when bad news arrives don’t realize how much their emotional outbursts can shut down communication. Their management team will withhold negative news in the hope they can fix the problem before the leader hears about it. They will waste endless hours massaging data, wordsmithing memos, and rehearsing presentations until they are sanitized and guaranteed not to cause a stir. The problem, of course, is that the truth is always masked and issues go unresolved. Then, bang! the preverbial hits the fan and the MD learns about something too late.

Beware the "Open Door" policy.

Put yourself in your manager’s shoes. They have a lot of issues that probably should be discussed with the boss but they don’t want to bother the MD because he is very busy. They know that they are expected to solve problems on their own, so they don’t want to look inept–or worse–needy. This can happen at every level of an organization when a leader relies on the Open Door to hear about issues. It’s a risky approach. Leaders need to get out of their office and walk around, have lunch with employees, have friendly chats, visit sales staff in the field and be visible and accessible.

Invite challenge and debate.

Unless a leader encourages this, he or she may not get it. It’s often necessary for the MD to be direct about it, "Let’s make sure this will work. I want to hear all the reasons why it won’t so we’re not surprised later." Even if a leader is not intimidating, direct reports will often hold back on making comment without a direct invitation.

Ask advice from a wide spectrum of excellent contributors.

Leaders can run into trouble when they only rely on a few key advisors. Not only will the advice be limited in scope; it will create an unhealthy dynamic within the management team. For instance, executives and managers will quickly learn who is in the inner circle of confidants. If they are on the outside, they will resent being excluded, which may cause them to distance themselves from the "in" crowd and even withhold information from them. Political jockeying will begin, as people maneuver to gain access to the MD.

Beware of rewarding loyalty over competence.

We all see what happens in politics. The loyal one seems untouchable and is viewed through the rose colored glasses of the MD. As the loyal one has been granted this special safety, he or she would never risk jeopardizing this situation by challenging his or her benefactor. For example, successful entrepreneurs sometimes aren’t objective about the employees who were with them from the beginning, when times were tough. If the loyal one is a poor performer, good employees will become frustrated with this cog in the wheel of effectiveness and will lose respect for the leader. Great performers will not play on an uneven field and may take their ball to a company where competence is rewarded more fairly.

Beware of the being away from the fray.

Some MDs are so busy visiting customers, active in community affairs and out and about networking; the mothership begins to drift. Managers have to make decisions and without the ultimate decision-maker, dissension can break out and politicking can eat up vast amounts of time. The vision becomes fragmented and momentum stalls.

Corporate culture is everything. Good leaders create this culture.

Source:ceoonline.com