Leadership Principles

There are thousands of theories, suggestions, ideas, and pontification of what leadership is or what leadership looks like; which one to choose? Which is the correct definition of leadership? Is leadership the way United Airlines handled the bumped passenger an example of leadership? Politics in the U.S; is that leadership? The stewardship of Apple Inc. sans its prolific founder and patriarch; is that leadership?

Who knows. The bottom line is that all business, small and large must learn to lead in their own environment or circumstances. For example, would a successful owner of 5 franchise locations of McDonald's lead a manufacturing company in the same fashion? Maybe. But that leader must have the ability to realize that different environments require different management.

In all my years of consulting and owning businesses I realized 3 aspects of business management required to succeed; regardless the industry. Positively influencing these 3 aspects of business such to realize efficient profitability could be considered leadership.

Organization and Structure

Know what your company does for a living. Go out to the shop floor and see how the widgets are made. Learn how the widgets are made and see if there are process improvements to make. If there are changes to make, gather a team of employees who work closely with that process and have them come up with ideas to change and make that process more efficient, more effective.

Sit down and learn the accounting side of your business. It's OK, accounting doesn't bite. Learn where you revenue comes from and where it goes. If costs are too high well then that's why you were on the factory floor to see if you can gain efficiencies by changing a few processes.

The 4 Ps of Marketing

Product, Placement, Promotion, Price. What is the sales price of your product or service? How did you come up with that? Do you know that in your mix of product or service offerings you might have some dogs, laggards, or some cash cows that are actually doing the opposite of what their potential really is. Do you know what your loss leader is? A loss leader is the worm on the hook so to speak. How are you getting your customers to call you so you can offer them something and then offer them more "stuff". The grocery industry does this perfectly by offering milk and eggs at the lowest price possible, but still putting it in the back of the store.

HR as Assets

I have believed from day one that employees (humans) are assets to all business. With that, treat them as such. Ask them their opinions of operations. Ask around to see which of your employees knows more about widget making that you do. You will be surprised who bubbles up. My success as a consultant was based on my personal interviews with employees where I would take their ideas about how to make things better and actually installed their ideas into the business. Two things are gained here. One, the businesses always operated better because the employee who knew a more efficient way to make widgets actually changed a process for the better. Second, employee moral was super high because all employees witnessed how easy it was to make a positive process change within the company. Everybody happy.

I've always believed that leadership is simply common sense married with a great product or service. Just like Jim Koch noted that a formal education didn't help him as much as learning the beer business from the ground up. Jim didn't graduate from Harvard with a law degree and an MBA just to go make beer; rather after graduating he went to go to something he was passionate about, learned what he needed to learn to be successful in the beer world, and then simply created a great product.

Leadership is about walking the talk. In other words, put your money where your mouth is Mr. CEO, Mr. President of your dad's business, Mr. business owner of your wife's company and get to know your business, get to know your processes, and most importantly, get to know your employees.

Luis Luarca PhD

For more about Dr. Luarca visit Allectus LLC

Categories: Leadership

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