LEADERSHIP DETERMINES FINANCIAL PERFORMANCE
John, the COO, looked troubled as he sat in the conference room with Susan, his friend and confidant and one of the promising young associates in the firm. “You know, the partners really have done a pretty good job of building this firm, and we should be grateful for the opportunities they have provided us. They’re good, decent people who have always tried to do the right thing. However, they’re beginning to think about retirement, and I’m worried that we don’t have a sound growth plan with the right people and processes in place to insure the continued financial success of the firm.”
Susan listened to John empathetically and then said, “Well, nobody and no organization is perfect. I guess we just need to do the best we can under the circumstances. Maybe it’s not as bad as we think. Things have a way of working themselves out sometimes, you know.”
Susan is obviously a kind and caring person. In fact, in this situation she’s actually being too kind and forgiving of the leaders of her organization. Some approximation of “stuff happens” was popular as a bumper sticker a few years back. It wasn’t true concerning organizational life then, and it’s not true now. Things don’t work themselves out; the leader of an organization makes decisions that bring predictable consequences.
The quality of leadership decisions is the #1 variable affecting the financial performance of an organization. Good leadership leads to good financial performance, and poor leadership leads to poor financial performance (assuming, of course, that the leader has the power/authority to make decisions and be held accountable fairly).
· What if the organization is undercapitalized? It’s the leader’s job to find more capital.
· What if the marketing program isn’t all it could be? It’s the leader’s job to strengthen it.
· What if the partner group doesn’t have the level of trust and teamwork that is required to take the firm to the next level to insure its continued success? It’s the leader’s job to create it.
· What if the economy is bad? It’s the leader’s job to adjust the strategic plan to succeed in the new environment.
· What if you don’t have the right people and processes in place to achieve the organization’s goals? It’s the leader’s job to find them and improve them respectively.
(Hopefully this poor, tired leader will delegate some of these responsibilities to coworkers, consultants, etc., but he/she is accountable for the performance of the organization nonetheless).
Technique #1: Insure that you and your organization are well educated in the skills of strong leadership.
Technique #2: Recruit strong leaders into your organization.
Technique #3: Accept accountability for the quality of your leadership skills and how they determine the performance of your organization.
Technique #4: Ask for help when you need it—none of us can succeed very well as an island.