Category: Business

Is situational leadership the best leadership style?

“Best” is relative when you’re dealing with humans. The most-effective approach is the one that allows for flexibility.

PUBLISHED MARCH 22, 2022 | BY GEOFF GENTRY  IN TEAMWORK

5-SECOND SUMMARY

  • Situational leadership takes a contextual approach to leadership.
  • In this model, leaders vary their approach based on an individual’s level of competence in a particular area.
  • Depending on the circumstances, a leader may choose to take a more directive or more supportive approach.

These days, it’s not uncommon to hear people obsessively talking about what “type of leader” they are. People are hungry for resources that will solidify their understanding of these archetypes. But obsessing over finding the right management style can be a dead end; not only are certain methods outdated, but there’s no single tool that will work in every situation.

If you want to build an effective, high-performing team that will stay relevant for years to come, situational leadership is the way to do it.

What is situational leadership?

Situational leadership is an adaptive leadership style in which a leader changes their approach based on the individual, the task, and the context.

Situational leadership theory changes the conversation from “Who am I and how do I lead?” to “Who is the person in front of me, and what do they need from me in order to be successful?”

This theory was developed by Ken Blanchard and Paul Hersey in their book, Management of Organizational Behavior.

Blanchard and Hersey call on the situational leader to utilize a framework that relies on flexibility, adaptability, and thoughtful analysis of what people need to develop and succeed. By letting context inform what an appropriate leadership style looks like in each situation as it occurs, leaders are able to take a nuanced approach to their responsibilities

4 examples of how to use situational leadership

Situational leadership is built on the idea that teams or individuals will be at different developmental levels in different areas of their job. Based on that context, leaders can adjust their approach to help individuals develop specific skills based on that person’s unique needs and area of work.

Situational leadership defines four development levels, paired with four behaviors, as a way of understanding a person’s growth and what is required from a leader to help them move forward. None of these behaviors is the “best,” because all of this is about taking a situational approach. Let’s take a look at each one.

1. The enthusiastic beginner

This is where almost everyone starts when they’re learning a new role or skill. Their commitment is high because there hasn’t been any experience that would challenge it, and their competence is low because they have little-to-no experience.

People don’t know what they don’t know. When an employee or teammate is learning something new, the best leadership for them will be highly directive. They don’t need to be encouraged that they can do it, as much as they need to be told what to do. This isn’t demeaning, it’s just the reality of starting to learn something new.

2. The disillusioned learner

When employees are at the disillusioned learner level, they’ve probably run up against their shortcomings in the competency they’re trying to gain. This experience of failure or inadequacy, coupled with only marginally increased competence, can be incredibly deflating.

As a person is confronted with the shortcomings in their proficiency, the natural reaction is to become discouraged. If you perceive that shift in your direct report, it’s essential that you add highly supportive behavior while maintaining a highly directive posture. The critical mistake leaders make in this stage is to think that because the person has been working at a skill that they no longer need direction. However, this is actually the stage where highly directive behavior is most important.

3. The capable-but-cautious performer

At this level, the employee starts to turn a corner. As their competence increases, often people will start to move out of that low-commitment funk.

This is a critical transition, according to situational leadership theory. As someone’s competence makes meaningful progress and their commitment level increases again, it’s important to scale back the level of direction you provide while maintaining a highly supportive environment.

4. The self-reliant achiever

At this point, the developing employee has reached a point of mastery in the skill they were learning. They can perform at a high level and feel confident about the quality of their contributions.

If a self-reliant achiever is a pro at what they’re doing, inundating them with tons of direction or smothering them with check-ins will most likely backfire. It’s a waste of your time, and takes their focus away from the thing they’ve become really great at. Managers of self-reliant achievers should focus on delegating tasks more than supporting their work.

Good leaders take different behavioral approaches to each of these developmental levels because what each level requires to succeed is different. There is no one-size-fits-all approach to leadership, and you should be suspicious of anyone who claims otherwise.

High-functioning teams are supported by leaders who focus on the practical needs of the people they’re leading and offer support specific to the areas where their team is stuck. Smart managers, practicing situational leadership, give their teammates exactly what they need, when they need it.

How to Buy a Business

Ellen Chang 

FEB 12, 2019

So you want to be a business owner, but the prospect of starting your own business is intimidating. One potential solution: Buying an existing business. An existing business typically has customers, vendors and branding already in place. A good company will also have an adequate amount of inventory. That means you can take the key and continue the business without having to build supplier relationships from scratch.

This isn’t an easy route to entrepreneurship, though. Buying a business can be a complicated and arduous process, so you need to know what you’re getting yourself into. Here’s what you need to know.

Buying a Startup

If you’re an existing business owner who wants to expand your services or products, consider buying a startup. You can purchase a startup for its client list, brand, technology or intellectual property.

There are a lot of good reasons why buying a startup might be a good idea for a current business owner:

  • Buying a startup can help you attract and retain a different demographic without starting from scratch. 
  • The startup might have a distribution method that is a good fit for your own business.
  • While the profit margin of a startup tends to be lower than an established business, it might also have less debt. 
  • A small startup might be more nimble and able to adapt to change.

If you decide to go this route, take a close look at current staff. Look for businesses who have founders or staff with the type of talent that you are seeking. While you can always poach talent, buying a business could allow you to acquire a team that already works well together and is invested in the mission of their business.

Keep in mind that if you need to finance, startups present their own set of challenges.  Obtaining a loan for a startup business can be harder, since it would not have as long a track record as a business that has been operating for a decade. The startup might not even be profitable yet, and you might need to demonstrate a path to profitability or show how it will contribute to your own company’s bottom line.

Purchasing an Existing Business

If an existing company better fits your needs, look for one that has a good reputation, a steady list of customers and low operating expenses. Understand, though, that buying an existing business means doing a lot of due diligence. Here are some things to look out for:

  • The founder or owner will likely downplay any issues with a landlord or customers. Ask plenty of questions and ask for documentation.
  • Examine several years of its financial information and focus on how much profit it generated. Also look at its cash flow, debt levels and other expenses such as rent, marketing and advertising.
  • Determine if the owner plans to stay on or has any children who expect to take over a portion of the business. Hammer out all the details beforehand.
  • Acquiring an existing business might be more costly, especially if prior investors are involved. Consider whether you are willing to seek additional investors and take on a bank loan.

Above all, make sure you go into things with an understanding of what’s made the business successful. Buying an existing retail shop or restaurant might be easier than starting one from scratch, but remember that if you change the direction or tone of the business, the existing customers may not accept the changes readily. Further, radical changes to the business and its operations could alienate existing employees. Put your own imprint on the business and find ways to improve, but tread carefully.

Buying a Franchise

A franchise is in many ways the ultimate ready-made business. The brand is already established, and your involvement in marketing may be minimal. Certain aspects of its operations may be set in stone. If you take over a restaurant franchise, for instance, everything from the supply chain to the menu will likely be fixed.

Conducting due diligence on these businesses can often be easier, too. They have a longer history, more financials and other investors. If it’s a public company, it will be even easier to find key information on the business and its financials.

There are some decisions to make, however. You must decide if you want to buy a franchise in a new or existing location. Finding the right location will take time, and requires some research to ensure adequate foot traffic. And don’t assume that the branding and marketing will take care of themselves. While large franchises have a recognized brand, some of them are only well-known in certain states or regions of the country. Consider carefully whether this is a business and a brand with staying potential in your area.

One major issue with a franchise is the loss of control. You must adhere to its rules, procedures and other standardize practices. That might be a relief to some would-be owners, but others might chafe at it. Determine if you’re an entrepreneur at heart or merely want to purchase a business which generates a healthy profit.

Disadvantages

Even if a startup or existing business is highly profitable or popular, there are some disadvantages. In most cases, you will have to retain its current employees at least for the short-term. Turning over an entire staff is not a good choice fiscally or operationally. Don’t underestimate the value of institutional knowledge, to say nothing of the impact on morale of mass layoffs.

On the other hand, existing staff might be resistant to any changes you want to make. The employees may also not like new ones that you hire. And any changes that you make toward the pay structure, benefits and other human resources issues could face resistance. Assure your employees that you are going to stay in business and will not make drastic changes. The same is true for its board of directors and its investors.

Problems could also arise with your customers, clients and vendors. They likely have certain expectations of the business: The products it sells, its methods for doing business, and the length of billing cycles.

Decide before you purchase the business whether you want the CEO or founders to stay on to provide a smooth transition or if you want them to resign soon after the deal closes. There is no right or wrong answer to this issue. It depends on your goals for buying the business, as well as your personal preferences.

Before you sign a contract, consult and hire a business broker who can help guide you in the process. This process can take several months or longer and you will likely need the assistance of an auditor and lawyer. You will likely also need to employ the services of an accounting firm specializing in mergers and acquisitions. 

More Tips for Business Owners

People who own businesses also need to conduct their personal finances differently. Your taxes become more complicated, for one. Your budget and overall financial plan will also become more complicated than if you had an ordinary full-time job. That’s why many business owners choose to work with a financial advisor who specializes in these issues. We recommend using this financial advisor matching tool. Just answer some questions about your finances and goals, and the tool will match you with up to three advisors in your area.

Photo Credit: ©iStock.com/shapecharge, ©iStock.com/skynesher, ©iStock.com/valentinrussanov

ELLEN CHANG

The Power of Micro-Innovations

The Power of Micro-Innovations

Britney Cole / February 10, 2022

When we think of innovation, people like Thomas Edison, Henry Ford, and Steve Jobs tend to come to mind. The lone hero in solitude has a hold on our imagination, but the truth is that innovation is rarely the result of an inspired genius toiling away in a garage.

Groundbreaking innovation takes lots of people. Consider that more than 1,000 engineers worked on the first iPhone. More than 7,000 people worked on Curiosity (the rover on Mars). The takeaway? Innovation is a team sport.

Innovation doesn’t have to be splashy either. Call it micro-innovating. In fact, small and incremental changes can have an oversized impact on your work life. When to innovate? Anytime you feel your work isn’t serving the greater good. Micro-innovation can be extraordinarily powerful.

So how best to micro-innovate? Let’s take a closer look at what gets in the way of doing it and how you can harness your power.

Micro-Innovation Killer #1: To-Do Lists, Tunnel Vision, No Vision

A typical day: Most of us create a to-do list and strike items as we finish them. I know I personally feel a sense of completion and satisfaction when I click my task off my calendar. To-do items can become so ingrained in our routine. At its worst, checking off items becomes mindless, and we don’t even think about it. When that happens, our to-do lists have more meaning than the tasks themselves. Over time, the work loses significance, and we question why we do the things we do in the first place. Our perspective narrows and our thinking becomes siloed.

Purpose? Process improvement? Innovation? Forget about them because we’re so focused on completing a task—even if the task no longer serves a need. It’s easy to have tunnel vision and wear self-created blinders. And to be fair, we must make so many decisions in our personal life, it’s easy to turn it off at work. But, when our work is filled with tasks, we lose sight of our larger goals.

Micro-Innovation Killer #2: Fear Kills Creativity

Recently, I was speaking to one of my peers, a manager of individual contributors. She manages the leadership development at a large company and was making some updates to a program. She had asked one of her people for their honest opinion, wondering what they might change and how they might improve it. She loved the suggestions and wondered why the person didn’t share these great ideas sooner. The answer was disarming. The individual assumed that the choices were made for a reason and who was she to question those choices. She did not feel empowered to share her fresh perspective; there was no psychologically safe space to share her opinions.

How many people remain silent because of a fear? The majority. In fact, McKinsey found that just 26% of leaders create psychological safety for their teams. Where there is fear, there is little innovation.

Five Tips for Micro-Innovating

Innovation is one of those words that can be intimidating. But it’s inherent in our nature—or else we’d still be living as hunter-gatherers. We are attempting to improve our lives every day and innovate in the smallest ways. Whether it’s preparing meals on a Sunday before a busy work week, optimizing schedules with a planner app, using Microsoft Teams or Slack instead of email, we are always trying to improve our status quo.

Here are five tips to ignite your creative spark and start micro-innovating.

1. Give others permission to speak: Those ubiquitous “If you see something, say something” signs in the airport are relevant for innovating. A leader’s job is to make sure their people feel safe to say, “This task doesn’t feel helpful to what we are trying to achieve. I’d like to understand more about the importance of the task to the overall process—what do you see that perhaps I’m missing?” 

Don’t expect your people to have an answer at the ready—and be clear that it’s okay they don’t have one. Pointing to areas of improvement is NOT complaining! They may not know how to fix the situation, but they have at least diagnosed that something needs improvement. They have ‘seen something and said something.’ And that can short-circuit a potential problem before it becomes a monumental one.

2. Ensure systems exist for people: Processes are supposed to streamline tasks, but often they become workplace handcuffs. When a process creates unnecessary administration or you get hints of malicious compliance, it’s time to rethink the process and suggest ways to streamline. Ask yourself these questions: “What are we trying to solve with this process? Are these actions having the desired impact on the experience we want to achieve? Does the system support us and the customer or slow us down?”

3. Always be learning: Innovation requires experimentation. This also means the willingness to fail. We learn through mistakes, bumps in the road, misalignments. It’s where we improve how we work together and how we meet the needs of our customers/business. The words of Thomas Edison, on the painstaking task of inventing the lightbulb, are a good reminder: “I have not failed. I’ve just found 10,000 ways that won’t work.” 

You can speed innovation by having a learning mindset. Ask your people: “What do you see that I’m missing?” Then remember the iPhone and how it was an iterative invention driven by thousands of people. It takes time and patience. So be easy with your people and yourself.

4. Adopt the right mindset: Throw away your preconceived notions about innovation and focus on fostering a culture of innovation for yourself and your team. Be mindful of your emotional reactions and others by pausing before you respond. Be curious and open-minded and you will bring in multiple perspectives. Have courage to push through your fear of failure. Be resilient to overcome challenges you will face while converging and diverging along the innovation process.

5. Take needed downtime: Ever take a shower and a great idea comes while you’re shampooing your hair? Ever wake up in the middle of the night with a “eureka” moment? The brain needs downtime. When it gets a break, it can make new connections and serve up inspirations. So instead of relentlessly hammering away at the task, take a purposeful break. See what brilliant ideas spontaneously arise.

Micro-innovation is something for the ambitious and courageous. It requires the willingness to be wrong; to fail; to be resilient. All this can be humbling. And it likely will undermine your self-confidence at times. But what’s the alternative? Doing the same old thing over and over—even if it’s no longer useful.

Ready to rally your self-confidence, resilience, and fearlessness to create a small revolution?

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