For as long as I have participated in organizations, I have heard some variation of the adage, "Leaders are born, not made," or the contra position, "Leaders are made, not born." I suspect that both concepts are true. Individuals who have an innate sense of responsibility and a drive to succeed will usually not leave the steering to others when there is a feeling that the group, the business, or the family is drifting off course. We often do not notice those leadership traits until confronted with a crisis, a difficult decision, or an urgent circumstance. It is fair to say that all three of these conditions exist in the advisory world today.
The drop in net worth and client confidence, with no obvious way out, presents us with crisis. The decline in revenue, profits and income presents us with many confounding decisions. This combination of negative pressures forces us to act decisively and with a sense of urgency so that our business, our client relationships, and our personal wellbeing are preserved.
So, who will rise to the occasion? It is common for people to confuse ownership and leadership. Many even confuse management and leadership. Leadership is a trait, whereas ownership and management are states of being. Some lead by position–CEO or owner–others lead by persuasion, with clear direction, conviction, communication, and inspiration.
Those who lead by position use leverage and title to achieve their goals; but often this style does not result in an enduring achievement. Those who lead by persuasion are focused on creating a culture of commitment to the shared goals. Why is this important? Because the essence of an organizational culture is what people will do when you are not looking.
As advisory firms become larger and span of control becomes more strained, they often do not have enough formal leadership positions available for people to occupy. This void is when we find followers emerging as leaders in their own right.
What defines a leader? There are seven characteristics that I consistently find in the people I have come to regard as leaders:
1. Vision
2. Decisiveness
3. Focused on results
4. Ability to delegate
5. Ability to develop people
6. Empathy
7. Managing risk
Vision
Many years ago, I was in Alaska during the time of the annual Iditarod Trail Sled Dog Race. A local I had come to know liked to say that the view only changed for the lead dog. That metaphor for business leadership has always stayed with me.
Individuals with vision have a plan–a picture of what success will look like. This framework allows them to think more clearly about the resources needed and where the pieces will fit into place. Much like the box cover of a jigsaw puzzle, when you see the final outcome, you can begin to coordinate the itty-bitty pieces into a successful result.
In the advisory business, I find that there are two predominant ways that practitioners think: strategic vs. tactical, or conceptual vs. linear. Both approaches for developing an outcome are critical and complementary, but also tend to present interesting conflicts. The linear or tactical thinker will try to ask the question, "How do I get there more efficiently?" The conceptual or strategic thinker will try to answer the question, "Am I heading in the right direction?" One thing is certain: if you are heading in the wrong direction, you do not want to get there more efficiently.
There is a compelling book written by Daniel H. Pink entitled "A Whole New Mind: Why Right-Brainers Will Rule the Future." The author argues that we are entering a conceptual age, where linear-type processes like accounting and computer programming are being outsourced because it is a more commoditized function. Pink says that the truly valuable people going forward will be designers, inventors, and storytellers–individuals who draw on creative strengths. Management trends indicate that he may be onto something. We have experienced the outcome of an era in which major businesses have been run by accountants, investment bankers, and programmers. Are shareholders wholly satisfied with that outcome?
So who in your organization consistently demonstrates conceptual strength and an ability to envision an outcome that others can rally around? Are you tapping into your own creative abilities to set the right direction for your enterprise?
Decisiveness
At a recent conference for financial advisors, I posed the question, "Who feels that you acted quickly enough amidst the market meltdown?" Very few raised their hands. That is nothing to be ashamed about because it would have been difficult to predict that the events surrounding Bear Stearns, Lehman Brothers, auction rate securities, Bernie Madoff, and TARP would have become a part of our weekly routine, let alone individual defining moments that impacted our business.
But in the aftermath, how did we handle the crises and act to mitigate the damage? Much like the U.S. Airways pilot who landed his plane in the Hudson River without losing a single passenger, we could have done nothing to stop the market disaster. However, we could have acted to limit the damage. Pilots are trained to override their fears, their natural tendencies, and take action that at times may be counterintuitive. In business, certain individuals demonstrate that same trait by quickly gathering facts, considering points of view, and acting decisively, even when they do not have consensus or unanimity of opinion.
