"People don't leave jobs, they leave bosses", or so the saying goes. It also costs £3,000 to hire an employee. So being a good leader, and working for a good leader, is important in ensuring that the company attracts and retains great people.
Similarly, being a bad leader will cause people to leave and result in a poor reputation for your business and a high, expensive, turnover.
So what does effective leadership look like?
Devolution Frameworks
Key to any leadership, or managerial, position at a company is setting up frameworks. Specifically, clear frameworks that devolve responsibility to the employees. Otherwise, you create a bottle neck which is counterproductive for the business and frustrating for staff.
You hire someone to do a job, you should get out of the way and let them do it!
Too often there is ambiguity at companies due to lack of clear frameworks. Meetings upon meetings are held to clarify the ambiguity, which wastes valuable time.
The framework needs to clearly set out what each employee / department can and can't do without sign-off and from whom. Once that framework has been established, it is important to take step back, and then let them get on with it. This will increase the pace of the company, which is an essential metric to monitor innovation and growth. If the founder or others in senior management has to sign off on all output, not only will this delay everything, but senior management will be burdened with the small, trivial, every day matters instead of focussing on the big picture. A further knock on effect is that the burden on senior management will be greater, causing stress and potentially burn out.
When it comes to deciding what should be devolved to other colleagues and what shouldn't, there are a few factors that you can consider:
What drains your energy whilst working? Look to have someone else do these tasks, ideally someone who gains energy from them.
What are the big questions that your company is looking to answer? Keep final sign off on these major decisions, but perhaps look to have others do a lot of the work leading up to the sign-off.
What aspects should be devolved in order to scale? It's not realistic for one person to handle all sales or all support interactions, so these functions should be devolved when you hit a certain size.
Keep focussed on what gives you energy and what drains your energy, and delegate accordingly.
Efficient Decision Making
Whilst a leader needs to know what to devolve and to whom, they also need to know when to step up to the plate and make a decision.
In fact, the best leaders I have worked for made quick decisions and do not act as bottlenecks. They set aside personal egos and ensure that the route to a yes/no decision is clear, simple, and fast. Sure, this may not be the case for a monumental decisions like whether the company should merge or make an acquisition, or whether company-wide restructuring is necessary, but I would say over 95% of decisions made by a leader can and should be made quickly.
Contrast that with a company where decision-making is lethargic and egos get in the way. This lethargic company will crawl towards their goals and likely frustrate the people submitting proposals, as it restricts their progress and personal growth.
As a company scales, the decision making powers should waterfall down the organisation, in line with the devolution framework above. If you hire a Head of Marketing, let them call the shots on the marketing budget and strategy, otherwise you may as well hire a more junior marketer and save a fair bit of money. It's important that the founders continue a culture of quick decision making in the managers they bring in. Oftentimes big corporates need 10 meetings and 5 mass email chains to get simple things done. It's a mistake for a startup or scale-up to believe they need to do the same, as it's burning cash (time is money!).
Strategy
Another key pillar to the role of a great leader is to be clear with the strategy. It's easy for people to get distracted by shiny object syndrome, and stretch the company's resources and attention too thin as a result of spinning too many plates. A great leader can ensure that focus is intentional and directional towards the ultimate goal.
As alluded to previously, it's important to keep an eye on energy whilst at work, both individually and collectively, as you want to maximise energy spent on important activities that can move the needle in bringing the strategic goals to fruition.
In line with this, a tactic you can use is to consider the opportunity cost of each and every decision. Someone proposes you put some spend behind a certain marketing campaign? What's the next best option? This will then bring key decisions to the forefront in an efficient and commercial manner, letting the team discuss and decide the best option to choose, in line with the wider strategy.
An effective leader is navigating the boat, ensuring that it is progressing in the right direction, as efficiently as possible
Parting Shot
Being an effective leader and promoting effective leadership amongst managers at your company is incredibly important as it retains talent and helps with strategic progress.
Every time you encounter a situation of ambiguity and/or a painful decision making process, try to work out what went wrong and how you can rectify that going forward.