Leadership

What Makes a Good Leader?

Not everyone is made to be a leader... there are leaders and then there are followers. What makes a good leader? Leaders come from all walks of life, economic background and from either gender. Leadership does not discriminate. Some people are natural leaders; they are born with the characteristics and qualities it takes to be a good leader. Some individuals develop into good leaders. They draw on their personal lives, the experiences in the workforce or from others they have chosen to emulate because of their leadership style. Everyone will be challenged to be a good leader at some point in their lifetimes. Unfortunately, many of these individuals will fail or never reach the level of respect as a leader because they lack the right skills to demonstrate good leadership; they lack sufficient experience, the ability to learn to be a good leader or the desire to work with others effectively and efficiently. Leaders need to be able to influence, persuade, stimulate, and inspire others to perform tasks with little or no question and without regard for their own self-interest; the result is the goal of the organization. Leaders, like companies, can perform well until a certain level. An individual needs to understand their own limitations and be able to relinquish the authority when their skills are not sufficient to complete the task at hand. This paper will analyze three situations where organizations have faltered under power leadership and recommendations on how the situation could have changed.

Scenario #1

A research and consulting firm, worth between $125M and $150M with approximately 500 employees, had just announced that they are going to grow 20% a year for the next 5 years and increase their stock price to over $100 per share. The company conducts business in the information technology sector providing information pertaining to technology so an organization can make strategic business decisions.

The company had been doing quite well, approaching the critical $150M mark and the board of directors wanted to continue with the same people at the helm. The idea sounded great to everyone from the presidents all the way down to the administrative assistants. The company did what many other companies do when they want to grow, they expand. The company bought the consulting part of a smaller research and consulting company. This added sixty employees, two offices in opposite sides of the country, and a number of virtual offices throughout the United States. It also started to hire other consultants who were experts within the IT field to bolster its ranks. It also formed partnerships with small niche consulting firms where it did not have expertise or was quite thin. The company maintained course and appeared to be doing exactly what it set out to do; the company was riding the wave of the Dot.com boom. Small internet companies were popping up by the hundreds every day and they all needed help bring their product or service to market.

The company grew the projected 20% the first year, the company continued to look for opportunities to add to its impressive number of consultants. It was gaining traction on the number one company in the market; but then the wheels started to come off. Many of the startup internet companies were failing to attract business. The venture capitalist whom provided the money to these startups were calling for their money; the dot.com bubble was on the verge of bursting. The company's stock price, which started around $30 per share, never went up; it took a nose dive and dropped into the single digits. The company started missing its numbers. Employees became apprehensive; wanting to know what was going on. A steady stream of influential employees began finding jobs with firms that held more promising futures. The company had to lay off more than one hundred employees, primarily from its consulting side of the business, when it could not find business. It dissolved its partnerships with the small consulting companies and closed offices in smaller markets. The company eventually sold out to its chief competitor at a considerably reduced rate.

Analysis #1

Granted, the leadership was not solely at fault for this company's demise. No one predicted the dot.com bubble bursting so quickly, although there were subtle signs it would not last. This was not an isolated event in the late '90's, many companies suffered the same fate, but many of them could have been avoided. The leadership within this company in particular could have handled the situation much differently. The company saw an opportunity to make money and it did not want to be left behind when everyone else was making money. The leadership seemed somewhat over zealous in its pursuit of the bottom line. They failed to listen to their own experts "to apply the brakes and proceed with caution".

The other issue was the skills of the leadership, the CEO, which was also the owner of the company, was not the right person to take the company to the next level. He did not have the expertise to take the company past the $150M mark. He had an entrepreneur-type mentality which can be a hindrance when trying to run the day-to-day operations of a multi-million dollar company.

Scenario #2

A small web-based market research firm, consisting of 15 employees is looking to grow the company; increasing its market presence. The company had been in existence for ten years and had done well. It had grown from the attic of the owner's house to establish offices in a rented garage to a suite of offices above a strip mall in a medium-sized city. It was worth around $1.2 M, but the two owners wanted to grow the company. They wanted to reach the $2M within sixteen months and $3M within 3 years; ambitious, but not unreasonable.

The owners were really interested in their employees, rewarding them with monthly lunch retreats and bringing in a consulting company to explore ways to further develop employee loyalty and longevity. On the surface, the leadership within this company appears very good. They have vision, they are doing things for their employees, and they have the dedication. The problem they had was they had no idea how to take it to the next level.

The employers were approached with ideas on how to increase business. It was proposed that they start actively selling and marketing their company. They shook their heads and said it was a great idea. They even had a qualified employee willing to take on the role of selling and marketing, but they never pursued it. The year came and went. The owners became less friendly toward