One of the five core areas of building a sustainable business is where you become operationally irrelevant in your business.  One of the skills that is necessary for this to happen is to be at least, if not a great leader.

Last week, I released a podcast with Hans Finzel which is right on point.  Hans is a leadership expert, and I thought his comments on leadership is something everyone should hear.  If you want to spend a valuable 21 minutes, click here to listen to this podcast episode.

Why is leadership important for operational irrelevance

Operational irrelevance means you’re out of the day-to-day operation of your business.  It says that you won’t be doing things you used to do.  Instead of doing the job yourself, you’re going to be working through others.  The more you get out of the day-to-day, the more valuable your business becomes.

Your business not only becomes more valuable when it comes time to sell, but it also becomes more valuable while you’re still running your business.  If you no longer have to worry about what happens on a regular basis, you now have time to not only think strategically but act strategically as well.  Doesn’t that sound like a good idea to you?

What do leaders naturally do that you’ll need to learn

Natural leaders are great at building trust among those who follow them.  I find that building trust often is a challenge for business owners.  Could this be a challenge you have?

If you don’t have a problem with trust, you still want to check out the trust formula.  Make sure you pay attention to what the four areas are and if you find people aren’t following you, look to see what part of the trust formula is out of whack in your life.

Even if you’re a great leader, you will find times when things are not working as you want.  When things aren’t working out well is where I want you to move towards the trust formula and figure out what you need to fix.

Here’s an exercise I want you to do.  I want you to list five times you felt that you weren’t trusted and then overlay the situation on the trust formula.  You’ll start to see where things went wrong and you’ll then be able to figure out what you should have done differently.  And, you can even email me and let me know what you find.

Do you want to be a leader or a manager?

If you’re a manager, you might also be called on to be a leader.  If you’re a leader, there’s a good chance that your also a manager.  So, for me, the answer is both.

At the same time, not all managers are leaders.  In fact, I would say that a relatively small proportion of managers are leaders.  To efficiently get out of the way and become a passive owner, you need to not only be a great manager, but you also have be an effective leader.

I want you to think about the times that you’re just a manager and understand what you could have done differently to be a leader.  The time you spend doing this will be more than worth your while.

Do you have to have position power to be a leader?

You would think that if you own your company you would automatically be a leader.  That might be true, and at the same time, I find more organizations are leaderless.  It’s not because their owners don’t want to be leaders, it’s because they don’t know how.

The truth is leadership has very little to do with formal leadership.  In the podcast episode with Hans, we talked about what I call leading from the back.  Some people also call this servant leadership.

Leading from the back means that you don’t have formal authority in the group, but through the power of questions or the moral authority you bring you are leading the team.  I like leading in this manner.  It allows me to focus on what we should be doing versus what the agenda says we’re going to do.

What about you, do you like formal leadership or do you want to lead from the back?

What you should do now.

Here’s what I want you to do now.

  • Go to the webpage that has the trust formula, study and memorize the formula.
  • List five relationships where you have lots of trust, look at the trust formula to figure out why you are trusted and trust the other person.
  • List five times you felt that trust was out of whack.  The lack of trust could be you not having trust, or you not trusting someone else.  Put the situation in the trust formula and see what part didn’t work.  (Hint: it’s often a self-interest issue.)
  • Look at your management style and see how much compliance you’re getting with things you delegate.  If your answer is not much, you could have a leadership issue that you need to fix.
  • If you don’t believe you’re a great leader, find some good books to read on leadership.  One of my favorites is The Five Dysfunctions of a Team where you’ll learn some good tips on how to become a great leader.
  • Think about what the difference between a manager and a leader is.  Spend some time writing down the contrast and compare that list to your behavior.  You might not like the results, but you will learn a lot.

Let me know what you think about leadership in the comments below.

Topics: Creating Value, leadership, trust, Sustainable Business, operational irrelevance

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