Invariably, in a business coaching session with a business owner, we talk about the employees who he/she manages. As most businesses grow, my client is compelled to either promote one of his or her own people to a manager; or try to hire a manager outside of his or her company.
As you might imagine, most business owners want to promote their own employees into management positions. In some cases, they promote their employees who then fail in their new role as a leader. Why? Because they haven’t been trained.
In this blog post, I’ll outline the five transformations every worker must make to become a great leader. Until they make each one of these transitions successfully, they’ll fail when given a chance to lead.
Value of Leadership
When you're hired as a worker, you’re judged by your productivity, work ethic and the quality of your work output. It’s quite normal to develop the thought that workers are doing all the work and management is sitting around getting paid a lot of money to do nothing. This couldn’t be further from the truth. Let me illustrate what I mean by highlighting the earning power of three different sizes of business.
The small solopreneur will tell you that they struggle to make any money at all. They do their own sales and deliver service to their customers… often making less than $20,000 per year. Guess what, the solopreneur has no managers and manages no one. So, if the belief I just expressed is true, why isn’t their productivity through the roof?
Small business owners hire and manage their own employees, but still struggle to earn over $50,000 per year per employee.
In contrast, large businesses earn on average $270,000 per year per employee.
The uninformed will look at these numbers and think big businesses must be corrupt in some way. The truth is that the big businesses value and invest in leadership training and structured management. The value of a good leader is that they can produce up to10X the income from a team than what each team member can produce on their own.
Hopefully, you now believe in the Value of Leadership.
The second transition point is personality differences or personality conflicts. We all have different personalities… and they are all grand. Unfortunately, many new leaders have no clue how to manage personality conflicts.
There are four letters that make up the Myers-Briggs Personality Profile. The first letter is an I or an E for Introvert or Extrovert. The second letter is an S or an N for Sensate or Intuitive. The third letter is a T or an F for Thinker or Feeler. The fourth letter is a J or a P for Judger or Perceiver. I don’t want to get to deep into the Myers-Briggs system. You can learn a lot about yourself and others by better understanding your personality profile. My point in this podcast is that people within a team have a mix of these letters and personality profiles. All these personality profiles are highly valuable if you know how to communicate and leverage the strengths of each personality type.
A new leader often values their own style and devalues their opposite creating lopsided favoritism in their team. If they can understand the advantages of other personalities, they can adapt and communicate much better with their team. By leveraging these differences, they can start to create the value of leadership, that I just described.
The third transition point is the ability to build a high-performance team.
Let’s say that you’re a small restaurant owner. You have ten people working for you, five in the front-of-the-house (servers, hostess, etc.) and five in the kitchen (cooks, dish washers, etc.). You’re overwhelmed with managing all ten of these folks. You want to promote one of your kitchen staff to lead the kitchen employees and one of your front-of-the-house staff to manage the other five.
Let’s say that you pay each employee $10/hour. This means a total of $50/ hour for the front with your five employees: and $50/hour for the kitchen’s 5 employees. (Total Payroll = $100/hour). If you promote two of your employees to managers, you’ll have to pay your managers more and you’ll need to hire an additional staff member to backfill the work those mangers used to do as workers. If you pay your managers $15/hour, your total payroll will jump to $130/hour (a 30% increase). Not the kind of growth you were hoping for. Right?
You think you can increase productivity from your staff if your leaders can create the 10X productivity that we talked about in the Value of Leadership. Right?
While the productivity will ultimately happen, it won’t happen right away. There are four stages of team building: 1) Forming; 2) Storming; 3) Norming; and 4) Performing. You don’t achieve the higher productivity from a team until you reach the “performing” phase of that team.
Getting back to your restaurant. Let’s say that your restaurant earns $40,000 per month in revenue. Let’s say that it takes you a month to go through each stage of the team building process.
In the forming month, you will increase your payroll costs by 30%, and decrease revenue by 10%. This may mean a loss instead of a profit for this first month.
In the storming month, it gets worse. You still have the increase in costs of 30%, but your revenues drop by 30% because your customers are seeing the inconsistencies of your fighting staff.
In the norming phase, you get back to normal revenues, but are still seeing the 30% increase in staff costs.
Finally, when you get to your performing month, you are seeing a 50% increase in revenue with your 30% increase in staff costs.
Many business owners experience the pain of the first three stages and give up. They never get to experience the improvement in productivity from a high performing team. This team-building process is restarted every time a new employee is hired, or an experienced employee leaves your team. The good news is that each stage shouldn’t take a month, if your leader has been trained and can move his/her team quickly to the next stage.
Transitioning from Expert to Manager
The fourth transition point is having your expert workers transition to manager.
In unskilled companies, workers are often eager to take on more responsibility as managers or supervisors of staff. In skilled companies, the opposite is true. If you’re a dentist, you went to school a long time to learn the skill of dentistry and you make good money practicing your skill. If someone were to promote you to manage other dentists, you’d rightly resist. This is one of the reasons that skilled companies often grow as partnerships of multiple skilled professionals who continue to do most of the skilled work.
At some point, even skilled professionals must transition to a leadership model to continue to grow. To lead in a skill-driven business, the leader must:1) have knowledge of the skill being practiced; 2) can motivate the people they’ll manage; and 3) is willing to multiply their individual skill through the work of others. It’s this third item that is the obstacle for most skilled professionals.
I’m an engineer. While I’ve managed groups of salespeople, construction managers and other engineers, I’ve always considered myself an engineer. I love engineering. I knew that the engineers I hired had to become more proficient than me at engineering if our engineering firm was to grow. I switched from doing engineering, to creating engineering systems that supported my engineering staff. I then trained and empowered my employed engineers to continue the work I started. Ultimately, we created engineering systems that were several times more efficient than our competitors. We turned our engineering efficiency into corporate profits.
For me, this creation of a highly effective engineering firm was much more fulfilling than doing the individual work of engineering.
This transition must be made based on a personal desire to make a legacy change in the world that you can never accomplish on your own. If you don’t have this desire as a skilled professional, you should stick with your own practice.
The fifth transition point I want to cover is the notion of attitude or motivation.
If you have a poor attitude, it’s difficult to accomplish most things in life. Ironically, most people don’t know that they have a poor attitude. This not-knowing, dare I say “ignorance”, leads to damaging the people you lead.
Us Core Energy Coaches™ use a different term for attitude… we call it “energy”. I’ll quickly walk you through five different energy levels, or attitudes, I use as a Core Energy Coach™.
The first level is “victim”. In victim thinking, leaders think that they’re being sandwiched between customers and their employees. There’s no way out. With this attitude, you’ll complain about outside influences as excuses in why your team is failing.
The second level is “conflict”. In conflict thinking, you compete with other managers or other companies. You’ll fight with team members. You think your way is right way and the anything else is wrong.
The third level is “acceptance”. This is a very peaceful, but complacent place to be. You’ll avoid disciplining failing team members in attempts to keep the peace.
The fourth level is “compassion”. Your team members know that you care about them. In fact, you care about them so much, you may sacrifice the mission of your team for the care of individual team members.
The fifth level is “opportunity”. If you can stay at this level, you’ll be an awesome leader. In opportunity, you constantly reconcile differences. You look at conflict as opportunity. Your team will continue to engage and grow at this level.
There are two more levels, but I think you get the point.
Attitudes are not like personalities. A personality is a framework that you’ll have for the rest of your life. An attitude can change over time. The first two energy levels (victim and conflict) are damaging and are reactions to your environment. A leader cannot be a reactor. Instead, they must be a positive influence on the attitudes of their team members. The other three levels that I described are proactive. The higher energy level you possess, the more proactive of a leader you will be.
This attitude or energy is contagious and is necessary if you want to motivate your team members.
There you have it. The five transformations every worker must make to become a great leader:
Value of Leadership;
Expert to Manager; and
I hope this blog post helps you understand more about what it takes to be a great leader. I have created an online training system called Leadership Matters that trains each one of these principles.