Leadership for delivering growth
Tim is a member of the Interim Partners Manufacturing Advisory Board. He has enjoyed an impressive career in the Aerospace, Defence and Transportation industry, from being a graduate trainee at Rolls Royce to leading the transformation of a 150-year-old UK manufacturing business through to receiving the Fastest Growing SME award by UK Chamber of Commerce.
Tim shares with Karen his recipe for delivering growth.
In my experience, Business Transformation occurs when there is alignment and conviction at Board level to back the CEO; but to actually deliver rapid growth (greater than 25% per year), the CEO needs to adopt a fully inclusive leadership style to create an environment for all employees to succeed – one where they feel and are empowered.
There is a variety of leadership styles with many requiring the leader to demonstrate a hands-on approach, making decisive changes and leading from the front. Very much an approach of “follow me, everyone”. All useful characteristics in a start-up, turnaround situation or where the business has lost confidence in its abilities. However, the type of leadership needed for a business undergoing rapid growth is different. Why is it so rare, and is it the reason there are so few UK businesses experiencing rampant growth?
To achieve rapid growth the business very often must reposition itself from markets or product ranges which have historically served it well. But to get to the ‘promised land’ they need to ‘let go’ of the past and take a leap of faith. Taking such steps and at pace requires exceptional leadership not just from the CEO but from the Board – creating a vision for a sustainable and profitable future.
Managing the vision and finances to cross such a transformational chasm can be challenging. Was it not “visible” to the traditional retailers and their financiers, that internet shopping was going to reach a tipping point? Did the leaders consider that by heavily leveraging their businesses, they would negatively impact the agility of the business to manage change direction and invest in seamless distribution systems and brand promotion, so essential for a new internet operation?
To enable such a degree of change, a new technology or process, or a number of small alterations, are often required. The challenge with developing latest technologies or embracing new process is that it takes cash and time, may not provide a return on investment for many years – something that shareholders may struggle with if they are not fully aligned to delivering a sustainable ‘growth path’ for the business.
It was recently reported on Wake up to Money that CBI chief economist Rain Newton-Smith said the pace of investment by companies was subdued but it was a "tale of two halves".
"Businesses are investing in new technology, there's a whole wave of digitisation, of artificial intelligence, of robotics. It's really transforming some parts of manufacturing. But the other thing that businesses are telling us is that there's still a lot of uncertainty out there and if you're trying to make long term decisions that span out over 5 - 10 years, we still don't have enough clarity on our future relationship with the EU and if you're involved in logistics or trade across the continent, it just makes it much harder to make those big decisions".
Global events certainly make decisions harder but perhaps we are seeing two groups of leaders or investors.
- One group is grasping change, investing in a future that puts them in control of their own destiny, taking on the added burden of managing the formation and introduction of new technologies. Crossing the chasm of Transformation to a sustainable future.
- The second group look for reasons to stay where they are; fearful of crossing the chasm into unchartered waters with unproven markets, products or people.
The first group will be market leaders, establishing pricing levels and enjoying a higher margin as new market entrants - or even market definers - and in turn creating significant shareholder value. Whilst the second group will become market followers, awaiting for the right time.
Leadership for delivering growth is very different to other styles of leadership. The leader is required to put others first, to create an environment for others to succeed whilst continually reinforcing and sharing the vision. Being patient and allowing others to truly understand the problem before them, so they can explore solutions and execute them in their own manner; this is not easy for many leaders who are under pressure to demonstrate improvement – often in the short term.
The balance between providing the space for the team to take responsibility and accountability versus a leader stepping in, is largely defined by the degree of empowerment the team leaders take. Empowerment is not a gift from senior management; creating the environment to enable others to take empowerment is true leadership for growth.
One simple example I have seen was a situation where four operatives were waiting, being unproductive, as they shared a single pair of scissors between five people. Management had failed to observe or listen to the frustrations, recognised by the team, or had even believed they were helping cash flow by not spending.
The simple answer from the team leader was to buy four more pairs of scissors; however, the correct answer was to buy nice additional pairs so five pairs could be at the sharpeners, whilst five pairs were in operation. By working with the operators and listening to their challenges a systemic solution was executed resulting in higher productivity, greater output and a better cleanly cut product.
Long-term sustainable benefits come from behavioural and cultural change. By sharing your lessons of success and failure you can encourage the team to explore and ‘try’ new methods. Perhaps the hardest is watching others try something that you know will fail but the team need to learn that lesson for themselves. Finding the words to nudge or guide the team in a different direction without stepping on their toes is perhaps a skill to be practised more.
After all, allowing your employees the freedom, flexibility and power to make decisions and to work autonomously has been proven to create more energised, capable and determined individuals, resulting in a successful business for the long term. Surely, that is our greatest achievement as business leaders.
Karen Wightman is a Senior Consultant of Manufacturing & Engineering at Interim Partners.