MANAGEMENT: Hard decisions require strong leadership

July 30, 2007

I am struggling Q: with a major organizational change. I believe it will be beneficial in the long run, but implementing this change will cause considerable turmoil. How do I know if this is the right step for my company?

The only way

A:to know for sure is to make the change and then assess the result. A good business-planning process that forecasts how the changes will affect the company should be done beforehand, but no matter how good the plan, there will be unforeseen implications that will require you to react and adjust.

The question you are really asking is whether the risk associated with your decision ultimately will be justified by the result. Every company owner confronts a similar situation when the status quo is changed.

At some point almost all growing businesses are likely to face one or more of these issues: Do I move from my present location into a bigger facility? Do I demote or fire someone who has been with me since the beginning because he doesn't have the skills needed as the business expands? Do I hire someone with greater skill and talent to fill a key position? Do I fire a major customer because of its overwhelming impact on my business? Do I go after a new, large client whose revenues will push the company forward but will change how we do business? Do I eliminate or take on a new product line? Do I open a new location or close an old one? Do I lead my industry and/or markets in changing? Do I change direction now when we are producing strong financial results because my gut is telling me our current course won't produce future results?

Do I expand through acquisition?

These are the decisions that you as the leader of your company must make. But first you should ask yourself what type of leader you aspire to be.

Bold leaders will jump off the cliff and move aggressively to make major decisions. If they have a well-thought-out plan, they will land on their feet and are often significantly rewarded for making the bold move.

I can point to numerous examples of businesses that have moved from the comfort of their existing facilities into larger and more costly buildings that have found efficiencies, the ability to serve more customers and a renewed spirit throughout their organizations. Likewise, I can point to companies that have hired external talent whose knowledge, experience and perspective have moved their new employer forward. I also know of companies that have determined all business isn't good business and have severed long-term client relationships. In hindsight, the question becomes "why didn't we do this sooner"?

Moderate leaders like to accumulate as much information as possible before implementing a decision. They tend to tinker with changes on the periphery of the business, getting some positive results but not at the level achieved by a bold leader. Their progress is very measured, but they also deal with less upheaval in their companies. They are comfortable with this outcome-stability being an important motivator.

Passive leaders have a gnawing feeling in their gut that the industry/market is changing, but no amount of information is enough to spark change. They either don't know what to do or are immobilized to do it. They hope things will return to the way they were in the past. In many cases their businesses will remain small, or shrink until they fail.

Hard decisions require leadership. Provide it or not at your peril.

Clegg is president of CEO Partners, a consulting firm serving owner-managed businesses. He can be reached at 450-0262; dclegg@ceopartners.net.
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