Leadership vital for small businesses
Entrepreneurs do not have it easy managing their business. Aside from balancing profit and loss, they play the role of leader to guide staff members in the right direction.
In today’s world, it is daunting to manage staff of different ages and backgrounds while coaxing them to perform at their best. It is up to entrepreneurs themselves to be influential in decision-making while creating a highly effective organisation with a positive corporate culture.
The Harvard Business School’s Boris Groysberg tells FocusM
investing in people and business growth go hand-in-hand in the early stages of the business.
“There will be a time entrepreneurs will be faced with questions such as how do you scale the business? When do you surround yourself with people who can actually take your vision and make it a reality?”
Based on his research, small businesses take affirmative action to create an effective business culture too late into the business cycle, as they go through growing pains.
Groysberg, in Malaysia recently for a three-day workshop on leadership and entrepreneurs, is no stranger to management as he is professor of business administration at the Organisational Behaviour unit at Harvard. Before joining the faculty, he worked with top multinationals such as IBM.
His research revolves around the challenges of managing human capital at small and large organisations around the world. His work looks at how companies achieve sustainability and a competitive advantage by engaging employees in the implementation of business strategy.
People and profit
With growth comes risks and managing both requires tact from an entrepreneur, who needs to avoid becoming a cult figure. “You can run out of money or people who can move your business forward. So instead of creating a corporate culture, they go on creating cults,” explains Groysberg.
Cults formed in an organisation, he says, tend to be highly dependent on the entrepreneur and when that person is gone, the organisation folds.
“If you look at some of the companies that started small, such as Southwest Airlines, they were started by passionate and charismatic people. What they were able to do is move from cults to a high-performing culture.
“That is one of the biggest issues small companies face ... when you create a culture, you become more scaleable,” says Groysberg.
More often than not, entrepreneurs overlook the need to nurture talent in an organisation and focus too much on corporate strategies and systems. “Only a few of them spend significant amounts of time thinking about the right culture or the right set of practices they should have in a company.
“When you stumble onto this concept in your business much later, you catch yourself taking five to 10 years wanting to change something that does not work for your company.”
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