Every corporate leader has three major tasks; growing the business by increasing profitability, making the business more sustainable and raising great successors who will transcend the leader’s accomplishment. Failure in leadership is usually linked to either inability to recognize these tasks for what they are or a disregard for one or more of the tasks. A leader who strives to excel in the three usually ends up as a great one while those who manage to do well in one or two end up as mediocre or average leaders.
How leaders increase profitability
There is no pretence about this; every business exists to make profit. A business has to make profit to remain a going concern. A business has to be profitable to make the investment of the owners worth their while. A business has to be profitable to attract and retain good hands. So, a business that does not make profit already has its future determined; it will go under. Therefore, one of the key functions of corporate leaders is to run their organizations profitably.
To increase a company’s profitability will involve doing the following.
Increase the value of product or service
Clients and customers are not engaged in charity, so they do not release their money because they like the purveyor of a product or service. Rather, they part with their money because of the value they expect in return. Therefore, increasing profitability has to do with increasing value delivered by a product or service to its users which results in increased patronage. So, increasing the value delivered to customers is sine qua non to increasing profitability.
Many companies that witness consistent decline in patronage find themselves in that box because those who manage such organizations do not take cognizance of the fact that they have to keep raising the bar of value delivered by their products. Every brand makes a promise to the customer; that is what the buyer pays for. But the promise does not have to be stagnant. If the promise is stagnant, buyers are likely to leave the product because there will always be other products that would promise more and do more. As observed by Aaron Levie, CEO of Box, “Products evolve because of assumptions that eventually become outdated. This is every incumbent’s weakness and start-ups’ opportunity.”
Every great idea tends to become outdated at a point; it is the duty of the leader to ensure that the idea stays updated so that it can continue to be relevant in the market place.
Do more than expected for the customers
The staying power of every business is the customer. To remain a profitable business, every business must not only retain its core customers, it must also bring in more into the fold. The way to ensure this is to do more for the customers than they expect. If customers’ expectations are surpassed, they respond with increased patronage and that will increase the profitability of the business.
Before the advent of Globacom on the Nigerian telecommunication scene, the singsong then was that it was impossible for telecoms subscribers to have per second billing. Then callers had to pay for a whole minute even if their calls lasted only three seconds. But when Globacom started operation, it introduced per second billing and that gave the new entrant a huge leap.
Exceeding the customers’ expectations has never failed to yield result.
Make life easier for the customers
What customers want the most is convenience. They pay for products that will bring ease to them. Therefore, to be on the path of unending profitability, a company must make making life easy for its customers its priority. Making life easy for customers entails leveraging technology to improve service delivery. A company that would not be left behind by the customers must be at the forefront of deploying technology to improve its products and services to the delight of the customers.
Break into new frontiers
Companies that have remained relevant over the years are those that never pass up opportunities. One of the most fundamental responsibilities of corporate leaders is to identify new opportunities which they can latch on to. Leaders must always be on the lookout for new trends. One of the factors that separate great leadership from ordinary ones is the ability to smell opportunities years away. New trends are always emerging but some leaders do not get to know these until they become obvious. But to make a company consistently profitable, those who run it must be observant enough to identify new trends and smart enough to seize the opportunities offered by these before they become common knowledge.
How leaders build sustainable organizations
Every sustainable business is a product of an entrenched culture. Good culture defines great companies. The more entrenched a culture is, the stronger a company is. Culture defines the character of an organization and delineates its boundary. A company without character is headed for disaster because it will be an organization where anything goes, an organization where wrongs means are justified by good ends. In an organization with well-defined culture, there are no unpleasant surprises because everyone knows what to expect in a given situation. The leaders as well as team members know the boundaries the organization would not cross no matter what is involved. This determines what those who work for the organization can do to get result.
Building good organizational culture involves the following.
Inculcate the culture of integrity
Organizations that are in a hurry to record success are not usually bothered about integrity, they are more interested in results that in the process. This is why they do not last. In Nigeria, many companies have become history because they were not founded on any moral principles. The motivation of the promoters of such companies was profit so they did all they could to make money. But companies that are meant to last cannot trifle with integrity because when everything else fails, integrity will stand because it is the glue that holds together all the factors of success. So, to build a sustainable business, the leaders must embrace integrity. The leaders must insist on everyone in the organization doing what is right at all times. Integrity is not doing what is right when it is convenient or when there are observers; it is doing what is right at all times irrespective of the cost to the organization or the individuals involved. Organizations that have integrity as their culture will not think twice about losing a multi-billion Naira contract if the process will get them compromised.
Inculcate the culture of excellence
Excellence is the quality of not going below set standards. A company that is built on the culture of quality never gives less than its best. It never gives its customers less than it promised them. More often than not, in an organization where the culture of excellence is entrenched, set standards are surpassed. In such organizations, excellence is so ingrained that the people cannot do less than that. It is a company-wide phenomenon. It is not something that the people do when they feel like or when they are ‘motivated’. It is their way of life. That is why it is a culture.
Inculcate the culture of transparency
In sustainable organizations, there are only white or black and not a shade of either. In such organizations, issues are not shrouded in secrecy. Everyone knows that there is fairness and justice, so there is no point hiding behind a finger or playing the ostrich. Issues are discussed openly without fear or favour. As a result of the transparent disposition of the organization, when there are challenges, the people bond together to attack the threats. This is why such organizations are sustainable, they are so united that it is difficult for trying times to floor them.
Communicating shared values
Shared values are always communicated in sustainable organizations. The essence of this is to put everyone on the same page and leave no one in doubt about what the organization stands for. Because the shared values are communicated, there is no room for slips and the organization’s positions are respected even by those affected when the need arises to take hard decisions.
How leaders raise great successors
A leader cannot be regarded as successful until he raises great successors. No leader occupies a position in perpetuity but what he stands for; his vision and views can live forever. For a leader to maintain his relevance after the expiration of his tenure, he must be able to produce successors that will build on what he has done to achieve more. This is a very critical aspect of a leader’s functions because the stride of a company is a function of the strength and character of those who run it. How far a company will go is largely determined by the quality of its leadership.
Raising great successors involve the following.
Create a hunger for learning in them
Times change, tastes change and people change. This is probably the most difficult challenge that leaders have to contend with. Companies lose their winning edge when they miss out on the changing times and tastes. So, a leader must create a hunger for learning in his likely successors such that they are able to discern the times ahead of time. Leaders may be pardoned for other slips but not the ones that have to do with reading the trend and interpreting them. Companies that became victims of disruptive technologies are those run by leaders who were unable to discern when the preferences of the market were changing. Subsequently, they ran their companies into problems because of this. So, a leader who wants to make a success of his career must be able to raise other leaders who will not only be able to read the times but also interpret the times and the peoples’ cravings correctly.
Encourage leaders with different views
Some leaders like people who are like them. They want people who think and act like them. While that is not entirely bad, it is better if leaders will encourage their subordinates to develop the ability to think differently. There is not a single way to solve a problem. When there is a plethora of ideas, it is easier to make the right choice than when options are limited. This is important because one of the most important functions of leaders is to think. A leader must be able to think strategically, laterally and creatively. If leaders are encouraged to think differently from what is popular, then they are able to solve problems that are not common.
Create relationship beyond work
For a leader to be able to mentor his successors properly he must be able to establish with them a relationship that goes beyond the office hours. The essence of this is for him to know them well enough to know whether they have really imbibed the corporate culture and value or they are just pretending to get what they want. Knowing them well enough to be able to determine this will require a relationship that transcends the office hours.
Last line
Great leaders know that not only must they run a profitable organization; they must also entrench a system that makes the organization sustainable and raise leaders who will be better than they are.
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