The 7 Perspectives of Effective Leaders Perspective One

Current Reality in Leadership

• Definition: Understanding the business as it is today, including where it's headed and where it's been. Leaders must maintain a finger on the business's pulse.

• Key Metrics: Leaders should monitor key metrics across various categories:

  • Financials (cash flow, revenue, margins, etc.)
  • Supply chain (turn times, volume, diversity)
  • Execution (key initiatives)
  • Operations (efficiency, capacity)
  • Talent/People (performance, succession planning)
  • Culture (organizational health)
  • Externals (competition, economic factors, legislation)
  • Branding (impressions, position)
  • Customers (satisfaction, needs)

• Historical Context: Understanding the past is crucial. Leaders should conduct interviews with employees, examine historical metrics, and analyze past trends, decisions, and strategies to understand how they contributed to the current state. Similarly, understanding past culture is important too.

• Metrics Frequency: Review frequency varies based on business conditions (e.g., crisis vs. stable periods). Successful leaders have a rhythm for review even during stable times, which include weekly or monthly monitoring.

• Importance of Transparency: Current Reality requires transparency. Leaders should encourage open communication and avoid concealing problems. A leader's ability to see problems is vital, not just in times of crisis – leaders should create a culture of openness and trust to gain the clearest view of the business.

• Dashboard Creation: Create a personalized dashboard tailored to their business needs. It should provide relevant information to make timely and informed decisions.

• Potential Challenges: Current Reality is complex. Organizations may try to obscure current reality for various reasons, such as preventing perceived negative feedback earlier.

• Using a Green/Yellow/Red System: A framework used to track progress towards goals by assigning colors—green (on track), yellow (some issues), and red (off course). This system aids in transparency and accountability.

• Importance for Ongoing Success: Consistent monitoring of Current Reality is crucial; neglecting it compromises leadership effectiveness and business health. Success hinges on understanding the present state to plan & make good decisions.

Potential Blind Spots

• Optimism Bias: Leaders, due to their optimistic nature, sometimes misinterpret the true state of their business. This can lead to them focusing too much on positives and ignoring negative aspects.

• Lack of Information: Ensure systems and reports provide the necessary data to understand the current state of the business. A willingness to adapt systems or create new reports is necessary.

• Avoidance of Challenges: Leaders should view problems as opportunities for improvement and solution creation. Ignoring problems leads to lost influence and suffering for the business.

• Use of Lagging Indicators: Leaders should utilize leading indicators alongside lagging ones to forecast future outcomes and steer the business.

Leadership Effectiveness

• Building Trust: Honesty and transparency with teams are key to leadership effectiveness. Honest feedback & support from leaders is crucial to success.

• Importance of Courage: Leaders need both courage and curiosity to face difficult conversations and make tough decisions for the best interest of the business.

Additional Notes

• Delegation & Involvement: Leaders must balance delegating and their involvement in daily operations. Over-delegation can lead to a loss of influence within the organization.

• Founding Entrepreneurs: Founding entrepreneurs, particularly, must focus on day-to-day operations as the business grows.

• Metrics and Numbers: Current Reality isn't solely about metrics; it requires seeing the performance of plans, processes, and people. This is not just data but a systemic understanding of the organization's performance.

• Mission-First Culture: Prioritizing the mission above all may be necessary when making difficult decisions.