The team is a crucial asset of any SME. It is essential that you have the best people on board, and that you do all in your power to build a winning team.
The prevailing wisdom is that there are six keys to a winning team. They’re all important, but the first is the most important of them all:
Without strong leadership, you can’t have a winning team.
You may have the best team on the planet, but if it isn’t backed up and guided by strong leadership, the result will be like having a supertanker sailing the ocean without a rudder.
But what does strong leadership mean? We can go into detail about the different styles of leadership, and the need for leaders to have passion, and to give their all for the business, but leadership itself begs one question:
Who’s the boss?
Because, no matter what anyone says, there can be only one boss. And that can be problematic in some SME’s, where brothers, or a couple of friends, are in business together, and they imagine they can manage by consensus. Everything will be discussed, and no decisions will be made unless there is unanimity.
But business doesn’t work like that. Business is not, and cannot be, a democracy. At the end of the day, someone has to take responsibility, and make the tough decisions.
Because there won’t always be unanimity. People don’t always agree on the best way forward. And in those situations, the business can’t just sit still and wait until everyone is convinced, because that can lead to great damage to the business.
In July, Fortune published an article about the rise of Airbnb. In 2007, Brian Chesky and his friend Joe Gebbia were broke, and couldn’t pay the rent. So they decided to break out some air mattresses, and sell some sleeping space in their apartment to attendees of a sold out trade show. They called it Air Bed and Breakfast. Three people bunked with them, and they got some attention on blogs. A few months later, Nathan Blecharczyk, an engineer friend, joined them as a co-founder, and the site debuted in August 2008 as Airbedandbreakfast.com, an online platform for people to rent out space in their homes. Chesky gravitated to the role of leader, while Gebbia focused on design, and Blecharczyk on technology.
management, by talking to the best people he could find. From Sheryl Sandberg of Facebook, he learned to be proactive. From Apple’s Jonny Ive, he learned to stay disciplined and focused. From Bob Iger of Disney, he learned to stay cool. Warren Buffet taught him to avoid “noise”, and George Tenet, from the CIA, told him to be visible to his people.
Great teachers all, and great lessons. But perhaps the greatest leadership lesson was the one he learnt himself when something went wrong.
A San Franciscan host, someone who had let her house out on the Airbnb site, had her home burglarized and ransacked by renters in June 2011. The company’s initial response was lackluster, and the renter – a woman known as “EJ” – responded in a blog post that the company had not done what it could to help her.
Airbnb went silent, and the story got louder.
There was no consensus on how to handle the situation. Everyone had a different opinion. Some felt that if the company took responsibility, it would open the door to more complaints. Some felt that they should put the truth out, others that they should stay quiet. Because they could not get to unanimity, the situation dragged on for weeks.
That’s when Chesky had his “light bulb” moment. One of his obsessions in his business is culture. He decided that he was the boss, and that he had to manage for the principle, not the outcome. He felt that he needed to apologize, even if it hurt the company.
So, against advice from his co-founders, and others within the company, he composed a strongly worded letter, accepting responsibility. He not only apologized, but also announced that the company would be implementing a $50,000 guarantee.
Chesky’s primary takeaway from this experience was to stop making decisions by consensus. In fact, this is the third of Chesky’s own leadership principles: “Don’t manage by consensus in a crisis. Usually in a crisis you have to go left or right, and everyone wants to go middle. And middle is the storm.”
This moment not only made Chesky realize that, as the boss, he had to take responsibility for some difficult decisions, it also had a major effect on his team – it was a defining moment in their confidence in him as a leader. As one manager put it: “That was the turning point where I had 100% confidence in this company’s leadership, and was ready to take on any challenge the world threw at us.”
In many cases, an entrepreneur will start a business, and, from the start, is the boss. When new people join, there is no doubt as to the identity of the person who will take the final decisions.
The problem lies in those other cases, where two or more people start the business together. There is no obvious leader – everyone is on the same level. Then it is essential that the functional organizational chart that is so necessary for any business must clearly and unambiguously identify the boss – the leader.
And the leader must accept the job, and the responsibility.
And the other team members must accept his leadership, and the fact that the final decision will rest with the leader.
Then the business can have strong leadership, and can develop a winning team.