AN INTRODUCTION TO LEADERSHIP SKILLS SMALL BUSINESS INFORMATION SERIES. May 2011 Edition. Housing Industry Association

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1 AN INTRODUCTION TO LEADERSHIP SKILLS SMALL BUSINESS INFORMATION SERIES May 2011 Edition Housing Industry Association

2 May 2011 Edition IA members: Have direct access to practical advice and professional assistance including the latest information on technical, regulatory and business matters; Receive the latest market information on consumer trends, new products and materials; and Benefit from increased business opportunities through skills development, access to a wide industry network and being actively promoted Australia-wide as being the best in the business by their industry association. For further information on the benefits of HIA membership or how you can join HIA, go to hia.com.au or call HIA on The content of this guide as provided by Housing Industry Association Limited (HIA) is practical information of a general nature only for those who are operating, or who have decided to commence, a small business. The information provided is neither financial nor investment advice, and participants should make their own judgment on the application of this information to their own personal circumstances, if necessary, after obtaining accountancy or other professional advice. HIA will not be liable for any loss or damage arising from the actions of any individual based on or relying on any of the information provided in this guide.

3 AN INTRODUCTION TO LEADERSHIP SKILLS How this guide can help you run your building business A common strategy for business growth is to improve the productivity of your business by sharpening up your leadership skills. What is leadership? Dwight D. Eisenhower described it as The art of getting someone else to do something you want done because he wants to do it. 1 Jim Kouzes and Barry Posner, are experts in the field and are said to have identified 5 qualities as being the most important for a leader to have 2 : But, it is not enough to simply have these qualities. To be an effective leader, you need to be seen to have these qualities. Otherwise, you won t have the effect of influencing and inspiring others to follow. This guide: explains what each of these qualities mean; and includes some tips to follow and traps to avoid when putting this theory into practice. Appendix A contains a worksheet, so you can conduct an audit of your leadership skills. 1 Mark Shead, 2 Five Most Important Leadership Traits, Mark Shead, 3

4 1 Honest People know when you re true to yourself and true to them. Don t try being someone else. 3 John McGrath What does it mean? Honesty refers to being truthful not just to yourself, but to others (both within and outside the organization). Why is it important? Some tips Honesty is important as it creates trust. If others trust you, they will be more likely to follow you. Some handy tips include: > Take every opportunity to be seen to be honest (because deals being done on a handshake are few and far between these days and people are far less trusting that they used to be). > Give progress updates, even if things aren t going to plan. > Treat everyone fairly (and don t pass judgment until you are satisfied you have all the facts). > Hold your key reports accountable to your goals. Some traps What is an example? Some traps to be aware of include: > Making promises to individuals that aren t linked to measurable objective goals (if you are unable to make good on your promise, even for legitimate reasons, you ll be regarded as a liar because you broke your promise). An example is when you openly admit to others that you have made a mistake. 3 Founder and chief executive of McGrath Real Estate Agents, as featured in Smart Talk Business Review Weekly, 12 to 18 August

5 2 Forward-looking Good plans shape good decisions. That s why good planning helps to make elusive dreams come true. 4 Lester R. Bittel What does it mean? There are 2 aspects to being forward-looking, which are: > having a vision (& a clear idea of how to achieve it); and > being able to effectively communicate it to others. Why is it important? Some tips Some traps What is an example? 4 Mark Shead, You can t expect others to follow if you (or they) don t know where you re going. Some handy tips include: > Set some time aside specifically for planning. > Write down: your vision (i.e. your ideal state of how the world should be); your business s mission statement (i.e. its reason for existence) because your business is the primary vehicle for turning your vision into reality; and your business plan (i.e. your action plan which relates back to the mission statement). Some traps to be aware of include: > Being too busy for business planning if you spend all your time on the day-to-day running of your business, your business will be dependent upon your constant input and you won t be able to grow it. > Being too scared to share your vision (in case you don t achieve it). Having a written statement of your business s mission statement (your business s purpose or reason for existence it is a statement of how you are going to achieve your vision) on display in a prominent position. 5

6 3 Competent A competent leader can get efficient service from poor troops, while on the contrary an incapable leader can demoralize the best of troops. 5 Brigadier General John J. Pershing What does it mean? Competence refers to the ability to take action so you can achieve your goals. It is knowing what to do and how to do it and includes having good decision-making skills, especially with respect to prioritising projects and allocating resources. Why is it important? Some tips Others will be more confident about your abilities and therefore will be more inclined to follow (especially if the benefits of achieving the goal are not readily apparent to them). Some handy tips include: > You don t have to be an expert in every aspect of the business. > Be aware of your own shortcomings as well as your strengths (because there is always room for improvement). 6 Some traps What is an example? 5 Some traps to be aware of include: > Taking all the credit for a success that was only achieved because it was a team effort. > Not checking your ego at the door. When celebrating wins, attribute the success to your team but make sure your input is included or somehow recognised as a contributing factor.

7 4 Inspiring If your actions inspire others to dream more, learn more, do more and become more, you are a leader 6 John Quincy Adams What does it mean? Being passionate (having high levels of energy and enthusiasm) about your vision and communicating that passion to others. Why is it important? Some tips Others will want to follow, because they will be energised and motivated by you. Some handy tips include: > Relate things back to the bigger picture. > Think of those who inspire you and (if possible) watch how they communicate with others. > Be inclusive (i.e. involve others). > Be willing to try new methods. Some traps What is an example? 6 Mark Shead, Some traps to avoid include: > Think you can t be inspirational, because you re not naturally charismatic. Tell stories that are relevant to the situation and that others can relate to. 7

8 5 Intelligent It s what you learn after your know it all that counts 7 John Woden, sports coach What does it mean? We are not talking about being an intellectual. We are talking about having a number of abilities, such as being: > imaginative; > sensitive to other people s needs & wants; > able to read people & tap into their way of thinking; and > able to look at the situation in context and act accordingly. Why is it important? Some tips Others will respect you more, which will make them more inclined to follow you. Some handy tips include: > Ask questions of others (about their role) that guide them to giving you the correct answer. > One of the best ways to learn how to be a better leader is by being a leader. > Read regularly. > Keep an open mind. 8 Some traps What is an example? Some traps to be aware of include: > Thinking you know it all. > Being a know-it-all. Using your sense of humour to diffuse a hostile or tense situation. 7 Cited by John McGrath, founder and chief executive of McGrath Real Estate Agents, as featured in Smart Talk Business Review Weekly, 12 to 18 August 2010

9 APPENDIX A Leadership traits Why do you say you have this trait? How do you show others you have it? Honest Forward-Looking Competent Inspiring Intelligent 9

10 APPENDIX B Five Most Important Leadership Traits Mark Shead five-most-importantleadership-traits/27/ Managing Yourself Anne Morriss, Harvard Business Review, Stop holding yourself back: Robin J. Ely and January February 2011 Five ways people unwittingly sabotage Frances X. Fei their rise to leadership Are You A Good Boss Or A Great One? Linda A. Hill and Harvard Business Review, If you want to keep growing as a leader, Kent Lineback January February 2011 ask yourself these key questions. 7 Principles for Inspiring Employees Terry Barber Management Today, January/February 2011 Smart Talk: Insights from Entrepreneurs Featuring Mark Bouris, Business Review Weekly, Yellow Brick Road March 3 9, 2011 founder Leadership What s It Take? Sarah Marinos Management Today, May 2011 Lessons From Very Cold Dogs Glenn Townend Management Today, A working-dog sled team provides May 2011 unique insight into the characteristics needed for leaders. Nature and Nurture Derek Parker Management Today, The issue of the origin of good leadership May 2011 throws up so many questions, it s hard to know where to start. 10 Theory Only Is Not Enough Jorgen Thorsell Management Today, Future leadership development must be May 2011 in real time, focused on actual challenges and directly connected with everyday experience. Connected Leadership Judith Chapman Management Today, Expertise isn t always enough: the quality May 2011 of a leader s relationships with others will determine success or failure. The Wise Leader Ikujiro Nonaka and Harvard Business Review How CEOs can learn practical wisdom Hirotaka Takeuchi May 2011 to help them do what s right for their companies and society.

11 APPENDIX B Smart Talk: Insights from Entrepreneurs Featuring John Business Review Weekly, McGrath, founder and August chief executive of McGrath Real Estate Agents Feud undervalues the power of two Leo D Angelo Fisher The Business End, Business Review Weekly, July 29 September 1, 2010 Whose Style Fits Best? Cameron Cooper Management Today, May 2010 The Motivation Factor Cameron Cooper Management Today, May 2010 Lead Little, Lead Big Cameron Cooper Management Today, May 2010 Leading by Rote Leo D Angelo Fisher The Business End, Business Review Weekly, January 21 27, 2010 Top 10 Leadership Qualities David Hakala features/top-10-leadershipqualities / Notes: 11

12 SMALL BUSINESS INFORMATION SERIES: AN INTRODUCTION TO LEADERSHIP SKILLS For more information, you can contact HIA by phone: or by