Are successful business leaders born or made?

February 3, 2019 By Lesley Anne Rubenstein-Pessok

The answer to this poser invokes the old, ‘nature’ versus ‘nurture’ argument. Maybe we need to study twins who were separated at birth, where one became a business leader, and determine what happened to the other? In the real world, business leaders, like any other leaders, come in all shapes and sizes. If you studied a group of successful business leaders from various industrial sectors, I would hazard a guess that they would have different personality traits and backgrounds.

The variants are likely to be greater still according to discipline. Successful business leader in the financial sector are unlikely to have the same personality characteristics as one in the high technology sector or in the hospitality arena. An accomplished executive in the insurance sector, however, may very well have more in common with a leader of a banking institute. I’m making some assumptions here, but I wouldn’t be surprised if you are in agreement.

Are business leaders born or made?

Before we answer that question, let’s list some of the traits we would expect to find in a great business leader:

Visionary
Decisive
Motivational
Confident / Assertive (but not a bully!)
Likeable
Mindful
Collaborative
Inspirational
Great listener
Integrity
Intelligent
Respectful
Empathetic
Ability to prioritize
Create emerging leaders
Flexibility
Non-judgemental
Empowering
Optimistic

Can we learn to become a better business leader?

There is nothing in this list that cannot be learned or improved upon by a determined individual. One can read books, study, attend workshops, take drama classes, do mental exercises, etc. to gain many of the qualities listed. One can even be trained into ‘thinking big’. Mentors will often determine a CEO’s mental obstacles to growth and ask pointed questions to help him/her see what is holding them back. For example, now in its tenth year, the annual Women into Leadership conferences is a key event for all those interested in seeing leadership opportunities for women enhanced. Women into Leadership 2019 will examine how female leaders, at any grade, can enhance their skills to become the leader they aspire to be.

Acquiring listening skills

In my own ‘Effective Leadership’ business workshop, we spend time in an interactive exercise to experience both good and bad listening skills, and what it takes to become a good listener. Listening and empathy are crucial leadership qualities to my mind. The core skill is not just to listen but also to learn to interpret what is said, both verbally and non-verbally.

How important is it to have empathy as part of your leadership skill-set?

A simple way of describing empathy is when we can visualise, identify being in the other person’s situation, and being able to communicate our feelings to the other person. Sometimes, to show understanding, we need to show vulnerability and describe something we have experienced which may not be showing us at our self-assured best. Think back to the last time you were upset about something you felt was important, and you expressed your feelings and the person you were confiding in understood and empathized. How did that make you feel?

What about confidence?

Listening and empathy are important, but confidence is also an essential leadership trait. As mentioned above, there are mental exercises to acquire several of the traits listed and practise does make perfect. ‘Fake it till you make it’ is another way of saying this, although I’m not sure I particularly advocate that saying as I don’t like anything fake. But if we take ‘confidence’, for example, and practise acting confidently in a drama class, it would be something we could pretend even if we aren’t feeling particularly self-assured. No-one will take direction from a dithering leader in a crisis, and the ability to hide one’s emotions where necessary and appear confident, is a crucial quality in a great leader.

Born leaders

Some people, however, will be perceived as ‘born leaders’, either because they make it look easy, and/or because from an early age they presented leadership qualities. I’m sure we can all summon up a picture of a child in the playground telling the other youngsters what to do and how to do it, and envisage those children following the instructions. Does that mean the child is a born leader? I would argue that some traits may come naturally but many will be determined by life experiences and education in both home and school environments. If a child is bullied, for example, that same child will often become a bully; though this will not apply in all cases. Chains can be broken. Note: not even great business leaders are infallible, and no-one always gets it right and, on occasion, we may mistake luck for great leadership.

In conclusion

Whether or not you are fortunate to have been born with some, most, or all the leadership qualities mentioned in this article, you can work on, and exercise, your leadership skills your entire life.

So, are business leaders born or made? It is not possible to give a conclusive answer, but either way, you can strive to be a better leader and never stop improving. Being a great business leader will serve you well in all walks of life. It’s up to you!

About the author

LGBA Associate Lesley Anne Rubenstein-Pessok, has spent her whole career in executive roles, working with and training start-ups and SME businesses, helping them to become more efficient, increase turnover, improve profitability, cost effectiveness and create strategies that pay off. She is an approved mentor for the London and Partners’ Business Growth Programme, as well as for other public funded programmes. To find out more about Lesley’s mentoring and business advisory services contact her by email at Lesley.rubenstein@lgbusinessadvisors.co.uk or call her on 020 8868 3163.

How to design a robust profit-sharing bonus scheme for 2019

January 24, 2019 By Stephen Cowburn

In the last newsletter we talked about what to do about awarding a Xmas bonus. [If you missed it click here to find it] Now we talk about putting a bonus scheme into place for 2019.

If your financial year-end is say March, the next few months could be a good time to develop and trial a scheme before launching it in April.

What should l incentivise people on?

The profitability of the business is a simple way to measure business success. If there is a large minority of support staff then you might also consider cost-savings/efficiency savings as being the other side of the profit coin.

You might be tempted by the achievement of individual objectives. Our general experience in the SME space is that staff appraisals don’t happen consistently enough so we wouldn’t recommend a performance pay system based on the achievement of individual objectives, as MDs usually haven’t the infrastructure in place to make this watertight.

What do l need to do first?

You will presumably have a business plan and a budget. Interrogating the likelihood of achieving a sufficient profit to be able to afford a profit-based bonus is the first step. If your assessment is that the profit figure is going to be insufficient consider the criteria for your top people as a pre-cursor to offering a wider profit-sharing scheme.

You need good data so you need accurate monthly management accounts to monitor profitability and to be able to communicate progress easily, to your management team and then staff, post launch.

You may have bespoke software if you run a sales based, or project-based, organisation enabling quick assessment of profitability if looking to incentivise individuals.

If you don’t have either of these, this is the immediate focus. Inaccurate data is guaranteed to lead to issues later on – employees will think one thing, you as MD will think something else and trust and credibility will dissipate in the event of misunderstandings or disputes.

Anything else pre-launch?

Test the model you are proposing. Does the maths work? Are there any unintended consequences? Are there grey areas? (if so tighten the scheme up). Will it clearly drive the behaviour you are looking for? Test it with other Directors or advisors to ensure the outcomes you seek and that the wording is clear with no ambiguity.

Plan the communication – what are the goals? What are the rules going to be? (For example, is there to be a hurdle rate before any bonus is paid out? What are you going to offer joiners or leavers within the period of the bonus scheme?)

Use worked examples so people can see what needs to happen to qualify for a bonus and how the scheme is going to work in real life.

Rather than say there will be a predetermined formula for distributing a fixed percentage of profits, we would suggest an approach where there is a company profit threshold below which no profits will be distributed and that there will be maximum limits set on the proportion of profits that will be distributed (say 5%) and/or the percentage of salary that will be distributed as a profit share (say 10%).

Having launched, what do l do then?

Regularly communicate performance at monthly management meetings and provide a general status update (verbally) to all staff on company performance ideally quarterly. The purpose here is three-fold:

To manage expectations if performance is below expectations
To give people a steer as to what needs to be done to get back on track.
To encourage staff retention by communicating the likelihood of a bonus pay out

Ensure that you pay the bonus when you say you will.

A chunk of our work comes from resolving disputes between employees and the Owner. It usually comes down to poor wording or a misunderstanding on how to get a bonus. The scheme rules are important but they need to be watertight pre-launch. You are likely to run into trouble if you try and change the rules midway through the year because of ambiguous wording.

So wherever you are in your business cycle, and whatever you want to do, if you feel the need for a fresh, neutral pair of eyes give us a call for an initially free consultation.

Contact stephen.cowburn@lgbusinessadvisors.co.uk or 07974 425361, for a focused discussion.

Excel automation

March 23, 2017 By bob.basson@tvba.co.uk

Not more spreadsheets to analyse and chart…

Always a regular cry in the office. Reports produced on a regular basis need to be embellished, with charts that involve some fairly complicated calculations – cross-reference look-ups, previous month comparisons, and all that sort of thing.

Probably, now this is done largely by hand. The data sits in several spreadsheets and/or databases, and is extracted, filtered, pivoted and everything else that was necessary to get it ready, before feeding into a chart. When the chart was ready, it is pasted into the report.

Wouldn’t it be great with the data is all in one place, and with a single front-end, the necessary criteria set from drop-downs. Once these selections have been made (locations, benchmarks, which dataset to use, and so on) you click a button and go and make coffee. Actually, you haven’t really got time to make coffee as the process takes just a couple of minutes – if that.

In this instance, any number of queries can be run; sometimes one query, sometimes several to generate the data. Each one automatically loading a into an Excel workbook, in to the right columns, in the right order to aid presentation. Then, your screen explodes into a fresh multi-coloured set of charts based on the information just collated! And is that the pivot table I slave over every month appearing before my very eyes!

In the past that has meant spending anything between a couple of hours to a couple of days for more complex reporting every period. Multiply that by twelve, and it becomes a not insignificant amount of time in a year m to get these twelve reports, graphs and charts prepared.

Say it was half a day of someone’s time, at the average salary of £26,000 – that’s a cost of around £60+ to the business for each report, or chart. Each and every time.

If reporting is weekly, that’s going to be more than £3,000 every year – more likely a lot more than that. If it now takes 30 minutes to do the whole job, that’s a total of just over 4 days for the whole year’s worth (at one report a week). The four days will cost under £500. So you get to keep £2,500 to do something else with.

What would you like to do with it?

Excel automation by Bob Lewis-Basson – 07802 441 728

Data Protection

March 22, 2017 By bob.basson@tvba.co.uk

Under the Data Protection Act 1998 (DPA) you must:

use personal information fairly and lawfully;
collect only the information necessary for a specific purpose(s);
ensure it is relevant, accurate and up to date;
only hold as much as you need, and only for as long as you need it;
allow the subject of the information to see it on request; and
keep it secure.

Good information handling makes good business sense, and it provides a range of benefits. You’ll enhance your business’ reputation, increase customer and employee confidence, and by ensuring that personal information is accurate, relevant and safe, save both time and money.

Your business has established an appropriate Data Protection Policy?

A policy will help you to address data protection in a consistent manner. This can be a standalone policy statement or part of a general staff policy. The policy should clearly set out your business’s approach to data protection together with responsibilities for implementing the policy and monitoring compliance. The policy should be approved by management, published and communicated to all staff. The policy should also be reviewed and updated at planned intervals or when required to ensure it remains relevant.

Your business has nominated a data protection lead?

It is good practice to identify a person or department in your business with day-to-day responsibility for developing, implementing and monitoring the data protection policy. Allocating these responsibilities to a data protection lead will help you effectively manage and co-ordinate data protection, and make your business more accountable. The lead should be appropriately skilled and have the necessary authority and resources to fulfil their duties.

Your business provides data protection awareness training for all staff?

Any data security breaches are accidental and result from insider actions. You should brief all staff handling personal data on their data protection responsibilities. It is good practice to provide awareness training on or shortly after appointment with updates at regular intervals or when required. Specialist training for staff with specific duties, such as marketing, information security and database management, should also be considered. The regular communication of key messages is equally important to help reinforce training and maintain awareness (for example, intranet articles, circulars, team briefings and posters).

If you are not sure where you stand in respect to DPA (Data Protection Act) or the forthcoming GDPR (General Data Protection Regulation) call me now …

Bob Lewis-Basson 07802441728, or email bob.lewis-basson@tvba.co.uk

Power up your business with a Virtual Non-Executive Director

March 6, 2017 By Gordon Carmichael

The benefits of Non-Executive Directors are well understood by many successful business owners. They bring an independent view and additional experience that enable better decisions to be made by the management board. Our Home Counties and London Group Business Advisors have developed a Virtual Non-Executive Director (VNED) service that offers Managing Directors and business owners the same independent view and advice without the complexity of shareholdings, appointing legal directors and director’s service agreements.

Every company is different and yet there are many similar and transferable aspects from other industries and markets. Our experts are able to utilise their broad business experience and extensive network of contacts to support companies to achieve their strategic objectives. An independent view that challenges existing or new strategies can substantially enhance the robustness of a company’s direction. Sometimes difficult decisions are required to deal with business problems and the VNED can act as a sounding board to provide guidance and help the decision making process.

Our approach recognises that established and start up businesses have different needs at different times in their life cycle. New businesses often have a need to demonstrate credibility externally to customers and investors. Appointing a Virtual Non-Executive Director can enhance this.

How does it work?

The optimal Virtual Non-Executive Director approach varies with the needs of a business, the existing in-house skills and the “personality” of its MD and management team. Our experts are adept at engaging with companies to strike a balanced approach between coaching, practical advice, strategic input and holding the management to account where appropriate. Prior to engagement, we offer a confidential, no obligation, no holds barred discussion to establish what is actually needed and to establish priorities. A flexible approach is adopted to accommodate the practical time constraints of running a business, the need to react to short term opportunities or threats, planning for growth, the changing needs of the business and potentially planning for exit.

Businesses need to get things done but don’t always have access to the in house skills or expertise required for projects or specialist activity. If appropriate, our business experts can introduce trusted resources from their network that can jump start new requirements.

What does it cost?

The VNED service is charged on a monthly retainer basis with no long-term commitment and no surprises. The service is designed to deliver on-going value to the MD and the company. The monthly cost depends on the level of engagement agreed and will be tailored to your needs.

Contact Gordon Carmichael on 01276 818125 or gordon.carmichael@hcbusinessadvisors.co.uk to discuss how our Virtual Non-Executive Director service can benefit your business.

Impending Employment Law Changes for 2017

February 6, 2017 By

As MDs think about the New Year or start planning for the next financial year there are a number of forthcoming employment law changes that may affect you and your business.

Gender Pay Gap

True this applies only to large employers (employing over 250 employees) but it is likely to be cascaded down to the SME sector in coming years. So why do something about this now? Gender pay gap reporting applies both to bonuses and pay. If there are discrepancies between male and female workers on either score when employees are doing the same job, there are likely to be fines, the cost of immediate remedial action and potential claims for back pay equalisation going back 7 years.

The reporting requirement for large employers will be to publish:

the difference in mean pay between male and female employees;
the difference in median pay between male and female employees;
the difference in mean bonus pay between male and female employees;
the difference in median bonus pay between male and female employees;
the proportions of male and female employees who were paid bonus pay; and
the proportions of male and female employees in each quartile of their pay distribution.

This should be a relatively quick job for the SME to see if there are any discrepancies and, in any event, is good practice to check that there is no unconscious bias creeping into pay decisions. Unless there is objective performance criteria to explain the difference, MDs might well consider putting in place a remedial action plan where appropriate. Given that SMEs are unlikely to be affected for several years, it gives MDs the opportunity to manage any discrepancies over a number of pay rounds.

Apprenticeship Levy

SMEs will be able to receive government funding towards the costs of apprenticeship training and assessment through co-investment, with the likely date of this new system of funding in England coming into effect from 1^st May.

The Government will pay 90% of the price agreed with the training provider, up to the maximum allowed by the funding band for the relevant apprenticeship standard or framework.

Employers with fewer than 50 employees will not be required to pay a contribution to the cost of the apprenticeship where the apprentice is aged 16 to 18 inclusive, or aged 19 to 24 inclusive if he or she has previously been in care or has a local authority education, health and care plan. The Government will pay 100% of the training and assessment costs in these circumstances.

Changes To Rules Employing Foreign Workers

From April 2017, an immigration skills charge will be introduced, so that SMEs that employ migrant workers under Tier 2 of the points-based system of immigration will be subject to a levy of £364 per certificate of sponsorship per year. The immigration skills charge will be in addition to current fees for visa applications.

In April 2017, the minimum salary threshold for “experienced workers” applying for a Tier 2 visa will increase to £30,000. New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

National Minimum Wage

Cycles for national minimum wage increases – including the National Living Wage – will be aligned, with the next round of changes taking effect on 1 April 2017.

From 1 April 2017, the rates payable will be as follows:

For workers aged 25 or over, the rate will be £7.50 per hour (the National Living Wage).
For workers aged at least 21 but under 25, the rate will be £7.05 per hour.
For workers aged at least 18 but under 21, the rate will be £5.60 per hour.
For workers aged under 18 who are no longer of compulsory school age, with apprentices excepted, the rate will be £4.05 per hour.
For apprentices aged under 19 and apprentices aged 19 or over but in the first year of their apprenticeship, the rate will be £3.50 per hour.

Interns

Not a change but linked to the previous point about the national minimum wage, we often get asked about what an intern should be paid, if anything at all. Whether an intern qualifies for the national minimum wage depends on whether or not he or she satisfies the definition of a “worker”. Where, under an agreement with an organisation, the intern is obliged to work for it personally, the definition is likely to be satisfied and he or she will be entitled to the national minimum wage. However, if the intern is only observing or shadowing employees of the organisation, without undertaking any work him- or herself, he or she is unlikely to be a worker and will, therefore, not be entitled to the national minimum wage. If the latter applies we would recommend that you consider paying travel expenses and subsistence as a gesture of goodwill and a way of promoting your company for the future.

There are quite a range of employment law changes coming up this year. If any of these may affect you, then give us a call for a confidential discussion to talk these changes through. I can be contacted via stephen.cowburn@hcbusinessadvisors.co.uk or by phone on 07974 425361.

Navigation

What should l incentivise people on?

What do l need to do first?

Anything else pre-launch?

Having launched, what do l do then?

How does it work?

What does it cost?

Gender Pay Gap

Apprenticeship Levy

Changes To Rules Employing Foreign Workers

Interns