Predictive Leadership

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Col (Retd) Ajay Sreedhar

 Different styles of Leadership


 Various stages of Business
growth
◦ Start up
◦ Hyper growth
◦ Maturity
 12 warning signs of success
◦ Identification and mitigation
 What is Predictive Leadership
 Case study on Leadership
What is Leadership?

Google gives out 4,79,000,000 search results

The activity of leading a group of people or an organization


or the ability to do this.

Leadership involves:
1. Establishing a clear vision,
2. Sharing that vision with others so that they will follow
willingly,
3. Providing the information, knowledge and methods to realize
that vision, and
4. Coordinating and balancing the conflicting interests of all
members and stakeholders.
Leadership Styles

• Coach
• Visionary
• Servant
• Autocratic
• Laissez faire or hands off
• Democratic
• Pace setter
• Transactional
• Transformational
• Bureaucratic
Types of Leaders
Coach Visionary Servant Autocratic Hands Off
• Team • New Ideas • People • Results and • High
player • See beyond First Efficiency Delegati
• Smart Horizon • Collaborat • Number on
Goals • Inspiring or Oriented • Flat orgs
• Time • Strong Org • Consensus • Strict • Myriad
Intensive Bond • High Guidelines Ops
• Risky • Small Orgs Morale • Decision • Highly
• People or • High making experien
Oriented Restructurin Engageme small group ced and
g nt • Coterie well
• NGOs/Non culture trained
Profit • Hospitals team
• Surgeons/ • Leader
Pilots focus on
growth
Types of Leaders
Democratic Pacesetter Tranformational Transactional Bureaucratic
• Mix of • Performanc • Inspiring • Laser Focus • Rules and
Hands off e Focus • Clear Comn on procedures
and • High • Less performance • SOPs
Autocratic standards Supervision • Incentives • Hierarchical
• High • Results • Rockstar team • Punitive • No
Engageme oriented action collaboratio
nt • High • Sales and n/ creativity
• Employee accountabi Revenue • High
word is lity Targets accountabili
heard • Short term • Creativity ty
• High stifled • Finance/
satisfactio Govt
n
• Creativity
and
Innovation
industry
Kirk Dando, CEO of Dando Advisors, is a highly
sought-after and well-respected leadership and
growth expert whom executive clients call ―The
Company Whisperer.‖

He is the author of Predictive Leadership.

A former corporate executive, he has helped


more than 5,000 executives – including several
regional Ernst & Young Entrepreneurs of the Year
and ―Best CEO‖ winners – overcome common
business pitfalls to unlock explosive growth.

As seen on Fox Business and Bloomberg


Television, executives relate to his real-world
stories and his high-energy, no-nonsense style
as he demonstrates how leaders can predict
problems before they show up in the results.

He lives in Fort Collins, Colorado.


My Take

• Coined a new terminology


• A bit over priced at
• Easy to read and assimilate.
Rs1295/-
• Language is conversational
• Bit of a loud mouth
and casual
• Slightly self obsessed
• Experience in corporate is
• Regularly comes in
obvious
Bloomberg and Fox TV
• Doesn’t beat around the bush
• One book wonder
– Direct to the point
• Intellectual appeal ???????
• Not afraid of saying his mind
This simple truth was shown in a 2003 study of 1900 professionals who
help businesses in trouble.*

Reasons For Decline

Too much Debt 28%


Inadequate Leadership 17%
Poor Planning 14%
Failure to Change 11%
Inexperienced Management 9%
Not Enough Revenue 8%

Reasons For Decline


*Source: Buccino and Associates: Seton Hall University Stiffman School of
Business, As reported in August 25, 2003, Business Week.
Level I: Startup ―Getting ready is the secret of
success.‖ — Henry Ford
CHARACTERISTICS:
• Founders intimately involved in the day-to-day operations.
• Producing and selling products or services- primary emphasis.
• The need for fundraising quickly emerges.
• Management, development, systems, and planning -minimal emphasis.
• Communication is casual.
• Employees - long hours and paid modest salaries (typically with equity).
• Management and leadership react more to customer needs than to
employee needs.
• The founders -technically oriented or incredible market builders. Not
skilled managers.
• The company culture is generally understood. It does not require a lot of
reinforcement.
• Innovation and new ideas happen quickly, without friction.
• Every day at the company - fresh, exciting opportunity.
• It is an uncertain, but fun time.
• Growth is sporadic.
Level I: Warning Signs of Success

• Two or more founders or partners -confusion around


functional role and value.
• New employees are less motivated by money and more
motivated by opportunity and work environment.
• Problem solving without thinking through the long-term
ramifications.
• Systems ―hacked‖ together and don’t scale well.
• More and more people are hired, but founders have trouble
working ―on‖ the businesses, instead of ―in‖ the businesses.
• Minimal cash planning and/or misuse of cash-capital
shortages.
• Tempted to diversify into unrelated products, services or
businesses.
• Outside influences start to cloud the original vision of the
business.
―It was the best of times, it was the worst
of times.
It was the age of wisdom, It was the age
of foolishness
It was the spring of hope, it was the
winter of despair.‖
Charles Dickens, A Tale of Two Cities
Level II : Growth Phase
Characteristics
• Start to realize you don’t know what you don’t know.
• You’ve found your product/market fit.
• Business growth - funded from outside investment or cash flow.
• Multiple locations- sales offices, branch offices or off-site
warehouses.
• Focus diversifies- strategy, marketing, employee benefits,
budgeting, etc.
• Jobs - more specialized.
• Growth rate is faster than in Level I, accelerating at a very fast
rate.
• The culture needs to be explicitly communicated and reinforced in
words and actions.
• Benchmark against other rapid-growth businesses.
Level II: Warning Signs of Success
Leadership
• Executive leadership team - misaligned
• Entitlement plagues some executive team members.
• Long-term loyal employees cannot scale themselves to meet the
needs of the business.
• Friction between old and new leadership.
• The org chart like a rake – everyone reports directly to the CEO.
• Org charts - built based upon the people currently within the
organization – not the future needs of the organization.
• Executive leadership team fails to understand or react to changing
market conditions or increasing competition.
• Less communication from the top.
• Too many strategic bets are placed in the hopes that few will work.
• Leaders tempted to sustain rapid growth indefinitely without the
infrastructure needed to scale the business.
• One or a few customers represent a disproportionate amount of the
business, increasing vulnerability to competition.
Level II: Warning Signs of Success
MANAGEMENT
• Effects of mismanagement.
• Top-performing individuals - become the management team,
• Delegation difficult for the C-Suite leaders- managers don’t have
the authority to make decisions on their own.
• ―Out of touch‖ -management less engaged with day-to-day Ops
• Silos start to form.
• Poor decisions by unqualified managers - systems, facilities,
recruiting.
• Meetings- awkward, time-consuming, ineffective.
• Accountability - confused and sporadic.
• Increased internal problems threaten the org ability to scale.
• Outdated corporate cultures
• Compromise values for certain ―special‖ employees
• Bureaucracy sets in
• Major shortages of management time occur.
• Some key employees become disenchanted and leave.
• Relationships - more important than qualifications or accountability;
the organization becomes a political beast.
Level II: Warning Signs of Success
SYSTEM/PROCESSES
• Inefficient or outdated systems and processes.
• No predictable people process that attracts, motivates, and
retains the best employees.
• There may be an annual strategy -no ongoing mechanism to
track progress toward the goals.
• Despite town halls, all-hands, fireside chats, and employee
communication, you start to hear, ―We don’t get enough
communication.‖
• Some employees in the organization start to complain that
―Things aren’t like they used to be‖ or ―We aren’t as nimble as
we used to be.‖
• There are ―pockets‖ of both tight and loose cost controls.
• Vendor relationships become strained. Long-term service
providers are no longer effectively able to serve the
organization.
• Financial performance reporting and control systems are often
inadequate for sales volume.
Road Ahead for Level II Companies

Three Possible Outcomes


To scale to Level III,
🌪 The Twister: The company fights
businesses must solve
the same battles day after day,
three key issues:
month after month. The Twister of
• An aligned leadership
activity (churning around and
team
around) eventually wears out the
• A true management
people in the business.
culture
🌪 The Shrink Ray: The company
• Processes and
can’t crack the code. The company
systems that can
shrinks because they can’t solve the
handle the weight of
problems of scale. They grow again,
scale
but since they haven’t solved the
root causes, they have to shrink
again.
🌪 The Money Option: If a rapid-
growth company can’t break through
to the next level, it’s a prime target
for acquisition.
Level III: Characteristics
• Entrepreneurial spirit- Smart bets on the future of the company.
• Robust operational rigor - strategy to life.
• Little to no complacency.
• Aligned exec and middle management -staffed with qualified people.
• Accountability is clear and well managed.
• Organizational identity beyond the founder and the current leader.
• Well-defined and communicated short- and long-term strategies
• Strong communication from the top to the bottom. The overall vision is
reinforced through an ongoing strategy process.
• Managerial leaders working ―on‖ the business than ―in‖ the business.
• Unproductive or unprofitable products and services are phased out.
• Market research, development, and planning - timely and in all areas of
business
• Competent staff, management and leadership development processes
are in place, including performance feedback, training, and coaching.
• Financial and non-financial performance data used in presenting,
planning, decision-making, problem-predicting and expense control.
• Financial health, profitability and cash flow – Strong.
Critical Warning Signs of Success
LEADERSHIP

RIGHT BAD MGT OPEN Leadership Hope is


IDEA, OF GREAT DOOR, Bottleneck not
WRONG OPPORTU CLOSED Strategy
PERSON NITIES MIND
Critical Warning Signs of Success
CULTURE

CORE DRINKING COMN INCENTIVIZE Hope is


VALUE THE VACCUM FAILURE not
MELTDOWN CHAOS Strategy
COOL
AID
Critical Warning Signs of Success
PERFORMANCE

FALSE RANDOM SOWING INCENTIVIZE


SECURITY ACTS OF SEEDS OF FAILURE
OF ACCOUNT DECAY
REVENUES ABILITY
Critical Warning Signs of Success
LEADERSHIP

RIGHT
IDEA,
WRONG
PERSON

• Starts with great idea and right direction


• Superstars syndrome
• Ship of Thesus theory- Team members changed, you
changed or goals changed
• Some people holding up growth
Critical Warning Signs of Success
LEADERSHIP

BAD MGT
OF GREAT
OPPORTUNI
TIES

• Technical/Functional experts elevated to


leaders
• Poor people management and poor
prioritization of opportunities
• Team members mismanaged – not able to
take advantage of opportunities
Critical Warning Signs of Success
LEADERSHIP

OPEN
DOOR,
CLOSED
MIND

• Dichotomy between actions and intentions


• New ideas dismissed, new processes impeded
• Can –Do/ Play to Win becomes Play it Safe
• Breakdown in comn
• Negativity and Insecurity
Critical Warning Signs of Success
LEADERSHIP

Leadership
Bottleneck

• Organisation looks like a Rake


• Key leaders have become Chief problem solvers
• Spend time working `in’ the Business rather than
working 'on’ the Business
• Capable managers frustated
• Others park all decisions on the CEO
Critical Warning Signs of Success
LEADERSHIP

Hope is not
Strategy

• Company sets up clear measurable targets


• Few missteps- Missed deadlines – Reduced focus
• Hoping to achieve audacious goals without
plan/org/processes/resources
Critical Warning Signs of Success
CULTURE

CORE Hope is
VALUE not
MELT Strategy
DOWN

• Starts with non negotiable core values, performance,


expectations and culture
• Compromises for special circumstances
• Leadership questionable actions
• Brilliant jerks tolerated
• Team loses faith
• Back channel gossip
Critical Warning Signs of Success
CULTURE

DRINKING Hope is
THE not
CHAOS Strategy
COOL
AID

• Opportunities galore – new markets,


new services, new products
• Team go-go-go
• Key people not able to draw a line
• Result – Chaos, burn outs, stress
• Everyone has a to-do list which is
endless and pointless
Critical Warning Signs of Success
CULTURE

COMN Hope is
VACCUM not
Strategy

• Senior managers reduced day to day interaction


with field
• Majority of team members not aware of priorities,
problems
• Executives feel out of control
• Teams perceive lack of direction
Critical Warning Signs of Success
CULTURE

INCENTIVIZE Hope is
FAILURE not
Strategy

• Rewards and recognition not tied to right


behavior
• What is achieved is prominent while How is
ignored
• Problem solving incentivized while problem
prevention is ignored
• Team loses faith
• Encourages wrong behavior
Critical Warning Signs of Success
PERFORMANCE

FALSE INCENTIVIZE
SECURITY OF FAILURE
REVENUES

• Revenue rising- things look good


• Poor control on spending
• Expenditures approved with no analysis
• Financial performance and market data not accurate and
shared with right people
Critical Warning Signs of Success
PERFORMANCE

RANDOM INCENTIVIZE
ACTS OF FAILURE
ACCOUNT
ABILITY

• Lack of transparent, consistent accountability


• Top performers don’t know what to do
• Average performers take advantage of the fog
• No deep culture of accountability
• Accountable people talk of what non
accountable people actually do
Critical Warning Signs of Success
PERFORMANCE

SOWING INCENTIVIZE
SEEDS OF FAILURE
DECAY

• In the beginning systems, processes and


technology gave fillip to the business
• Organization out grows- processes, people,
technology, accounting to people
• Not scalable but no time, money or talent
spared to fix it
• Focus on next quarter numbers only
• Technology debt growing but ignored
Guidelines to Evolve into a Predictive Leader

• Focus on the Vital Few and forget the trivial many

• Assess risks through the lens of priorities and


Opportunities

• Be specific

• Address the root cause of the Issue

• Involve all those affected

• No back channel
Summary

• Definition of leadership. It involves


• Vision
Quick recap of what • Communicating the vision
was discussed • Facilitating the execution
• Removing hurdles

• Leadership Styles – Bullet points

• Business Growth Models


• Characteristics
• Warning signs

• 12 warning signals of success

• Guidelines to becoming a Predictive Leader


12 Warning Signs of Success

Q. In your opinion which of the following signs are


evident in the company where Judy Wheeler works?

1. Right Idea Wrong Person


2. Bad Management of Great Opportunities
3. Open Door Closed Minds
4. Leadership Bottlenecks
5. Hope is not Strategy
6. Core Value Meltdown
7. Drinking the Chaos cool aid
8. Communication vacuum
9. Incentivizing Failures
10.False security of Revenue
11.Random acts of Accountability
12.Sowing the seeds of Decay

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