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Spotting good leaders

April 1st, 2008 / By: / Category: Management

Who runs your business when you’re away? Who gets that promotion to supervisor? How do you distinguish good leaders from good workers? These are questions about leadership—and you probably have too little time to think about it. So what do you do? Proceed on instinct?

If you trust your gut, you’d better be right. Good managers are essential in any business. Picking someone who knows how to lead can take pressure off owners and help the business prosper.

Picking bad leaders, however, can make owners’ jobs harder—and turn a successful business into a bomb.

Can your prospect inspire? Motivate? Communicate? Delegate? Is your prospect a role model: someone who can strategize, execute and deliver? Does your prospect recognize the importance of other workers?

Only one in four companies has a formal succession-planning process, according to the American Productivity and Quality Center (APQC) in Houston, Texas, which tracks best practices for its 500 members. Are you one of the three in four who don’t have a succession plan? Then you haven’t figured out who will step up and take your place when you travel, get sick or retire.

Leading indicators

How do you tell a good leader from someone who will lead your company down the rabbit hole? You might have to catch your prospects in the act of actually demonstrating leadership. “I think a lot of times people don’t even know they’re leaders until they do something,” says Curt Crawford of Belleville, Kan., a retired former director of operations for Precision Dynamics and Honored Life Member of the Industrial Fabrics Association International (IFAI). He still works as a consultant. For Crawford, seeing people get results is crucial. Prospective managers “aren’t all about activity,” Crawford says. “They’re about accomplishment.”

Yet there’s a vital distinction between a good worker and a good manager. Getting the job done is great but did the prospect get the job done by motivating and guiding others? Or by working alone? “There’s quite a difference between success in managing projects and managing people,” notes Rachele Williams, who has studied leadership as a program manager for the American Productivity and Quality Center.

A great project manager may love to work alone: may not delegate, may not be a team player, may be lousy at telling people how do to something better.

The best kind of leader, on the other hand, can briefly outline how you’ve screwed up and tell you exactly what to do next … and all the while you actually enjoy the learning experience. Does someone like that work in your business? You should put that person on the short list for promotion.

The big picture

How do you find such prospects? Quarterly overviews of everybody’s performance potential? Annual talent-review sessions? Individual development plans?

These are services you can buy or develop internally, with the inevitable paperwork and meetings. Or you can observe people at their jobs, look them in the eye and figure it out on your own.

Watch for people who see the big picture, suggests Crawford. When you walk through the plant and ask people what they do, and someone says, “Well, I sew this piece to that piece and then I hand it on down the line”—that’s not big picture. Good promotion prospects think about how what they do affects the next person down the line, and ultimately, the customer.

Ask people how to solve problems in their work areas, says Crawford. Being able to identify and describe a problem is one mark of a good leader. Big problems are a big opportunity for spotting leaders. Crawford was with a fabrics business that struggled during the 1970s. The company found short-term financing and pulled through. And the crisis taught Crawford something about leadership.

In a crisis, he notes, some people might say, “We’ll just try our best.” Leadership prospects, however, will vow, “We can come out of this. We can overcome this,” says Crawford. “They will somehow find a silver lining.”

The manager within

In a small community there’s a premium on promoting from within. Newcomers often find Stearns, Ky., pop. 500, too small, notwithstanding the hunting, fishing and hiking along the gorges of the nearby Appalachian foothills.

“They come for the money and the growth opportunity—and they tend to leave for the money and go on someplace else,” says J.C. Egnew, CEO and founder of Outdoor Venture Corp., which makes military tents and accessories for the Department of Defense. So Egnew often looks within his own company for people to promote. He wants those who seek a chance to learn and grow, and then to help the company grow. He also looks for “genuine concern” for others in the company, for focus on customers, and for willingness to work the occasional weekend.

The American Productivity and Quality Center adds to Egnew’s list of leadership traits: initiative, accountability and the ability to motivate. No surprises there, but APQC appends these leadership characteristics as well: teachability and humility.

You would want a manager who listens when you have something to say, right? And you wouldn’t want a manager who refuses to admit making a mistake. Humility, however, is something you show, not something you talk about. “Once somebody says, ‘Gosh, I’m humble,’”observes Crawford, &rldquo;they just lost it.”

Start with customers?

Leadership consultants Dave Ulrich and Norm Smallwood identify what they call the “outside-in” style of leadership development among big firms that produce consistently excellent managers: It starts with customers. Writing in Harvard Business Review in 2007, Ulrich and Smallwood find that businesses good at developing leaders use customer feedback in evaluating executives, and ask customers to participate in leadership-development programs. In short, if you value customer focus, should you ask your customers whom to promote among your workers?

It works for the companies Ulrich and Smallwood studied; some of the companies became so good at developing managers that they’ve become known as “leader feeders”—and other businesses routinely hire their managers away.

Of course you want to keep good leaders. But if good leaders do get away, you’re still covered, because another key mark of good leadership development, say Ulrich and Smallwood, is that you’re always working to identify and develop new leaders. As you walk around your offices and shops, make sure you’re looking for those key characteristics.

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