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Posted: August 20, 2014

Beyond the entrepreneur: Building business intelligence

You've got a license to learn

Todd Ordal

I’ve been fortunate to work with some great business leaders over the course of my career, many of whom are much smarter than I am. IQ, however, isn’t the defining characteristic that I’ve observed in successful leaders and managers. Moderate or higher IQ is necessary but not sufficient to succeed in an organizational setting.

I’d like to distinguish successful organizational leaders versus those who are entrepreneurial but own or run a very small firm. At the risk of offending the latter group — most often distinguished by creativity, courage, hard work and frequently ample content expertise in a specific product or market area (deep, but not always wide), I’ll address what’s more often referred to as the professional manager, business leader or today’s version of the “organization person” who must manage and lead in complex environments with many people. They may or may not be the founder (a low percentage of entrepreneurs go on to build large companies).

Large, successful organizations can be great educational environments for the advancing leader to build business intelligence, particularly if there’s a formal program for leadership development. However, they can also be a dark alley, forcing people to stay between the lines and become a functional expert without broad knowledge.

Midmarket companies, those beyond the entrepreneurial stage but well short of the Fortune 500, can be wonderful places to grow and prosper as a leader, whether CEO or a level or two below. But you must often put more effort into it. It’s likely not programmed for you, so you have to program it for yourself.

This is the territory where, as CEO, perhaps founder, you’ll understand that your past success won’t ensure your future success. In fact, it could prevent it. If your neural pathways are deeply grooved to act as you always have (you could call it success or call it resistance to change, depending on your perspective), there’s a good chance you’ll run out of mojo and hit the wall. This often looks like:

  • Unwillingness to invest in new projects because they feel like they’d be hard for you to manage, so how could someone else?
  • Resistance to understand and use new technology.
  • Opposition to hiring and paying for the talent needed versus what you can control.
  • Not upgrading your mentors, coach or advisers along the way — or worse, not having any!
  • Not getting involved in the world outside the four walls of the business and not paying attention to the changing business environment.
  • Reluctance to create market sensors or processes to understand the competitive environment.
  • Resistance to rethink your strategy (where will we play and how will we win?)

The prescription is largely the opposite of the challenges previously listed. Although some of it requires monetary investment, it’s mostly about mindset and activity. The successful leaders with whom I’ve worked:

  • Know they’ll have to upgrade staff as they grow.
  • Spend time talking to lots of outside people, both within and outside their industry.
  • Understand that if they routinely pull out all company earnings for personal use, they’ll box themselves into a corner.
  • Develop a return-on-investment mindset rather than a checkbook mindset.
  • Encourage discussion of their growth strategy’s viability and engage their team.
  • Keep current on economic and market trends as well as technology.
  • Try new things and get out of their comfort zone.

Here’s the equation or “proof” that should drive you, courtesy of David Peterson, director of executive coaching and leadership at Google:

  1. If: The best predictor of future behavior is past behavior in similar circumstances.
  2. If: The future is emergent and unpredictable (VUCA: Volatile, Uncertain, Complex and Ambiguous).
  3. If: Leadership effectiveness (future behavior) requires the ability to respond to uncertain scenarios.
  4. Then: Past success — especially in stable, linear environments — may be irrelevant.
  5. Therefore:  
    1. Leaders need to aggressively seek opportunities to learn, practice and experiment in VUCA environments.
    2. Organizations need to change how they develop leaders. If you are the senior leader, you need a plan to develop yourself.

Many years ago when I passed my first flight test and got my pilot’s license, the flight examiner said to me, “Congratulations! You haven’t really arrived, you’ve just got a license to learn.”

Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at http://www.appliedstrategy.info,  303-527-0417 or todd@appliedstrategy.info

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