BUSINESS LEADERSHIP AND CHALLENGES OF SMALL ENTERPRISES.

What is Business Leadership?

Who is a business leader?
Business and Leadership
Elements of Good Business Leadership.

Leadership is therefore a process by which an individual influences a group of individuals to achieve a common goal.
It can also be said that, it is a special personality characteristic that gives a person exceptional powers that result in the
person being treated as a leader. Leadership is being dominant, having a strong desire to influence others, being self-
confident, and having a strong sense of one’s own moral values.

Who is a leader? The only definition of a leader is someone who has followers. To gain followers requires influence but
doesn't exclude the lack of integrity in achieving this.

Leadership is an informal process. The influence of the leader can be caused by a multitude of parameters like his
personality, his personal qualities or his project. Through this, the inspiring leader causes a significant influence on his
people in a natural way without obstruction: it can be related to the superiority of his skills, his talent, his general look and
his charisma, or to respect certain traditions.

According to Meyer and al., the leader drives others by its attractiveness and leads a team towards sustainable
performance. The ability of an individual to influence, motivate, and empower others to contribute to the effectiveness
and success of the organizations of which they are members.

For more insight on Leadership, I will like to recommend a book by John C. Maxwell as I won’t be dwelling on that
tonight

Do you agree with me when I say Not every manager is a leader, but every leader is a manager? Meanwhile, given that
everyone has the capacity for leadership at some level, unfortunately, too many people lack the will to change or to
develop their leadership potential. It is often easier to “go with the flow” and be content with their circumstances. Even if
they aren’t content, many would rather complain about their situation than do what is necessary to change it.

According to Max DePree; ‘The first responsibility of a leader is to define reality. The last is to say, “Thank you”. In
between, the leader is a servant. ‘This brief guide looks at how to exercise good leadership in a small or medium-sized
business. It is not about how to become a famous, charismatic leader or a future captain of industry, but simply how to be
effective in leading your organisation. As the great business thinker Peter Drucker said, ‘No institution can possibly
survive if it needs geniuses or supermen to manage it. It must be organised in such a way as to be able to get along under a
leadership composed of average human beings.

However, it is important to distinguish the differences between a leader and a manager. George A. Bohoris developed the
idea that management is the process that is used to accomplish the purpose of the organization. The goal being that why
the structure exists. Managers are people who perform the task assigned to them. They use functions such as planning,
budgeting, staffing, controlling and solving problem. Leaders on the other hand set a direction, align people, motivate and
inspire (Kotter, 2001, 85-96). A leader is flexible, innovative, inspiring, courageous and independent and at the same time
a manager is consulting, analytical, deliberate, authoritative and stabilizing (Capowski, 1994, 10-18). By definition a
manager is not always leader but today organizations need more and more competent leader, something that is hard to
provide.

There is much discussion about the difference between leadership and management, and whether certain personality types
are more suited to be leaders or managers, but from the point of view of running a small or medium sized business,
leadership should be regarded as part of management. Good leadership is not so much about who you are as what you do
and how you do it. Anyone capable of managing a business is also capable of developing basic leadership skills.

WHAT IS BUSINESS LEADERSHIP?

Business leadership refers to how individuals make decisions, set goals and provide direction in a professional
environment. Business leadership can take many different forms, but usually involves a CEO or higher-level employees
guiding and inspiring the rest of the team. The goal of business leadership is to find the leadership model that works best
for a particular company and its team of employees.

There is always a need for strong leaders in business. No matter what your job title is, you can be a business leader if you
have the right skills. If you can show your competence as a leader and an affinity for leadership roles, you will likely be
given opportunities to use those skills to lead a team or project. Growing in your understanding of business leadership and
what it takes to be a good leader can help you become a more valuable asset in any workplace.

THE ELEMENTS OF GOOD BUSINESS LEADERSHIP

The following is a list not of personality traits but of actions that characterise good leadership. They are useful criteria by
which we can measure and improve our leadership skills.

FOCUS ON PEOPLE: Leaders lead people. Realising that the greatest asset of any organisation is its people, a leader will
empower them and help them to realise their own potential within the organisation. As Jack Welch famously said, ‘Before
you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.’
Put another way, leaders create leaders.

VISION: To lead, you have to know where you are going; and to know where you are going you have to look ahead.
Leadership means seeing future potential in the present and anticipating how it might unfold. Sometimes the potential
looks good, sometimes bad, but either way a leader will be ahead of the game planning how to avert or mitigate potential
dangers and how to seize and maximise potential opportunities. Strong business leadership involves the ability to focus on
a vision for the future. Business leaders must set strategic goals to help the company succeed and grow. One of the
primary functions of business leadership is to encourage all employees to work together to accomplish common goals.
Setting achievable, meaningful objectives and communicating them effectively to the rest of the team is one of the most
important tasks a business leader has.

KEEPING AN EYE ON THE BIG PICTURE: But leaders do not just look ahead; they also look around. It is all too easy
when running a business to be so focused on your own operation that you do not see what is going on around you. And yet
external factors such as the wider economy, technological innovation, market trends, competitor activity, and social
developments can often have a significant impact on your operation. Keeping an eye on the big picture and adjusting your
plans and activities accordingly is an important part of leadership.

SETTING THE DIRECTION: Probably most of us have heard the joke about the driver who stops to ask directions to a
particular town only to be told, ‘If that’s where you want to go I wouldn’t start from here.’ But, of course, we always start
from here! The art of leadership is not just having a vision of where you want to be in the future, but also understanding
how to get there from where you are now. In other words, leadership is about understanding and giving effective
directions.

RISK MANAGEMENT: It is said that a leader’s job is to take people where they have not been before. Leaders often
have to take risks - leading their organisation into unfamiliar territory – but the risks are always calculated and the
decisions always informed. Wanting always to play safe and not risk making any mistakes does not sit comfortably with
good leadership. As Drucker says, ‘People who don’t take risks generally make about two big mistakes a year. People
who do take risks generally make about two big mistakes a year.’

EFFECTIVE COMMUNICATION: However great a vision we might have; it is worth very little if we cannot effectively
communicate it to others. Taking the time and trouble to share your vision and your values, allowing discussion of big
ideas, and giving people an opportunity to adopt the vision as if it were their own are all essential qualities of good
leadership.

TEAM BUILDING: Another essential function of leadership is encouraging team spirit. There is a saying that if you have
a handful of dry grass you can use each individual blade to sweep a floor but it is much more effective to combine them
into a brush. In the same way individual employees working alone, however motivated they might be, are nowhere as
effective as when they work as a team.
INSPIRATION: Finally, perhaps the most important quality of a leader is his or her ability to inspire and motivate others.
In some ways all of the above serve to do this, but the most inspiring quality of all is to practise what you preach. Leading
by example is the most effective way to convey integrity, commitment, and vision – and to transmit enthusiasm and
loyalty to others. As St. Francis of Assisi put it so elegantly over 800 years ago, ‘It is no use walking anywhere to preach
unless our walking is our preaching.’

Becoming a leader means having the will to pursue a path that builds that competency and capacity. This path, however, is
not any easy one that is quickly mastered. Most scholars agree that there is no magic bullet or single set of principles or
behaviours that leads to effective leadership. Instead, it is becoming increasingly understood that the most effective
leadership style in a given situation responds to what is needed. This could be a function of the task required, the
organization's culture, the leader's subordinates, and attributes of the leader himself/herself. Furthermore, the development
of leadership is an ongoing process, not an event or the implementation of a specific program. The complexity of
leadership and its development will be dealt with at length in this book.

12 TYPES OF BUSINESS LEADERSHIP

There is no one way to be a good business leader. What you bring to the role and how you lead will be different from
someone else. There are several different types of leadership, so it’s important to choose what works best for you. Here
are some effective leadership styles to consider:
1. Authoritative leadership: Authoritative, or autocratic, leaders make decisions on their own without input from others.
This type of leadership focuses on having full control over team decisions. They may be quick to make decisions even
when the ideas aren’t popular with team members. An authoritarian leader carefully manages their team's work and pays
close attention to whether each person is meeting their expectations.

2. Bureaucratic leadership: Bureaucratic leaders set strict policies and procedures for themselves and their teams. This
type of leadership involves a sharp focus on results and performance, asserting a strict chain of command and answering
to the board of directors and/or shareholders. A bureaucratic leader creates non-negotiable processes, holding employees
to a clear set of metrics and objectives which allows the manager to track results.

3. Democratic leadership: Democratic, or participative, leaders seek out team input when making decisions. Although they
are responsible for the final decision, they also consider others’ opinions which encourages feedback, consensus and
engagement among the team.

4. Laissez-faire leadership: Laissez-faire, or “delegative,” leaders oversee projects but allow team members to make
decisions for themselves and self-manage workflow. They provide support and encouragement when necessary but do not
tell employees what to do or how to do it.

5. Servant leadership: Servant leaders focus on the needs of their teams without defining them by roles or titles.
Employees feel heard and cared for as equals. Servant leadership could result in slower decision-making since the focus is
team members first and company second.

6. Strategic leadership: Strategic leaders influence those around them to embrace a collective vision. They determine what
strategies and methods will help their company remain competitive.

7. Transactional leadership: Transactional leaders believe employees should do whatever is assigned to them and expect
them to carefully follow their orders. Rather than trying to help their team members grow, transactional leaders are solely
focused on making sure everyone is meeting their quotas or expectations.

8. Transformational leadership: Transformational leaders focus on transforming teams and companies to be their best.
They create a vision and share it with their team so everyone is working toward the same goal. A transformational leader
inspires positive change in the workplace and provides their team with the tools they need for success.

HOW TO IMPROVE BUSINESS LEADERSHIP SKILLS

1. Find a role model or mentor: Often, the first step in becoming a more effective leader is finding a strong leader to
emulate. Seek out an accomplished leader in your network and talk to them about how they achieved success. Ask about
their personal and professional goals and the path they followed to get to their current position.
2. Take a leadership assessment: Leadership assessments can help you hone your managerial strengths, increase your self-
awareness and advance your careers. They can help you analyze your leadership traits and strengths and pinpoint areas for
improvement. Familiarity with these tools may help you move your career forward. Many hiring managers use the
assessments to determine potential leadership styles or attributes for those applying to leadership positions.

3. Seek out leadership opportunities: The key to improving as a leader is often practice. Look for opportunities to hold
leadership positions in your community. This could be at work, in your church or with another group in your personal
network. Taking the lead can provide you with valuable experience and equip you for future opportunities.

4. Volunteer for more responsibility: If there are no leadership opportunities available at your workplace, you can still
show your capabilities by volunteering to take on more responsibility. This could mean offering to help with a project,
tackle a new task or even take on a new role. If you show a willingness to serve, you are likely to earn the attention of
your team's current leadership.

Challenges of Small Scale Enterprises