Learn to Lead

As businesses grow, owners desire to promote one of their employees to a manager. This blog post outlines the five transformations every worker must make to become a great leader. Until employees master each transition successfully, they’ll fail when given a chance to lead.

Value of Leadership

When you’re hired as a worker, you’re judged by your productivity, work ethic, and the quality of your work output. It’s normal to develop the thought that workers are doing all the work and management is sitting around getting paid a lot of money to do nothing. Let me illustrate why this is wrong thinking by highlighting the earning power of three different business sizes.

Solopreneurs

The small solopreneur will tell you they struggle to make any money. They do their sales and deliver service to their customers… often making less than $20,000 annually. Guess what? The solopreneur has no managers and manages no one. So, if managers offer no value, why isn’t their productivity through the roof?

Small Business Owners

Small business owners hire and manage their employees but still struggle to earn over $50,000 per year per employee.

Large Businesses

Large businesses earn, on average, $270,000 per year per employee.

The uninformed will look at these numbers and think big businesses must be corrupt. The truth is that big businesses value and invest in leadership training and structured management. A good leader produces ten times the income from a team than what each team member produces on their own. Understanding the value of leadership is necessary for employees who will take on a leadership role. Otherwise, they will be apathetic leaders expecting their workers to work while they get higher pay doing nothing.

Personality Differences

The second transition point is understanding personality differences. We all have different personalities… and they are all grand. Unfortunately, many new leaders have no clue how to manage personality conflicts.

Four letters make up the Myers-Briggs Personality Profile. The first letter is an I or an E for Introvert or Extrovert. The second letter is an S or an N for Sensate or Intuitive. The third letter is a T or an F for Thinker or Feeler. The fourth letter is a J or a P for Judger or Perceiver. I don’t want to get too deep into the Myers-Briggs system. You can learn much about yourself and others by understanding your personality profile better. My point in this post is that team members have a mix of these letters and personality profiles. All these personality profiles are highly valuable if you know how to communicate and leverage the strengths of each personality type.

A new leader values their style and devalues their opposite, creating lopsided favoritism in their team. If they can understand the advantages of other personalities, they can adapt and communicate much better with their team. By leveraging these differences, they can start creating the value of leadership I just described.

Team Building

The third transition point is the ability to build a high-performance team.

Let’s say that you’re a small restaurant owner. You have ten people working for you, five in the front-of-the-house (servers, hostess, etc.) and five in the kitchen (cooks, dish washers, etc.). You’re overwhelmed with managing all ten of these folks. You want to promote one of your kitchen staff to lead the kitchen employees and one of your front-of-the-house staff to manage the other five.

If you pay each employee $10/hour. This means a total of $50/ hour for the front: and $50/hour for the kitchen. Your total payroll is $100/hour. If you promote two of your employees to managers, you’ll have to pay your managers more, and you’ll need to hire an additional staff member to backfill the work those managers used to do as workers. If you pay your managers $15/hour, your total payroll will jump to $130/hour (a 30% increase). It’s not the kind of growth you were hoping for. Right?

You think you can increase your staff’s productivity if your leaders can create the 10X productivity that we talked about in the Value of Leadership, right?

While the productivity increase will happen, it won’t happen right away. There are four stages of team building: 1) Forming; 2) Storming; 3) Norming; and 4) Performing. You won’t achieve higher productivity from a team until you reach the “performing” phase of that team.

Suppose your restaurant earns $40,000 per month in revenue, and it takes you a month to complete each stage of the team-building process.

In the forming month, you will increase your payroll costs by 30% and decrease revenue by 10%.

It gets worse in the storming month. Your costs still increase by 30%, but your revenues drop by 30% with your fighting staff.

In the norming phase, revenues return to normal, but staff costs are still 30% higher.

Finally, in your performing month, you see a 50% increase in revenue with a 30% increase in staff costs.

Many business owners experience the pain of the first three stages and give up. They never get to experience the improvement in productivity from a high-performing team. This team-building process is restarted every time a new employee is hired or an experienced employee leaves your team. The good news is that each stage shouldn’t take a month if your leader has been trained and can move his/her team quickly to the next stage.

Transitioning from Expert to Manager

The fourth transition point is having your expert workers transition to managers.

In unskilled companies, workers are often eager to take on more responsibility as managers or supervisors of staff. In skilled companies, the opposite is true. If you’re a dentist, you went to school for a long time to learn dentistry. You’d rightly resist if someone were to promote you to manage other dentists. This is one of the reasons that skilled companies often grow as partnerships of multiple skilled professionals who continue to do most of the skilled work.

At some point, even skilled professionals must transition to a leadership model to continue to grow. To lead in a skill-driven business, the leader must:

1. know the skill being practiced,
2. motivate their people, and
3. expand the benefit of their profession through the work of others.

It’s this third item that is the obstacle for most skilled professionals.

I’m an engineer. While I’ve managed groups of salespeople, construction managers, and other engineers, I’ve always considered myself an engineer. I love engineering and knew that the engineers I hired had to become more proficient than me at engineering if our engineering firm were to grow. I switched from doing engineering to creating engineering systems that supported my engineering staff and then trained and empowered my employed engineers to continue the work I started. Ultimately, we created engineering systems that were several times more efficient than our competitors. We turned our engineering efficiency into corporate profits.

Creating a highly effective engineering firm was much more fulfilling than doing individual engineering work.

This transition must be based on a desire to make big things happen that you could never accomplish alone. If you don’t have this desire as a skilled professional, you should stick with your practice.

Energy Leadership

The fifth transition point I want to cover is attitude or motivation.

If you have a poor attitude, it isn’t easy to accomplish and can lead to damaging the people you lead.

We Core Energy Coaches™ use a different term for attitude… we call it “energy.” I’ll quickly walk you through five different energy levels or attitudes I use as a Core Energy Coach™.

The first level is “victim”. In victim thinking, leaders think they are sandwiched between customers and their employees. There’s no way out. With this attitude, you’ll complain about outside influences as excuses for why your team is failing.

The second level is “conflict”. In conflict thinking, you compete with other managers or other companies. You’ll fight with team members. You think your way is the right way, and anything else is wrong.

The third level is “acceptance.” This is a peaceful but complacent state. To keep the peace, you avoid disciplining failing team members.

The fourth level is “compassion.” Your team members know that you care about them. In fact, you care about them so much that you may sacrifice your team’s mission for the care of individual team members.

The fifth level is “opportunity”. You’ll be an extraordinary leader if you can stay at this level. In opportunity, you constantly reconcile differences. You look at conflict as an opportunity. Your team will continue to engage and grow at this level.

There are two more levels, but I think you get the point.

Attitudes are not like personalities. A personality is a framework you’ll have for the rest of your life. An attitude can change over time. The first two energy levels (victim and conflict) are damaging reactions to your environment. A leader cannot be a reactor. Instead, they must be a positive influence on the attitudes of their team members. The other three levels that I described are proactive. The higher your energy level, the more proactive of a leader you will be.

All energy levels are contagious. If you’re proactive, team members will mimic this attitude. Likewise, your team may be stuck in the storming phase if you’re reactive.

Leadership Training

There you have it. The five transformations every worker must make to become a great leader:

I have created an online training system called Leadership Matters that trains each of these principles. This self-paced program helps employees understand the value of leadership and how they can prepare themselves to do the work of leadership. 

This post is available on the MMBIZCAST podcast on Spotify if you’d prefer to listen rather than read.