If you examine any business— a restaurant, a car dealership, or an A/E/P/environmental firm— they all seem to benefit from active leadership. Likewise, they all tend to suffer from a lack of it. I would define “active leadership” as having a chairman, CEO, president, and/or managing partner who are involved (and engaged) in every aspect of the business. These people are still useful and earn their keep every day. They are not just investor-owners. They are not just hired professional managers. They are not just former producers who have retired on the job. The importance of this active leadership far surpasses the tangible contributions of these people in terms of what they create, sell, or manage. While those things ARE important and must be there in every case, the real benefit of active leadership is multi-faceted. Here are some of the reasons active leadership is so critical to a firm’s success:Inspiration and motivation. When the top people are actively involved in the business, they inspire and motivate the rest of the team, from the newest and youngest members to the old-timers who have been there forever. Active leadership helps the rest of the team feel good about working hard and doing the right thing. And when these leaders aren’t active, they do a lot of damage to morale. The team feels exploited. They don’t want to work. A lackadaisical attitude sets in. Resource allocation. Active leaders know what’s working and what isn’t. This helps them know what areas of their firm are worth investing in and which ones aren’t going anywhere. This knowledge helps keep the firm moving in the right direction. Inactive leaders, on the other hand, are susceptible to undue influence from those who are the best salespeople or those who are the best brown-nosers.Connection with the market and specific client needs. Active leaders are involved with clients— selling, doing, and collecting money— and this helps them stay in touch with their real needs. They can then design their firms to meet those client needs. Inactive leaders are cut off. They rely on reading, or others in the firm who may not be best able to ascertain and communicate client needs to the rest of the firm. I have seen inactive leaders support the wrong kinds of business development activities and waste a lot of time and money. Knowledge of the team and who is contributing/not contributing. Active leaders know who is worth keeping and who needs to go. They know who deserves more pay and responsibility and who is over their head. They know who is worth investing in and who to listen to. Inactive leaders are disassociated with the team. They are more inclined to judge people based on their looks or very brief encounters with them. This can lead to some bad decisions about the people in the firm. I have seen inactive leaders invest authority in the wrong people and destroy their companies as a result. Continuity of leadership. Active leaders are likely to be happier in their jobs. They know that they are contributing and their firms are depending on them and that’s very satisfying. And that’s why they last longer in the job. That continuity of leadership is good for the firm. Inactive leaders, on the other hand, don’t like their jobs. They probably are full of self-doubt. And in any case, the rest of the firm will likely determine that the inactive leader is not carrying his or her weight and demand a change. High turnover at the top is usually not a sign of good organizational health. How does your firm stack up in terms of having active, involved leadership? And more importantly, how active and involved are you in your firm? If the answer is anything less than 100% commitment of your time and energy to this business, maybe you should consider the long-term ramifications on the rest of your company.Originally published 7/10/2006
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