5 Ways Great Leadership Adds Value To Your Business

Develop your team members into big-picture oriented leaders

As business owners, we often hear of the importance of great leadership. A quick Google search will likely yield thousands of results and enough inspirational quotes to make you want to charge hell with a water pistol. And yet, you could still come away without a clear understanding of what true leadership is or how it impacts the value of your business.

In fact, many business owners think of leadership and management in the same way. However, there are distinct differences between the two. Management guru, Peter Drucker often discussed this distinction, and once said, “Management is doing things right. Leadership is doing the right things.” So, what does this mean?

As a business owner, you must remove yourself from the epicenter of your business. If your business can’t function without you, it cannot be sold for top dollar. That’s why so many business owners seek to hire excellent managers. The perception is that you can trust your business to them, and therefore, you’re driving up the value of your company. Although technically true, this will only take you so far. You see, managers aren’t always good leaders. Likewise, leaders aren’t always good managers.

Managers are great at following orders from the top and putting people in the best place to meet those directives. They’re great generals. However, managers look at your business differently than leaders do. Managers focus on projects, the bottom line, and what the business must do to succeed.

On the other hand, leaders have the ability to truly understand your business’s vision. As such, you can train them to think globally and strategically, with that vision in mind. Leaders can take that vision and use it as a tool to inspire and motivate their teams. Where a manager would tell a team member to complete a task, a leader would inspire the team member to do it because they understand that they are part of a larger goal.

Additionally, managers spend a significant amount of time addressing problems that arise in their day-to-day operations. This can leave them stuck, focusing on the present. Leaders find solutions to these problems with long-term goals in mind.

Managers, often, determine success by the numbers on the bottom line. They’re hyper-focused on profits. This isn’t inherently bad, as a business must be profitable to be sustainable. However, this is the same trap that many business owners find themselves falling into. I’ve done it, and I’m sure that you have too. You become so focused on increasing profits that you neglect the areas that add real value to your business.

Time and again, business owners devote their career, resources, and efforts to increasing profitability only to learn that their business isn’t worth what they thought it was, when they’re ready to sell. A business can be profitable without being valuable. However, when you focus on growing the value of your business, profits typically follow. Having great leaders within your organization can help you achieve both.

If you can develop your team members into big-picture oriented leaders, you’ll add value to your company. Instead of focusing on what the profits and revenues are, your leaders will be asking how the revenue or profits affect the future of the company. But how does leadership, specifically, add value to your company?

Before I dig into the meat of the subject, I’d like to clarify something. The purpose of this article is to identify the differences between leadership and management, as well as to explain how leadership adds value to your organization. That doesn’t mean you don’t need managers. They also play a key role in the operation of your company. With that said, let’s look at some of the ways leadership imparts value.

Having strong leadership that understands the vision of your business can provide clarity for the mission while keeping your team focused on the long-term goals of your organization. You cannot have good sales processes without leadership in sales. Likewise, you can’t have a good human resources department or finance department without leadership in HR and finance. Having leaders within your business departments helps all team members remain hyper-focused on accomplishing the business’s vision and goals.

It’s been said that a rising tide lifts all ships. In the same way, having leaders across every division of your company helps all team members work together toward a common goal. With all team members working together, your processes and procedures become more efficient and effective.

Great leaders create consistent and achievable expectations for your team. If all leaders are on the same page and all leaders participate in strategic planning, then all know what to expect of team members. As a result, team members are held equally accountable. Each team member knows which behaviors and what type of production are expected of them at all times.

Scalability provides exponential value growth. Strong leaders enable you to make your business scalable by creating pathways forward. As you build leaders, and your company grows, you can use existing team members to fill new roles as they arise. Then, you can hire new entry-level employees, training them organically to fill the next roles that your business needs.

Because leaders understand your company’s vision, they can utilize team members’ intellectual property. Leaders can place their teams in positions to maximize their effectiveness and efficiency. That puts your company at an advantage over other companies that don’t utilize good leadership skills.

Effective leadership drives up the value of your company. Leadership adds value to your small business. It is the supporting pillar to strategic planning. Together, planning and leadership support the other fundamental areas of your business – sales, marketing, personnel, operations, finance, and legal to drive up the value of your business.