How To be An Effective Managing Director (or CEO)
Here at Office Supermarket we've decided to write this post to help others looking to grow their business to become a better, more effective Managing Director. Based on the encounters we have experienced so far we want to enable others to lead their business to even greater success both online and offline.
Building a successful business is hard these days especially juggling the day to day activities whilst at the same time finding the time to keep up to date on new markets, competitors and online marketing techniques!
Being an effective Managing Director (or CEO) for your business can make a world of difference – if you don't have these skills then it might pay to to recruit an experienced MD into the business that can bring proven expertise especially if you are targeting new product sales or markets.
Ask yourself 3 questions:
- Does it feel that you are frantically doing things but in reality getting nowhere?
- Is your business standing still and missing out on new opportunities?
- Should you be looking at new markets for the future growth and longevity of your business?
If you are not able to move forward and evolve your leadership skills to make sure your company grows then you need to consider if you being Managing Director is the right decision for the longer term success of the business.
To help you become a more effective MD (or CEO) we have listed below a few tips that can help you – we have also asked 2 very dynamic MD’s to give us their thoughts based on the experiences they have had running their businesses and growing them successfully in a recession.
Recognise other people’s efforts
When we are busy it is all too easy not to acknowledge the positive contribution made by your staff. This can lead to unmotivated staff and ultimately have a negative impact on the overall success of your business. When giving recognition and praise make sure it is:
- given frequently but don’t overdo it so it loses it’s effect!
- varied – so as not to sound dull
- honest and sincere – don’t recognise someone’s effort if its not much of one
- about the person and THEIR work
- timely – recognising somebody’s effort 3 weeks after the event is pretty much a wasted effort
Ensure your staff know you have an open door policy and that you are a great listener (especially for new ideas). Your employees need to know they can approach you, the worst thing you can do is lock yourself away from the rest of the team. As the company grows it is practical that management structures are put in place but these can take you further away from your staff. Make sure that they do not become a barrier to communication and interaction with the rest of the team - they still need to feel that they and their efforts are valued and that ultimately they can come to you if needed.
Be organised and in command of company affairs
To be seen as a good business leader you will need to show both your board, employees and even customers that you can serve the company well. Your role is not to be directly involved in every element of the business but you should be able to demonstrate that you are aware of all of the different elements and in overall control of what is going on. This will lead to greater confidence in you and that will have a positive impact on the business as a whole.
Be Tough and Decisive but…
Using your authority effectively will increase people’s respect in you as CEO but you will need to combine this with a caring approach – this is tough when you are required to make a decision that will not please those around you but better serve the company’s long term interests. As with many difficult decisions in life it is not so much about the actual result (after all most people realise that in business today difficult choices sometime have to be made) but the way it is dealt with that can make all of the difference and help you stand out as an effective leader.
Use your position in the right way
At the end of the day as a Managing Director of a business you do have a responsibility and position which is not the same as others within the company. You need to use this position in the right way to make sure you are seen as a leader. Whilst approachability is important you need to balance this against the position you hold - at the end of the day you are no longer one of the lads and they need to feel confident that you are taking your position and responsibilities seriously. This can be simple things like sitting at the head of the boardroom table or having your own office – whilst these symbols of status within a business can be seen nowadays as a bit archaic they do help to give everyone confidence in your ability. Don't forget about them in an attempt to be seen as one of the gang as in the long run it won't help.
Build a Reputable Profile
As an MD you should learn to handle the public stage – if you are not already comfortable with it! Build an enviable reputation in your industry, be happy making press comments (get training if you are not) and speaking at seminars. As Managing Director you are part of the external brand of the company and your employees, customers and others in the market will see this as a positive addition to the overall company.
Don't be afraid to develop your own skills
Good business leaders always look to build on their expertise both as managers and as people who understand the greater technicalities of their business and/or wider industry environment. Training and Development should not be something only focused at your staff. Employees who see an MD developing not just the business but their own skill set are more likely to want to improve their own skills in order to provide a better overall performance which will serve the business better in the long term.
Set and Clarify Objectives
All effective Managing Directors must have clear, specific objectives about what they want the business to achieve and how they will go about realising them. If a CEO couples that with a totally passionate belief this will exert a natural positive influence on everyone else in the business. Those objectives and plans should be communicated to the rest of the company to make sure everyone buys into the vision and can see where things are going - there is no point having great plans for the business if no-one knows what they are as it will take everyone working together to achieve them.
As mentioned above regular communication with all of your employees, customers and stakeholders is key to a successful business. Just because you are the MD of the company doesn't mean you should delegate all communication to others in the business.
Success feeds Success
As MD you must be confident in your abilities and work to help increase the confidence of others around you. Good business leaders always show an optimistic outlook leading to greater success for both themselves and the business.
Balance vision with attention to detail
Probably one of the simplest to say but hardest to do in reality but it is very important for a Managing Director to know when to focus on the big picture and when greater attention to detail has to be given. A CEO that can only focus on one or the other can be a recipe for bigger issues for the business in the future.
Inspire those around you
Good Managing Directors inspire the staff around them. Leading by example and utilising the different elements already identified will help you to inspire your staff, get them to share your vision for the company and most importantly help the business achieve it.
Great leaders cultivate good leaders
Finally, a great leader understands that they cannot achieve everything they need for the business alone. They need others to take on leading roles within the organisation if it is to truly achieve success. Promote and help members of the team to grow and develop into leadership roles within the company. The benefits will be great.
We hope you found the tips above useful, to help put them into perspective we have asked for some additional pointers from 2 effective Managing Director’s. They have not only shown they have the ability to successfully grow their companies but are also highly respected by their staff and customers.
The first is Sue Tumelty – Founder of The HR Dept, provider of HR Services to SME’s:
So Sue, in your role of helping clients with their HR what is the most common mistake you find Managing Directors make?
Finding solutions without looking longer term. For example their payroll clerk leaves and they immediately replace like for like without exploring outsourcing. Knowing where you want to be in five years helps plan your staffing and allows time to develop them.
What 3 strengths should a Managing Director have to lead their team?
Passion for their brand. The ability to provide strong decisive leadership so that staff will want to follow. Vision.
What 3 weaknesses should a Managing Director take steps to avoid?
Not delegating and micro managing.
Complacency and not reacting to markets quickly enough.
Not developing their staff.
In your experience how does someone become an "MD" - training, experience, practice etc
Unfortunately it is often nepotism! Some people develop their career with this in mind so move around to build experience in a chosen field.
Karen Dunn-Squire, Managing Director of Elation Sales, also took the time to give us her insights into being an effective Managing Director:
Most of my work involves working with non-sales professionals and so they typically are not used to managing people who are required to hit certain performance standards. Therefore not setting clear goals and targets for their team is a common weakness. This means that the team never understand the expectations of the business and therefore don’t meet the requirements.
What is the key challenge facing Managing Directors in the UK today?
Trying to become jack of all trades and an expert in all of them. A great MD has to be really strong at managing and overseeing. They need to have a good level of understanding in all areas of business but they cannot expect to be expert in all of them. Being able to appropriately delegate and outsource specific tasks to the right people so that the fine details get managed well is key. Commonly I find that MDs are resistant to invest in the right skills because the economy is challenging but trying to allocate expert tasks to people without the right experience is a false economy.
What is the most enjoyable part of being an effective MD?
Being in control of my own destiny. If there is a something about the business that isn't right I can change it tomorrow. I can respond directly to the needs of my clients and my staff and we really do achieve constant improvements.
Name one thing a Managing Director should take steps to avoid?
Creating a negative culture in their business, they need to create a team of people who are positively connected to the business goals and motivating them to achieve is key. Allowing negativity to fester in your business is the quickest way to fail.
It is certainly the case that not everyone is a born leader but with training, experience and practice they can become a good CEO/MD of a business. Where the role of Managing Director just isn't for that person then it is still important to improve their leadership skills for the benefit of the business itself and then look to recruit an MD or CEO that does have the ability to help take the company forward.
So what are your thoughts on being MD? Please share them, we’d love to hear from you!