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Author name: Sara Pantaleo

why small business fail

Why Small Businesses Fail

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Studies have shown a high percentage of small businesses fail in their first year and up to 50% by year five.  70% of small businesses don’t make it past ten years.

Some Reasons why small businesses fail

1) Lack of leadership – No vision and purpose

Setting a clear vision and purpose gives you a guiding light and clear road from who you are and where you want to go.

When you don’t have a clear vision, creating the path to success is challenging, like not having a rudder.

2) Market research and niche –  do not know who the ideal client is

Not knowing who your ideal client means that you will try to attract and serve everyone.  This is like using a fishing rod to catch a shark, and you will not catch anything.  The clearer you are about your ideal client, the higher the chance of reaching the people you want to serve.

3) Poor management and planning

Setting clear strategic goals and business plans aligned with your vision will ensure you can develop precise financial forecasts around your ideal client.

Your plan sets out where you are, where you want to go and how to get there.  Ensure your goal is realistic and executable with the resources you have.

small business failure

4) Marketing

You need a clear marketing plan identifying how you are going to attract your prospective client. You should also have a marketing budget and track the return on investment for each channel to know what is working and what is not.

5) Lack of making decisions or no action

You have to get things done. But, don’t get so caught up in the process and become unable to make decisions.

Anything that prevents you from executing will lead to failure. At some point, you have to decide and move on. It’s better to make a decision and not get it perfect than not acting.

6) No commitment to innovation and continuous development

Successful business owners are constantly looking for new and better ways to serve clients and develop new opportunities.

They research and become aware of the latest trends. As a result, they are continuously innovating and finding new ways to be more efficient and increase productivity and stay abreast of changing consumer behaviour in their industry.

7) Knowing how to sell and follow-up

Lack of follow-up is a definite way to lose clients and not get referred to new ones.

Have a clear process on how you will be attracting new clients and the following up—making phone calls, responding to e-mails, or delivering a product or service.

Make sure that you track that you are delivering on time. Creating long-term customer relationships and building trust comes with knowing when to follow up.

 

why mall business fail

8) Poor governance and consistency

Setting up structure, systems and processes, areas of accountability are critical to achieving your strategic goals.  Some of the governance in business is to comply with laws in your industry, but small businesses in a partnership should consider strong shareholders agreements. If in a family business, a family business charter.  Other considerations are separation of duties and authority to mitigate risks and being prepared—good crisis planning to anticipate the impact of external factors, such as regulations or global trends.

Consistency is also essential. Many years ago, I learned that giving an excellent experience sometimes and a poor one sometimes creates doubt in the customers’ minds.  So, it is better to provide a great experience all the time and commit to consistency.

It takes time to attract and nurture customers to build your business. So, it is best if you were committed to tracking and acting consistently to deliver the experience that will make and keep customers.

9) Do not understand or track financial performance

Setting budgets, cashflow forecasts and financial metrics and measuring your performance is vital to know where you are so that you can make solid and informed business decisions

A small business must set sales targets and understand the reasons when you do not achieve them.

As well as revenue and profit, you should know what is happening to cash flow and forecast according to peaks and trough cycles and understand the gap between paying suppliers and receiving funds from your customers.

Other critical financial metrics are the cost of goods, employee costs, operational expenses, debtor payment days and creditor payment days.

You must work with your accountant to set these up correctly and be consistent on how and when you measure so that you can see trends developing and you can act quickly.

small business success

How can small businesses succeed

So, success in small business is not by accident, but it is by planning and design. If you are starting, ensure that you do your research, plan, set your financial and non-financial goals and what success looks like if you achieve them.  Start with good governance from the beginning.

So, if you are a successful small business, make sure you celebrate your successes and review your strategy, vision and purpose regularly to check that it resonates with the right here and now and into the future.

At the moment, one of the most significant focuses in society is climate change.  Will your small business be ready?  What research and analysis have you made in your business to ensure that you are planning for the future changes that deal with the impact of climate?

Showing leadership, setting a clear vision and strategy, strong governance and tracking performance, taking action and executing leads to small business success.  The key is not to stand still and continuously evolve in line with your business growth to meet your customer’s needs of the day.

Why Small Businesses Fail Read More »

How do I find my Purpose?

How do I find my Purpose?

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How do I find my purpose in life?

Part of finding your purpose is by knowing what role you can play in changing the world.

Some of it may be the fundamentals of your belief system, some of your journey in life.   What you believe and what you want to manifest in the world.

It is essential to be realistic and set priorities, and ask yourself what you want people to say about you as they look back on your life.

One exercise is to write your eulogy and highlight your virtues.

Then determine which values are important and what is not negotiable.

How to find purpose in business?

Finding the purpose in business is very similar.

People want to engage with brands and people that are aligned to their purpose.

Defining a robust and shared purpose for your organisation is vital for business success, and it needs to be more than just building profit.

Business leaders need to have a clear vision for the future and inspire others.

Create a reason for being and to exist, a clear purpose.

Having a strong sense of purpose can define the culture you want in your organisation and guide your decisions.

Purpose sets your compass, a guiding light that gives employees a clear sense of how they should do things every day.

The purpose will make the work more meaningful and fulfil the human need to contribute to something bigger than self.

Some of the questions to ask while determining your business purpose are:

  • Why did you create your organisation?
  • What inspired your business idea?
  • What problem is your organisation trying to solve?

Simon Sinek, in his 2009 TEDx Talk, talks about the three layers to your business story, ‘The Golden Circle:

  1. The What
  2. The How, and
  3. In the centre – The Why
AffariSP Purpose Golden Circle
Golden Circle

All organisations know what they do in the products they sell or the services they offer. This is also articulated as the organisation’s Mission statement.

Only some organisations have a clear way of how they do it.  The values set them apart from their competition, but few organisations know why they do what they do.

This is because setting a purpose is not about making money. It’s about a belief and the reason why the organisation exists.

He talks about human behaviour and suggests that we talk to the part of the brain that controls feelings and behaviours by communicating from the inside out.

This creates loyalty and sells to people that believe what you believe.  The same goes for your employees. They will excel if they believe what you believe.

Having the best minds and most technical people who communicate from the outside in, you will have all the statistics and facts but not the emotion.

People do not buy what you do; they buy why you do it…. Simon Sinek

Organisations must have a clear picture of where they want to head and a future position when they succeed.  This can be articulated as the organisation’s Vision.

If everyone in the organisation is aligned to the purpose, it acts as a guiding light and the filter for setting business strategy.

You define your purpose by determining what is important to you and the organisation, and you must make it about the people you want to serve.  This cannot be about money.

Then determine the values on how you want to do it.

What are some of the factors to finding your purpose in business?

  1. Involve your team
  • It is vital that if you are working on your purpose after the business has already been established to involve your team and organise a planning meeting to ask the key questions about your business:
  1. Why do we exist?
  2. What do we do?
  3. What are we great at?
  4. Why do we stand out?
  5. What do people say about us?
  • Make sure that you are not closed-minded, listen to all the perspectives, and be realistic about your organisation. Sometimes the most valuable insight comes from the people in the front line serving your customers.
  1. Get some external perspectives – this will bring a fresh outlook and objective feedback. Organisations find it helpful to use a consultant to help facilitate the day
  2. Make sure the message is in line and resonates with your customers. Make it customer-centric.
  3. Be inspirational and aspirational. These words will become your compass and will guide your decisions in the organisation
  4. Bring people on the journey. Roll out the message to the entire organisation and public to bring it to life.  Align it to everything you do by:
    • Once you find it make it stick
    • An organisation’s true purpose is much more than a statement on a wall or website
    • Your internal behaviour and actions need to be aligned
    • Your brand and image must be aligned
    • People need to feel it, touch it and be part of it

What happens once you have found your purpose in business?

Once you have articulated your purpose, it’s time to make it a reality.  Build trust and make sure all your team is truly committed and aligned.

Culture eats strategy for breakfast…Peter Drucker

Peter Drucker says that culture is the secret sauce that keeps employees motivated and clients happy.  A clear purpose should help create clarity, and executing realistic strategies will boost productivity, performance, and bottom-line success will follow.

So, in my opinion, get your purpose right, determine your value system and set the future aspiration for success, but you must develop some realistic strategies and execute them; otherwise, it’s all a waste of time.

It all matters, Purpose, Vision, Mission, Values, strategy and execution. It’s just a matter of ensuring you set the culture first, then the priorities and then act.

So, the key is to take action and never standstill. Business success is about being able to service the customer of today. This keeps evolving, so it’s crucial that you also set a date to review and assess regularly.

Affarisp Purpose Vision Mission Values Strategy and Action Plan
Purpose, Vision, Mission, Values and Strategy Pyramid

How do I find my Purpose? Read More »

The powerful, inspiring women leading family businesses

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When I first joined the family business, I found it very difficult to break through the sexism and invisibility of being a woman in a male-dominated industry.   Even though I was developing and improving the business, I was seldom acknowledged in the early days and treated like a little sister.  Not just from my family members but also others who were working in the business.

It took many years to get recognition, and I had to work a lot harder, build trust and prove myself at every stage.  All this while creating my family and all that came with that.

How women are seen in the family business

So, I found it interesting when I read a KPMG article in 2020, following a survey of family businesses that talks about women in the family business as having hidden roles and being designated as the ‘chief emotional officer’ in some situations. However, women took more of a support role in keeping the family together instead of leading the family business.

I am happy to say that there are a growing number of women leading their family businesses and not in any way invisible.

I had the privilege to have a close look at some of these inspirational women leaders in the family business as part of a project I have been involved in this year.

These women are not in the background, but they have broken through the stereotype of the traditional male-dominated head of the family business.  They have founded the company, or they have taken over in the succession of their family business.

They have successfully broken down the barriers and are redefining leadership in the family business.

Challenges for women in the family business

Most of them cite their primary challenge as the male family members putting barriers and not trusting that they can do the role in male-dominated environments.

The consistent trend I read in their submissions is that they have transformed their family business into achieving high financial performance and innovation. In addition, they implemented a transformational leadership style to create an inclusive and diverse workplace.

They have in common that they succeeded despite the barriers while having families and building inclusive teams with a sense of belonging.

These women showed immense resilience and grit to succeed. Yet, they had to fight for their place.

Embracing and supporting women in the family business

In the future, we need to be aware and cautious that all women are given the same opportunities as their male counterparts and not miss out on women’s contributions because they do not think the fight is worth it.

I know in my own experience, I sometimes questioned if it was worth it.

The risk of not embracing women in family businesses may mean the end for the company.

Celebrating women leaders in the family business

So, I want to give tribute to all the female leaders in family businesses and encourage all organisations to embrace all they have to provide and support them to succeed and remove any barriers in their way.

I want to share some of the quotes from the inspirational women I had the privilege to review.

A woman as a business leader

My strength and courage to fight for change, to show those who came before me that there is nothing to fear from this new approach, have driven growth and secured the business for future generations

A woman overcoming challenges in the family business

I’ve fought constant resistance and been required to prove my worth time and time again.  Courage has been essential to my success both as a leader and a woman in the business

Supporting women in your family business

I have ensured that flexible working hours and days are core to the business. It doesn’t just make good moral sense, but it makes good business sense

I have coached and built the women in leadership in my business by providing a leadership pathway and funding the furthering of their learning and experiences

The powerful, inspiring women leading family businesses Read More »

Crisis Management Planning

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It takes 20 years to build a reputation and five minutes to lose it..Warren Buffett

 

What is a crisis?

A time of intense difficulty or danger?

So, in business, a crisis is related more to a significant adverse event with possible reputational damage.

An out-of-the-ordinary event, disclosure or set of circumstances, real or perceived, which seriously threatens safety, disrupts the activity or negatively impacts the reputation of a business or customer patronage.

It will not matter whether it is real or perceived.

Types of crises

Most importantly, are you aware of all the different types of incidents that could threaten your business and reputation?

A crisis, which can last from a few hours to several days or longer, needs decisions to be made quickly to limit damage to an organisation.

Types of crises can include natural disasters, accidental or intentional human-caused events, and technology issues such as cyberattacks.

Why have a crisis management plan

A crisis management plan will detail all the organisation’s risk areas and respond in a critical situation that negatively affects your organisation.

A crisis management plan allows an organisation to act quickly should an incident occur, with well-documented responses to potentially critical situations.

An effective crisis management plan will include:

  • criteria used to determine if a crisis has occurred
  • monitoring systems to detect early warning signals,
  • contingency actions
  • list of emergency contacts
  • specify who will be the spokesperson in the event of a crisis
  • strategies for everyone to know their role during and after a crisis

Having a plan will not avoid an incident but will minimise the impact of adverse reputation outcomes and guide how to manage and recover from incidents.

Right, now is a great time to prepare a crisis management plan and be ready for the recovery of COVID19 and have contingencies to deal with the employee well being and any matters arising from bringing the team back to the office.

Recovery is more clear with a crisis management plan.

As a result, after a significant adverse event, a crisis management plan could be the difference between your organisation being left vulnerable by highlighting the organisation’s and systems weaknesses or coming out more resilient.

Thus, leading to enhance the organisation’s capacity to retain its state and function despite external disruptions and adapt and transform from these events and be better equipped to undergo future changes.

 

 

Download – Steps to create a crisis management plan

Crisis Management Planning Read More »

Franchising is like a marriage

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Will the new changes to the Franchise Code ensure more franchisee success?

A new Franchising code was released on the 1st of July. The new fully updated Code Legislation can be downloaded!

More disclosure and a stronger contract will not guarantee franchisee success. Instead, a strong business model, passionate franchisees, and a strong relationship between the franchisor and franchisee benefiting both parties’ needs.

I have been working in franchising for over 20 years.  I was CEO at La Porchetta for fifteen of those years.  La Porchetta began with one restaurant in 1985 and worked hard to get the formula right before opening a second restaurant five years later.  At that stage, franchising was a relatively new business model, and the early pioneers were pretty much starting from scratch to put the suitable business models in place.  At every stage, however, there was a long-term vision in mind. There was a commitment for the long haul.

One of the most important things I’ve learned along the way is that a franchised business has to be sustainable.

In this time, I’ve seen many companies grow quickly for five years or so and then implode.  Having a great model is a start. However, the best way to ensure the longevity of your business is to have the right systems in place with strong recruitment processes and a culture that nurtures the relationship between franchisor and franchisee.   In most cases, franchise businesses that did not make it didn’t pay enough attention to support and the importance of sense checking the franchisee sentiment along the way.

Building a solid framework for sustainable growth means putting systems in place where both the franchisor and the franchisee have profitability and alignment.  Some of the procedures required are not just about financial metrics; nurturing the franchise relationship is equally important.  Otherwise, in the end, everybody loses.

An open and transparent relationship with franchisees is crucial.

A strong relationship is the only way to keep a business healthy and vibrant.  I think of it as a kind of “courtship and marriage” where we get to know each other in the early days and then work hard to create a great relationship where everyone puts in the very best they can.

Franchisees must understand the business they are entering, alongside getting professional business advice to understand the investment clearly. Still, more importantly, franchisees need to be clear on what the commitment will be and the alignment of their values and personal goals.

Some of the franchisee failures that I have seen are not because the franchisee did not understand the legal document but because they did not understand the commitment required to run the business.   Although there are many franchise models to choose from when investigating where to invest, franchisees need to understand what will suit them best and the passion they have for it.

Franchisors need to have robust franchisee recruitment and induction process, where franchisees are clear on what it means to be a franchisee with their brand and the commitment required to succeed.

It may mean that the franchisor says ‘no’, more often.

Saying ‘no’ to prospective franchisees early in the process may mean slower growth.  However, recruiting the franchisees more aligned and ready for the commitment will be more sustainable and lead to more successful businesses.

Along the journey, it is also vital that both franchisors and franchisees re-assess the relationship at least annually and check that it is still working.   I have seen many instances where a franchisee stayed in the brand too long even though they were no longer aligned or passionate about the business.

Succession planning should be discussed openly so that a plan that works for both parties can be devised.

Like in a marriage, if the franchisor and franchisee do not nurture the relationship, it will end badly.

Ciao,

– Sara Pantaleo, Affari SP Founder

Download Franchise Recruitment  Roadmap

Franchising is like a marriage Read More »

Cash is KIng

Cash is King

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So it’s the end of the financial year, and your accountant reports your business has a nice profit.  You are surprised and tell them you cant understand as you have no money in the bank and don’t know how you will pay the taxes on the profit.

According to a report released by ScotPac in its latest, SME Growth Index 72.5 per cent of small business reported having cash flow problems.  Small businesses with limited financing must focus on earnings and pay attention to cash flow, the actual money resources used to support operations.  What does this mean, and how can business owners track?

Cash Flow and Profitability are Not the Same

Although closely related, cash flow and profitability are different. Cash flow represents the cash inflows and outflows from the business. Profitability represents the income and expenses of the business.

Think of cash flow as transactions that affect your business “Bank account” and profitability as items that impact your “income tax return”.

Cash inflows and outflows show liquidity, while income and expenses show profitability. 

Liquidity = Can I pay my bills?

Profitability = Am I making money?

Cash Flow-Positive vs. Profitability

When your business is cash flow-positive, it means your cash inflows exceed your cash outflows. Profit is similar: For a company to be profitable, it needs to have more money coming in than going out.  So, when you see that you have more receivables than you do payables, it can be easy to assume that your business is making a profit. But that’s not always the case.

Your business can be profitable without being cash flow-positive

You can have a positive cash flow without actually making a profit.

Here’s how to see if you’re cash-flow positive:

Many businesses use accrual accounting, which means your revenue and expenses are recorded, regardless of whether or not cash has been exchanged.

For example, let’s say you send out an invoice for $1,000. This $1,000 will be recorded on your profit and loss statement as a profit—even if you don’t receive payment for said invoice right away.

This difference is critical when your bills come up as due. If you’re still waiting for payment on that invoice, you may not have enough cash on hand to cover the costs.

  • Not having the cash makes you cash flow-negative.

Since profit doesn’t tell you exactly when money is coming in and going out of your business, you will still appear profitable on paper, even if that isn’t in the bank for you to use.

How to Calculate Your Cash Flow

To calculate your cash flow, you have to know how much money your business starts with on the first of the month.

Your “cash on hand” should include precisely that—the cash you have on hand that is readily available to use.

Once you know how much you’re starting with, you’ll subtract all your operating expenses, investment activities, and financing activities.

  • Cash flow will not include any unpaid debt or outstanding invoices.

Let’s say you have five customers and you send five invoices every month.

Let’s also assume your average invoice value is $2000, and your payment terms are NET21 days.

We’ll assume your Cost of Goods Sold (COGS) is 50% of your billed amount and that your operational costs are flat at $3000 per month (including rent, employees/contractors, insurance, etc.). In this case, your cash flow chart may look something like this (not taking into account prior balance or actual cash on hand, for simplicity):

Example: Cashflow Calculator

Cash Flow Chart Month1 Month2
Issued Invoices 5 5
Value Per Invoice $2000 $2000
Paid Invoices 0 5
Booked Revenue $10000 $10000
Actual Income $0 $10000
COGS -$5000 -$5000
Operational Costs -$3000 -$3000
Monthly Net Profit $2000 $2000
Monthly Cash Flow -$8000 $2000
Running Cash Flow -$8000 -$6000

If you sent that $1,000 invoice out, but it is yet to be paid, you will not count it as a cash inflow. Instead, you’ll mark it as “collections or accounts receivables” until the invoice is paid.

Or, let’s say you purchase something with a business credit card but don’t pay it off right away. The balance you owe on your card will not count as a “cash outflow” until the debt is paid.

After your calculations, your cash flow is positive if your closing balance adds up to be greater than your starting balance. If it adds up to be lower, your cash flow is negative.

Which One Is More Important to a Business Cash or Profit?

When determining which one is more important, it depends on the business and the circumstances.

For example, a business may see a profit every month, but its money is tied up in hard assets or accounts receivable, and there is no cash to pay employees.

A business may see increased revenue and cash flow, but there is a substantial amount of debt, so the business does not make a profit.

The absence of a profit eventually has a declining effect on the cash flow.

An unprofitable business that is cash flow positive will have a hard time remaining positive for long.

Cash flow is what keeps the lights on

In short, profit can show you how successful your business is, but it can’t tell you if your business has the money to survive long-term.

Ciao,

– Sara Pantaleo, Affari SP Founder

Cash is King Read More »

Leading Diversity and Inclusion in the workplace

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Does Diversity mean better performance?

In the last few months, there has been a lot of news about gender issues and how our Government has handled complaints by women for serious alleged incidents.

Many private business leaders were horrified and I have heard many say, ‘This would never be tolerated in private business!’.

We have strong laws in this country that regulate Occupational Health and Safety, but I have seen many workplaces that have zero focus on Diversity and Inclusion (D&I).

Diversity is generally defined as acknowledging, understanding, accepting, valuing, and celebrating differences among people with respect to age, class, ethnicity, gender, physical and mental ability, race, sexual orientation, spiritual practice, and public assistance status.

The latest McKinsey report, ‘Diversity wins: How inclusion matters’, found that the most diverse companies were more likely to outperform less diverse ones on profitability.

In actual fact, they state that the greater the representation in the workforce, the higher the likelihood of outperformance.

The five areas of action the report highlighted are:

  1. Ensuring the representation of diverse talent – advancing diverse talent in to executive, management and board roles
  2. Strengthening leadership accountability and capabilities for (D&I)
  3. Enabling equality of opportunity through fairness and transparency – Advancing to true meritocracy and leveling the playing field
  4. Promote openness and tackle microaggressions – zero-tolerance policy for discriminatory behaviour
  5. Foster belonging through unequivocal support for multivariate diversity – build a culture where all employees feel they can bring their whole selves to work

Embracing D&I will increase profitability, but the progress of making it a priority is slow, in large and small companies.

I believe part of the reason is that implementing D&I policies may seem overwhelming and organisations are concerned about the risk of unintended negative outcomes.  Such as discrimination and conflict, emanating from employees not accepting the differences.

Simply making pledges and having a policy is not enough when considering D&I policies.  Managing diversity is more than equal employment opportunity and affirmative action.   It’s a comprehensive process for creating a work environment that includes everyone.

Diversity is not about differences among groups, but rather about differences among individuals.

Diversity leadership requires a commitment and understanding that every individual in the organisation contributes to its diversity. 

Leaders capitalising on the skills and talents of an individual who is different on some dimension and making them feel a valued member of the organisation.

Leaders must consider diversity of opinion with the team, find shared ground and reach agreement through focused communication and understanding.

They must incorporate commitment to diversity and inclusion as part of their business strategy and add to their values.

In conclusion, in order to succeed with implementing effective workplace D&I policies and processes and create a culture of belonging, leaders must:

  • Include their team and work together to understand what is best for the organisation based on teamwork and group dynamics.
  • Review constantly. At least every twelve months and adapt as required.

Risks of getting it wrong

There are many benefits of creating an inclusive and diverse workplace where employees feel a sense of belonging.  There is a moral and ethical duty to ensure the safety of employees.  There are also significant risks to the business for failing to take steps to provide a safe working environment. These include:

  • Reputational damage: people ignore it, but one bad news story (or several) can significantly damage your relationship with your clients, employees and the public.
  • Penalties: you can face significant financial and/or criminal penalties for each breach of your state’s occupational health and safety, and discrimination legislation. You can also be on the hook for damages if an individual claims you failed your duty of care.
  • Personal liability: individuals involved in a breach of a business’ duty of care can potentially be held personally liable.
  • Injuries: if an employee is discriminated against, or sexually harassed at work, they may suffer an injury (mental and/or physical), go on leave and/or lodge a workers’ compensation claim.
Download some helpful tools:
Considerations when implementing D&I policies
Questions Leaders need to ask in regards to Discrimination and Harassment

Leading Diversity and Inclusion in the workplace Read More »

Leadership from “The Rock” Versus “The Whole”

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We are continually being challenged as leaders in the ever-changing world of business, but what does it mean to be a leader in 2020 and beyond.

Leaders need to be mindful, present and self-aware.  In anticipating the future, leaders need to shift from known experience to leading together with others and leveraging subtle differences and changes as needed.

Business has become increasingly complex and the days of the individual have shifted to the collective.  From the “Follow me, I know the way” type leader, “The rock” to leading from “The whole”.

Knowing when to take the lead and when someone else in the team needs to take the lead means being flexible and able to empower those around us.  Leaders need to be adaptable, sense the future and focus on the shared purpose of the whole collective.

Leading from the whole

Collective leadership means that we need to focus on being as well as doing.  The balance of both doing and being means;

  • Being in relationships and present with people
  • Noticing the team dynamics and engaging
  • Understanding that it’s not what you know but what you do

It’s not possible for one smart leader to have all the answers. You need to tap into the network and use the intelligence of the people in the team. That way, you can build awareness that you are all part of a whole system.

The Leader is responsible for the team dynamic and needs to read and sense that dynamic.

It doesn’t mean that you don’t set direction and take people forward, but it does mean using the wisdom and intelligence of the whole.  You need to have broad systems awareness and sense what is unfolding in the team in order to arrive at goals.

The future doesn’t always unfold in a straight line.  It’s important to sense the collective and adjust as is necessary.

You need to use collective intelligence as well as emotional intelligence.  Emotional intelligence is about self-awareness and collective intelligence is seeing how you behave as a whole team.  When the collective team speaks as a whole, it’s different to individuals. 

When you lead from the collective you can set a plan, however it needs to be fine-tuned as things evolve.  COVID19 has certainly taught us that this year with the exponential take up of video meetings and adapting to new working environments from home.  Has this made it more difficult for you as a leader to sense the collective intelligence?

Are you conscious and aware of your collective team?

  • How it behaves
  • The beat
  • The wisdom
  • The Pulse

To be a leader who is able to sense the collective and dynamics you will need to be more self-aware and focus on being present, listening and not multi-tasking, distracted and thinking about yesterday or tomorrow?  You need to intentionally and fully connect directly with individuals and your whole team.

In order to achieve true collective leadership, you need to focus on relationships as well as the ROI.  Leading from the whole means not leaving anyone behind.  It means that no one feels alone.

You need to use love, compassion, empathy and companionship to show that you value people.  This requires a mindset in which you implement mechanisms to show you care and support people in what they are going through.

Self-awareness supports leaders with better mental health outcomes and job-related well-being.  It’s not about putting a fruit bowl at reception and having weekly yoga.  It’s about being authentic and developing trusting relationships, improved decision making by incorporating the collective intelligence and leading with the heart as well as the head and gut.

Authentic Leadership

You cannot be authentic if you do not know who you are.  Authentic leadership comes from your values and beliefs.

People trust and will naturally follow authentic leaders. 

In summary Collective Leadership for “The whole” is;

  • You are present and aware of self and of each other
  • The collective team know themselves and each other at the core level.  Each knows their unique talents and strengths.
  • You are aware of the team dynamics and able to co-create and co-lead
  • You are in touch with what is unfolding and able to read the signals and lead for the emerging and changing future

Leading in a VUCA world

The Leadership Coefficient cover this really well in their Leadership course with the Three Principles of Collective Leadership and Silo thinking and Systems thinking.

They talk about living in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world.  This means it is no longer possible for one smart leader to have all the answers and the future is emerging moment by moment.  Jane Weber clearly states in her article of May 2020, that leaders are so distracted that they mostly do not even notice the changes.  Often disruptions still take many leaders by surprise.  She asks, did the taxi industry see Uber coming and hotel industry AirBNB?

If you don’t pay attention to the changes emerging in your whole collective team and stick to leading in a straight line, you may not see what’s coming and survive.

Ciao, a presto.

– Sara Pantaleo, Affari SP Founder

 

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