Managing People Through Effective Entrepreneurial Leadership
Joseph D. Sansone, Founder, Retired President, and CEO, Pediatric Services of America, Inc.
As a manager and then an executive for a healthcare company early in my career, I often had trouble firing people who weren’t measuring up, even when I knew it was probably best for the company. When I founded my own company in 1989, Pediatric Services of America, Inc., I realized I not only had to motivate people to provide optimal home care for our pediatric patients, but also convince them to do so in a cost-effective way. If our company were to thrive, workers could not, for example, use five disposable products when Medicare would only pay for one.
I also learned that managing people is as much an art as it is a set of principles and tactics. It’s a lesson that, I believe, is difficult for a lot of entrepreneurs, who are sometimes so engrossed in their brilliant idea that they believe people will automatically follow. That doesn’t happen. To turn vision into a company—an abstraction into a tangible—entrepreneurs must be leaders of people.
At Pediatric Services of America, Inc., which has grown in 15 years from a regional distributor of oxygen equipment with revenue of $10 million to the nation’s largest home pediatric provider with revenue of more than $200 million, I am fully aware that our people are our product. Our 3,500 nurses and therapists providing support and care to homebound ill children are what we are selling.
Motivating our workers, therefore, is essential. Happily, I’ve learned from my past people-management mishaps, absorbed those errors, and can now effectively oversee what is truly the essence of our company. It’s a lesson I’d like to pass on in this article to other entrepreneurs. In short, in order to motivate people, entrepreneurs must be leaders, an endeavor that requires extraordinary talent.
Consider that different people have different perceptions of the entrepreneurial organization. A receptionist may view his or her job as simply answering telephones and greeting visitors. The janitor may perceive only that trash needs to be emptied. The sales person may look at which sales will generate the highest commission. The supervisor may consider only the budget for his or her department.
In contrast, the entrepreneurial leader must define each individual job as an element of the overall purpose of the company and not as an end in itself. The phone is answered to communicate the company’s business. Sales are made to produce a profit for shareholders. Budgets are put together to ensure fiscal responsibility, and the trash is cleared to keep the work force healthy and productive. In sum, the leader must instill in each worker an understanding that the end result depends upon everyone in the organization working together.
You’re a Leader Now
As an entrepreneurial leader, the first thing you must do is to stop being “ordinary.” It’s natural to want to be “one of the guys,” because everyone wants to be liked. Your workers, however, need to respect you as a leader and for the right reasons – specifically, for your values, clarity, and vision, and for your ability to inspire others to embrace those characteristics. If you fear losing your friends, you will avoid making the necessary tough decisions.
A leader takes on significant responsibilities and loses certain freedoms. For example, you can’t join employee gripe sessions and talk disparagingly about upper management. You also lose the right to blame others for problems, because you are now the person responsible. The buck really does stop at your door. When outside forces are the major cause of a negative outcome, you may find this aspect of leadership tough to swallow, but there you have it.
At issue, as author Stephen Covey has noted in The Seven Habits of Highly Effective People, is a leader’s need to be proactive by assuming responsibility for his or her life – and, by extension, the life of the enterprise. While there always may be someone to blame when things go wrong, a leader must spend the time the fixing the problem rather than looking for ways to point a finger at the perceived source of the problem.
Leadership in Action
Leadership, then, is defined primarily by what the person does. A good leader motivates others to assume responsibility for the tasks necessary to develop and sell the company’s products or services. In the presence of a good leader, people instinctively follow and often find they are performing beyond their own expectations. Here is a look at the steps necessary to lead your own entrepreneurial organization.
As an entrepreneurial leader, you not only need to clearly express the concept and purpose of the organization, but also to fill the positions in your company with people having superior skills. You must, in short, fill jobs with top talent, not just the warmest available body. Good leaders never lower their standards to fill a position. You’ll pay for it later if you do. Spend time looking for winners, and you’ll win right along with them. Some managers fear hiring people who might be smarter or more skilled than they are. These managers are doomed to mediocrity. There is no greater value a leader can provide to the organization than to build a winning team with proven performers.
Leaders must constantly assess the structure and capabilities of the team, and so evaluating performance is an essential part of the job. Common problems facing leaders are how to discipline poor performance and how to reward top performance. It is important to give feedback at all levels. It is also important to give that feedback based on specific standards – recognizable, achievable goals that are necessary for the strength of the business and to which all parties agree in advance. These goals must also be consistent in application and broadly celebrated when they are surpassed. The goal is not to lower the bottom by accommodating the weakest, but rather to raise the top by recognizing and rewarding superior behavior.
People follow and admire a leader they believe and trust. A leader needs integrity more than any other single trait – not only in personal behavior, but also in the way he or she treats others who lack integrity. Everything counts when it comes to leadership. If you think ignoring the problem doesn’t matter, you’re wrong – you’re always leading, even when you’re ignoring a problem. What matters to your team is what you do. They expect you to do the right thing. If you lose your integrity, you lose their trust, your most precious leadership possession.
Successful leaders grow in the job; they constantly search for improvement. In the movie, Ground Hog Day, the protagonist lives the same day over and over again. Many people live their lives that way because it’s comfortable. To build a thriving company, leaders need to move out of the comfort zone and into the learning zone. It is there that they will reach their potential. Continue to set new goals for yourself and your team. Goals force people to move out of the comfort zone. Avoid the fear of failure. You’ll discover that failure is a prelude to success.
Someone once said: "Good judgment comes from experience, and experience comes from poor judgment." More than anything, leaders are called upon to exercise good judgment in their central role as motivators of people. They know they must stay positive even as unfair things happen. They know that the important issue is not that unfair things happen, but how they react to whatever happens. Leaders take their team forward through every adversity with the “can-do” attitude that inspires achievement even when all seems lost.
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