The success or failure of a business involves many factors. The demand for the company's product or service, market conditions and the quality of employees are all relevant factors that play a role. But success begins at the top, with the business' leaders. Leadership impacts a business more than any other single factor as it has a ripple effect on the business' practices, its employees and in turn, its success or failure.
D. Quinn Mills discusses leadership in great detail in a 2005 publication entitled, "Leadership How to Lead, How to Live." Mills defines leaderships as the process by which a person "influences the thoughts, attitudes and behaviors of others." A leader is not merely one who is in a position of authority. Great leaders, such as Martin Luther King Jr., took on the leadership role without any formal title. Leaders help groups of people combine their efforts to work toward a goal. Without leadership, chaos results when a group of people try to accomplish a task and they all hold different ideals. A true leader makes a commitment to the goal and the people he is leading, takes on the risk for loss or failure, accepts recognition for success and acknowledges the hard work of those he is leading if success is achieved. In a business environment, leaders are often managers, but managers are not always leaders.
Sometimes a manager, or "boss," acts as more of an administrator than a leader. Administrators make rules and regulations, make decisions that pertain to the rules and regulations, keep records and fill out forms. A good manager is able to balance the two roles, leader and administrator, so that he may plan, budget, set direction, organize, staff, control, make decisions, solve problems, motivate and inspire. When a manager acts as only an administrator, employees lack necessary leadership and a chaotic work environment is created, Mills asserts.
A 2011 Gaebler.com article entitled "Ethics and Entrepreneurs" affirms that a business' biggest threat is its leaders neglecting to form a comprehensive code of ethics. Many businesses, including Enron, Global Crossing and Tyco, have failed because of unethical business practices. A business' leaders must act ethically themselves while simultaneously setting a foundation for employees; informing employees of what is and what is not allowed within the organization. Ineffective leaders who fail to form a code of ethics put the business at risk for having no protocol on how to handle situations of corrupt behavior. This is yet another example of how ineffective or poor management can threaten a business.
A 2011 "Training" magazine article by Bob Kelleher, founder and CEO of The Employee Engagement Group, affirms that employee disengagement is one of the biggest threats to a business. A disengaged employee is one who does not give 100 percent effort because he does not enjoy or value his work. The disengaged employee may intend on leaving the company as soon as he finds a better opportunity. Leaders have a direct impact on employee engagement. If senior leaders demonstrate the company's values, employees are likely to be more engaged. In addition, if an employee's first line supervisor is disengaged, employees are more likely to be disengaged, Kelleher asserts. This lends to the conclusion that poor leadership threatens the organization's success.
- Jupiterimages/Pixland/Getty Images