Sentinel Way was created to help leaders of professional services companies with growth and leadership strategy. Often, company leaders get too involved in the day-to-day details of running a business to be strategic about growth. This lack of focus has many negative impacts. Here, we walk through some of the impacts on employees, budgets, and the bottom line.
Loss of Big-Picture Focus
In a Harvard Business Review article, “The Work of Leadership,” Ronald A. Heifetz and Donald L. Laurie discuss the need for leaders to balance operational work with strategic leadership. “Business leaders have to be able to view patterns as if they were on a balcony. It does them no good to be swept up in the field of action. Leaders have to see a context for change or create one.”
Being able to see the big picture is an essential part of being able to think critically about the company’s growth and need for change. If leaders are too in the weeds, high-level opportunities and risks go unnoticed.
Henry Mintzberg, a management scholar known for his work on managerial roles and the importance of balancing strategic thinking with day-to-day activities, is a great resource for leaders looking to make a change.
Inefficient Resource Allocation:
McKinsey & Company’s “The Alchemy of Growth” posits that a leader’s main role in growth is fostering a culture that embraces change and innovation. Leaders are uniquely qualified and positioned to seek out disruptive innovations and new business models.
Leaders are responsible for monitoring and managing three “horizons” introduced in this book:
- Horizon 1
- Optimizing existing operations and revenue streams of the core business. This is not the work of the leader but should be delegated multiple levels below executives
- Horizon 2
- Building and expanding businesses related to the core operations, often through new products, services, or markets. This should be delegated at least one level below executives.
- Horizon 3
- Creating new businesses or entering different markets, often through innovation and disruptive strategies. Executives should be more engaged on this horizon.
Opportunity Cost of Time:
Harvard Business Review’s classic “Managing Oneself” by Peter F. Drucker emphasizes the importance of effective time management. In the context of business growth, executives who apply the principles laid out in this article can make more informed decisions about which growth activities to delegate based on their self-awareness, team strengths, and a clear understanding of their values and goals.
Ineffective time management leads to costly delays, hindering company growth even further.
Failure to Delegate:
Leaders who do not delegate create bottlenecks and delays, stunting the development of their employees and creating a culture of “hero ball” that rewards the heroic contributions of a few that is ultimately unsustainable.
Explore Leadership expert John C. Maxwell’s teachings on delegation and leadership development to better understand the importance of grooming future leaders. Inc. Magazine’s “Why Delegating Responsibility is Vital to Your Business” also highlights the significance of effective delegation.
All of this to say, Sentinel Way understands that much of this is easier said than done. It can feel impossible to take the big picture approach and activate a growth strategy when you spend your days putting out fires and making sure daily tasks get done. This is one of the reasons that Sentinel Way was created: to help fill this gap by stepping in to provide thought leadership and management of growth activities when you just don’t feel like you have the time.
Without effective growth leadership, the business stagnates, and it becomes even more difficult to evolve to the next chapter. A lack of growth strategy has big consequences, including but not limited to:
Stagnation and Missed Opportunities
When leaders are focused on daily operations, they often miss the opportunity to capitalize on emerging market trends or disruptive innovations. This causes the business to stagnate, lose competitiveness, and miss growth opportunities. A stagnant company doesn’t offer much opportunity for career growth, so employees may become disillusioned and seek out other opportunities.
Operational Inefficiency and Burnout
A micromanaging leader is not good for employees or processes. Employees get frustrated with someone always looking over their shoulder, resulting in a high level of burnout and decreased morale and productivity. Employees don’t stick around these types of environments, and it makes it hard to retain talent.
Strategic Misalignment and Financial Decline
Without a formal growth strategy, it’s impossible to make decisions that align with a strategic goal. Instead, decisions are made in the moment to solve today’s problems instead of looking ahead. This often results in misallocated resources and poorly timed investments, and ultimately, financial decline. The business will be unable to adapt to changing market conditions, and employees may face job insecurity or reductions in compensation or benefits.
An Example: Marissa Meyer at Yahoo
Marissa Mayer, a former CEO of Yahoo, was known for her hands-on approach to product development and tactics like acquiring Tumblr. While these tactics had short-term impacts, they didn’t address the core strategic challenges facing the company. Yahoo continued to struggle with declining advertising revenue and market share, and ultimately, was acquired by Verizon.
Because Yahoo didn’t have an effective growth strategy, decisions were made impulsively and in the short term. Even though new products were created, and markets expanded, Yahoo didn’t have the strategic footing to be able to handle the next level of growth. A well-managed growth strategy is essential to setting up for success in the future.
The first step in building a growth strategy is leaders getting themselves out of the weeds and making time for high-level thinking. To do that, leaders need to be comfortable asking for help. Delegating tasks to competent employees not only makes more time in the leader’s workday but also helps develop talent for a stronger team. Asking for help might also mean reaching out to an external growth strategy consultant like Sentinel Way.
Sentinel Way grows professional services businesses through hands-on work and detailed growth strategy, keeping leaders on task and focused on the future. Reach out to schedule a growth strategy session.
