How to be a successful leader during times of uncertainty
Welcome to Episode 8 of Leader Talk! In this episode we spoke to Preeti Inchody, a Managing Director at Ankura.
Preeti has extensive experience as a leader across a range of industries and countries. She actively champions diversity in every company she works for, advocating for open communication and encouraging idea generation from everyone.
Results-driven, Preeti has a goal to make a significant impact at the inflexion points of the journeys of over 100 companies by using her extensive corporate finance skills. She has a successful track record advising ANZ mid-market on local and cross border Mergers and Acquisitions (M&A).
In our chat this week we spoke about what makes a strong leader, why you need a mentor, how to prepare for the merger and acquisition process, and how your business can deal with uncertainty.
To learn more about Preeti Inchody’s leadership and business advice, read on or listen to our chat on YouTube, Spotify, Listen Notes, or Player FM. It's also available anywhere you listen to your favourite podcasts via Buzzsprout.
Authored by Preeti Inchody, Managing Director at Ankura.
Uncertainty can be daunting. It’s an emotion that we often try to avoid. But when it comes to business, we cannot avoid experiencing uncertainty on a regular basis. How leaders respond to uncertainty is what separates good leaders from great leaders. Understanding the difference between what you can and can’t control is how many leaders, from large national conglomerates to SMEs, have had to learn over the last two years. However, even without a global pandemic, uncertainty, and ambiguity plague business practices regularly. In a fast-paced, evolving landscape, it may feel hard to keep up, but it’s critical that you do.
As a Managing Director at Ankura, I have a successful track record advising ANZ mid-market on local and cross border Mergers and Acquisitions (M&A). I have worked closely with many management teams and boards during the M&A processes. The businesses I work with are all experiencing a high level of change and uncertainty. Whether a business is being sold or there is a change in management, leadership is usually linked to how well a business handles volatility. If you’re considering going through the merger or acquisition process, or simply want to strengthen your leadership skills, I will outline what I believe makes a successful leader based on my experiences working with a diverse number of businesses.
The two characteristics that make a strong leader
It’s important to note that many different characteristics make a strong leader, and these characteristics are often situationally based. For a long time, I believed that the best form of leadership was to be personable, approachable, and encouraging, and while I still believe this, I also recognise that this isn’t practical in every scenario. To be a strong leader you need to recognise what leadership style suits a situation. If you’re working in a time-poor workplace, then always encouraging everyone to voice their opinion isn’t going to be practical. Understanding how to lead during a variety of situations is critical for business success, especially during periods of discomfort.
However, what I do believe separates good leaders from great leaders is their ability to attract people to a mission that is greater than the jobs they are doing. Leaders like this are not afraid of attracting people who are better than they are.
To demonstrate this point in action, I love referring to a story that I’m sure many of you have heard. It’s about a cleaner at NASA. When asked about why he was working there, he stated that he had helped put a man on the moon. This idea of collaboration in the workplace, from junior level staff to high-level management, reflects an environment that is purpose-led. A purpose-led business sees greater success. This isn’t new information. A study by Deloitte found that purpose-driven companies achieved higher market share gains and grew three times faster than their competitors while securing higher employee and customer satisfaction.
Achieving a purpose-led business must come from the top down, not the other way around. It’s important that you have a clearly defined mission and set of values that can attract and align with your workers. Whether you’re a solo operation or an SME with a small team, defining a purpose is critical for your longevity. This builds loyalty and creates job satisfaction, encouraging greater commitment and effort from your employees. While leaders often feel a sense of purpose at work, the people below them don’t, making it important that leaders ensure their business’s mission is a part of their company’s culture. Recent research by McKinsey identified that while 85% of upper management and executives are living their purpose through their work, only 15% of frontline managers and employees agreed. So, while you as the leader of a small or medium-sized business may feel purpose-led, you need to enable your team to feel that way too.
The second aspect of being a successful leader is hiring people who are better than you in different areas. While it may feel discomforting to hire someone who is better at something than you are, it’s extremely beneficial. By hiring someone more knowledgeable than you are, it signals that you are operating with a growth mindset rather than a fixed mindset. Yes, as a leader you may believe it undermines your position, but it doesn’t. It shows that you are putting your business first and encourages innovation to thrive. Selecting people that are experts in their field enables diverse thinking to prosper and facilitates an environment where not only your business can improve and grow, but so can you. Hire people with longevity and the future at the forefront of their minds, this shows that you are not a leader who wants to keep your business stuck where it is in the present moment.
What to avoid
While I don’t often like to talk about damaging leadership characteristics or things to avoid, as I believe how you lead is based on a variety of circumstances, I do have a few key ways all leaders can improve. These are centred on two significant areas – communication and company culture. Leaders that have created an environment where their team can’t speak about certain topics or leaders who never act on feedback are harming their business’s success. Open communication and a positive environment must be a core aspect of all businesses, large or small.
If you, as a leader, haven’t created a welcoming space where uncomfortable topics can be spoken about, you are limiting your business’s ability to grow and improve. Going back to that idea of a growth mindset, encouraging people to speak about areas that need improving is a great way to recognise how your business can develop. As a small or medium-sized business owner, your business often feels like your baby, blinding you to the possibility that it might not be perfect. Acknowledging and accepting feedback is critical if you want to ensure long-term business success. While you don’t need to always take on feedback, you must be actively listening to people at every level of your organisation.
The next area of improvement regards leaders who receive feedback but never act on feedback. Like I mentioned previously, I don’t believe you have to act on every bit of feedback you receive, but if you never take it on board, then you’ll never improve. By never acting on feedback, you’re demonstrating to your employees that you don’t care about their expertise or recommendations. It breeds a culture of hostility and separation between you and your team. Not to mention the tangible impacts on your business such as lost revenue, a decrease in employee retention, and a reduction in productivity. Remember, encouraging feedback is useless unless you act on it.
Finally, leaders should create a workplace culture that prioritises innovation and ingenuity, rather than just focusing on profit margins. As a leader, you need to be an early adopter not a laggard. By ensuring that you keep up with changing trends and technology, or at minimum having an open mind about them, your business will remain strong during periods of uncertainty. To do this, however, your company culture should align with progress. Investing your time and resources into creating a workplace that is alive and not stagnant will help ensure your business’s longevity. Moving your mindset away from a cash culture, to one that considers where your resources will make the most impact in the present moment, will empower your small business to compete with larger organisations. By consistently striving to expand your business innovations and the support of your staff, you will see long term success.
The importance of having a mentor
To enable your business to grow, you also must continually pursue personal development. Having a coach or a mentor can be an effective way to experience self-growth and improve your understanding of your business operations. The difference between a coach and a mentor for me is this: a coach is a person you actively hire, while mentors are people that inspire you and help you develop unconsciously. Both play key roles in empowering you to become successful and lead your business.
I personally have always actively invested in a coach and regularly have mentors that I look to for inspiration and help. This is because I can have hard conversations with my coach, they help me recognise when I am making excuses and provide me with an unbiased perspective on my business operations.
While some small to medium-sized business owners may not feel ready or have the resources to invest in a coach, everybody can have a mentor. With the rise of the internet, everyone has access to people who I like to call ‘digital mentors’. These are people that you have access to through social media and who you look up to and regularly learn from.
I have a variety of digital mentors who don’t even know I exist. These are people in the business sphere I admire because of how they show up in business every day. While I would recommend you have some business mentors, your mentor doesn’t have to be a business leader. They could be sports stars, survivors, or people whose character and actions are admirable. Having a digital mentor can be an enriching experience as they are outside of your personal sphere. Because of this, their advice and actions can give you radically new ideas and help you think better, as what they have to offer is so different to what you surround yourself with daily.
If you can back yourself and take on a little bit more than you think possible, you are helping to expand your small or medium-sized business. If you invest in yourself, you will find it easier to work through things in a safe and supportive environment, enabling you to lead your team and business better.
How to ensure your business is successful during uncertainty
Times of uncertainty, whether self-inflicted through a merger or acquisition process or by global events such as COVID-19, are always going to occur in the world of SMEs. However, there are some practical tips that you can adopt to make these periods less overwhelming for you and your staff. Empowering your business to easily pivot and ensuring that your employees are enabling the sustainability of your business, are key aspects of ensuring business success.
Today, businesses and people are all operating off to-do lists and plans. However, the reality is that a plan is what we can control but the things that impede upon it aren’t. We can’t control what happens around us, we can only control the outcome. So, it’s critical to divert your thought processes away from strict plans and instead focus on becoming agile enough to pivot based on how things are evolving.
While you should be able to pivot, it’s even more critical to understand when to pivot. A lot of businesses that reach a point of no return are businesses that are unable to pivot on time. Instead of looking for and recognising lead indicators of when to pivot, they only take notice of lag indicators. Lead indicators include things such as revenue dropping, an increase in the customer churn rate, and a decrease in customer satisfaction. Lag indicators are things such as financial distress – things that are difficult to improve once you take notice of them. To ensure that you pivot on time, you need to create an analysis system that identifies lead indicators as they occur because this will empower you to act sooner rather than later. When you see lead indicators, you must take real and meaningful actions, don’t just slap a Band-Aid on the problem and think that it’s been fixed.
Pivoting is easier said than done. To recognise when you need to pivot is one thing, but the actual act of pivoting goes against the human psyche. Humans are conditioned to be hopeful, so pivoting feels as if you’ve lost faith that things will get better. This is where coaches and mentors are helpful, as they can provide impartial advice about what you need to do. While it can feel pessimistic, try to alter your mindset. Believe that pivoting will help your business succeed rather than equating pivoting with giving up.
Another way to ensure that your business maintains its longevity is to hire the right people. Hiring people that are aligned with your values and driven by your mission will improve the sustainability of your business success. Selecting the right people at the beginning helps create a circular experience of success. By hiring the right people, your customer service is positive, which then leads to more word-of-mouth recommendations, which then comes full circle with more people purchasing from your business. At the end of the day, having the right people in your team makes your job easier.
How to prepare for the merger or acquisition process
The merger and acquisition process can be an uncertain and difficult period for you, your team, and your business. Ensuring that you have prepared well and are ready is paramount to the success of your business and team. During this time, be cognisant that your team isn’t looking for complete certainty, they know there will be discomfort. You should treat them with respect, honesty, and provide them with a plan. Remember to never make promises you can’t keep.
Many SMEs have never experienced the merger and acquisition process before. This process can cause a lot of anxiety and that is why it is good to outsource a coach or mentor to help you through the process. To reduce your discomfort, it’s important that you consider what you can and can’t control. You can’t control the outcome so just focus on the process.
The next steps are to think about your goals. Are you trying to maximise financial return? Or are you ensuring the brand goes to the right home? These are important things to consider before you begin the process of selling your business. It’s also critical that you have spoken to someone prior, and you understand the process well. You need to be highly informed to achieve the right outcome. Finally, and this is a simple but important point, always make sure your books are in order. Your records are there to prove the success of your business and ensure that you get the outcome you desire.
In the world of business, uncertainty comes with the territory. You can’t control what you don’t know. What you can control is how you lead during periods of uncertainty and how you react to discomfort. Analysing your leadership style and recognising ways to improve it is part of what great leaders do. Understanding areas of improvement, responding to feedback, and ensuring you’re an early adopter are key areas most businesses can improve in. Investing in yourself by finding a coach and mentors will also help further your development as a business leader. By strengthening your business and leadership style, you can rest easy knowing that you are well-prepared to lead your business in times of uncertainty. Stop blaming the circumstances and begin controlling the controllable.