Leadership Context | How to use it to Hit Your Money Sweet Spot
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- Leadership Context | How to use it to Hit Your Money Sweet Spot
Summary
For small business owners, leadership context must matter simply because your best business results occur, when you understand and leverage the context in which you lead.
The reality is, many of you tend to focus primarily on the “people aspect” of leadership, not paying enough conscious attention to the context in which you lead. The result is this undermines the speed at which you achieve your financial goals.
In this post, I breakdown the internal and external aspects of leadership context and show how small business owners can use them to rapidly scale your businesses…all the way to your money goals.
In particular, this post discusses:
- What is leadership context
- Why it matters
- How to identify your unique leadership context
- How to understand your external environment
- How to use your leadership context to hit your money sweet spot
I know you will find this information helpful.
As I sat listening to the small group of small business people discuss leadership, before I could help myself, I found myself asking:
“Do you know your unique leadership context?”
“Unique Leadership Context? Wha you coming wid now?” was the first skeptical reply.
And before I knew it, I was explaining that “leadership” as they know it does not happen in a vacuum. Each leader has his or her own unique mix of operational challenges and external factors which should influence how they lead their teams.
Therefore, you need to continuously find the necessary and most effective leadership actions to take, to lead your people in such a way that your business is consistently making you the money you want.
The big question is: How do you determine your unique leadership context?
I can help with that and I’m happy to do so.
First, I’ll explain “leadership context” and why it matters to you.
Then, I’ll borrow 10 questions from my Rapid Scale Leadership Programme which you can use as a start to understanding the context in which you have to lead.
And finally, I’ll show you how to use this understanding as the path to finding your money sweet spot.
If you’re ready, let’s unpack this together…
What is leadership context?
Your leadership context is usually made up of 2 parts:
- The external market/industry/niche part impacting all businesses and over which you have little or no control.
- The internal part that is unique and special to your business.
For example, your external issues could include:
- Rapidly changing business environment
- Increases in complexity and risks in your market or niche
- New tax laws or import tariffs that raise supply costs.
- New software or automation tools, e.g AI
- Worldwide epidemic – COVID-19
While you face those external issues, inside your business, the following could also be happening:
- The bank turned down your application for an increase in your overdraft
- Your most productive employee has hurt herself learning to play volleyball
- Your newly-promoted supervisor looks like he would work out but needs training
- Finding a reliable company to market your services was turning out to be a headache
- You need to travel to your daughter’s graduation in another country
Your leadership context then, or rather your unique leadership context, is how you determine what strategies and resources will best help you to lead your team to success, given the linkage between the external environment and your internal circumstances.
The key thing to understand is that this will be different for every leader in every business.
Why does leadership context matter?
Following on from above, you realise that leadership isn’t a fixed set of behaviors you have in your backpack which you can quickly bring out as needed.
Rather, it’s a response to a specific situation/context, and the “right” way to lead changes, depending on that situation or context.
The underlying idea is that effective leaders diagnose the situation first and determine that unique combination of skills, attributes, experience they can access to devise the strategies to address the situation.
The problem is, if you don’t read the context correctly, you can lead your team to the wrong outcome completely.
And that’s the fundamental reason your leadership context matters!
On top of this, the more you take this approach in which your first step is understanding the context or situation, you also experience the following benefits:
- Improved decision-making
- Better understanding of your market/niche
- Increased market share and by extension, revenue
- Better understanding of your business risks
- Become a more effective leader
- Improved personal and professional development
- Rapidly scale your business
Why you need to establish a leadership context framework
To me, there’s an often overlook aspect of the whole leadership context debate.
Traditional leadership context thinking seems to suggest that you just have to wait patiently in a corner of your business until a problem arises, understand its context and then respond with strategies to solve it.
That’s not how I do business or help my clients to conduct their business.
I help them to prepare to respond to the circumstances in any context by preparing what I call a “Leadership Context Framework” as soon as we begin working together.
In my Rapid Scale Leadership Programme, we build that framework by answering a series of relevant questions. Once you nail down the answers, you can rapidly scale your business and reach your money sweet spot in a whole lot less time.
I’ve selected 10 of them for you, which I believe will be key to getting you started. Answer them as best you can, paying special attention to the ones you struggle to answer.
So open a blank page in word or use good, old pen and paper and begin. Try to follow the order but if you have difficulty with any, move to the next and then return:
1. What is your mission?
This is the reason you set up your business and should not be confused with your vision. Being clear about your mission is the best place to start when you analyse the context in which your business operates.
If you don’t yet have a mission statement, if you want to, now is a good time to go through the process of writing one.
2. What is your business model?
If we answer this simply, it’s a plan that indicates how you make money with your business, which is what you set up your business to do. It’s more an actual representation of how your business operates and it also tells the financial story of your business.
Because it helps you to tell the financial story of your business, it is invaluable as a tool for investors to decide if to risk investing in your business or not. It also makes it easy for business flexibility.
3. Can you describe your business culture and is it working for you?
Many small business owners have a sense of the definition of “business culture” but describing their own, is another story.
You must also honestly answer if it’s working for you. Why? Your culture might have unconsciously evolved by your hiring, your behaviour, your values and what you have tolerated. But leadership and culture are deeply intertwined, so you must address them together.
4. How many employees do you have and are you making the best use of their skills?
Of course you know how many employees you have, so just write the number down. But are you clear about what skills they have? And even more importantly, are you making the best use of those skills?
Let me show you what I mean. It is common for you to hire a person with the skills to match a specific job you want done. No problem there. But often, that person might have skills you could well use in your wider business, and you miss out on them because of how you hire.
5. What’s the state of your market and your niche in that market?
This is the first of the “hard” leadership questions I’m asking you to answer. It really matters to understanding your specific leadership context and using it to scale your revenue.
This question is necessary because when you’ve been in a particular market/niche for a while, you become complacent. You are slow to realise that the market has changed on you, and you need new solutions to maintain your market share.
6. Who are your customers? (describe the top 3 groups)
Depending on your business, there are several ways you can group your customers – by spend, demographics, location, product, gender, behaviour – the ways are endless.
Grouping customers is critical for marketing. Moreover, when you link these to purchases or other KPIs (key performance indicators) you can nurture your customers at different stages of the buying funnel.
How you do this effectively, is a determined by how you harness and use your internal resources.
7. What signs have you noticed that your products/services are LOSING market share and what are you doing about it?
This question is about another one of the “hard” issues which impacts your leadership context.
It assumes that you have a pre-determined share of the market that you want to maintain. You also need to be clear that you’re actually losing market share and that the market itself is not contracting.
In this way, once you become clear that you are losing market share, you will be better able to come up with a variety of ways to address the loss.
8. What signs have you noticed that your products/services are GAINING market share and what role are you playing in this?
There are several desirable benefits of gaining market share. They include economies of scale, improved reputation, increased influence, more bargaining power and of course revenue growth.
But when you see signs that you are gaining market share and you have not deliberately planned it, you must quickly step in. Why?
You should be the one leading the expansion of your business. If you’re not, it could grow out of your control. The more of the market you acquire, the greater the risks for the size of your business.
9. How do you define a competitor and can you list your top 3–5 competitors? Including their strategies, strengths and weaknesses?
A competitor is not only someone who has a business similar to yours in your niche. A true competitor is constantly seeking to steal your customers and revenue, as well as outdo your reputation, influence and market standing.
Therefore, it is important to identify them and get to know them. In answering this question, I suggest that you put this in a simple table form so you can do a comparison. To make it more meaningful, include your business as well.
10. What are the 3 – 5 most significant market trends/issues which you think are going to re-shape your market in the next 3 years?
This goes beyond just having a vision. It requires you to read the tea leaves spot the trends and pivot and redirect your resources to reposition your business.
Bear in mind, these trends may be economic, legislative, political, technological or social. You must understand each of them, as this helps to set the context for your vision and the journey towards it.
How to hit your money sweet spot using your leadership context
Now that you have established a leadership context framework, in reality, you have created a bridge to rapidly get your revenue from where it is is to where your money sweet spot awaits you.
So if there’s a problem to be solved, an opportunity to be had or a risk to be avoided, you already have the infrastructure from which to lead your team to successfully address the issues.
To achieve this though, you now have to boost YOUR leadership skills and attributes because with you new understanding and leadership framework, old approaches will NOT work like they did before.
Some of the skills you will need to strengthen include:
- effective communication skills
- capacity to readily accept good ideas from staff and colleagues
- how to be strong and assertive
- how to build an awesome team specifically for your small business
- your ability to understand financial matters
- negotiating skills
- public speaking and presentation skills
- how to overcome imposter syndrome
- confidently deal with situations inside and outside your business
- delegating effectively
- effectively managing your people
- continuously upgrading your related learning
While these skills are not “learn once and done” constantly working on them, within the framework of your leadership context, takes you faster to your money sweet spot.
And once there, you’re never going back…
Your next “leadership context” steps
So there you have it!
I have laid out a fairly comprehensive plan showing you how to use your unique leadership context to begin scaling your revenue to hit your money sweet spot.
You now know what’s your leadership context, why it matters and how to build a framework to help you respond to changing circumstances swiftly and meaningfully.
If you implement and follow the process, you will begin to see results fast.
And this is exactly what I teach in my Rapid Scale Leadership Programme.
In addition to your leadership context, it shows you how to lead yourself and your team. It also teaches you how to implement a mentorship programme that’s just right for your business and helps you increase you and your team’s productivity.
If this is for you, contact me with “Rapid Scale Leadership” in the subject line, and we can go from there.
To the sweet spot in your leadership context…
Lorna Barrow
Lorna Barrow excels at leading small business owners to get the breakthrough they are looking for in their businesses! She unleashes her 25+ years of small business experience and knowledge on your business, which was developed from working with small business across the Caribbean and beyond. This ensures you get the solutions that are right for you and your business...
