In the highly competitive world of business, CEO’s require a variety of leadership skills and qualities. Some are obvious and you’ve probably heard them mentioned many times before – a clear vision, the ability to develop achievable business goals, a good communicator, excellent motivator, tenacious, innovative, a risk taker. But self -awareness is probably the greatest quality that any CEO can possess.
One way that this pays off is in the decision making process. For example, if a company is in the early stages of development, the CEO and senior managers must be aware of the capacity of their workforce and their operations. They need to be conscious of the fact that with a limited number of staff they can only produce so much output at any given time.
Know Your Limitations
It’s vital therefore that every business owner, particularly in the start-up phase, understands what the limitations of their business operations are. How many units of product can they realistically produce and deliver to customers per day, per week, per month? Setting Key Performance Indicators is a crucial part of this process.
The Right Response?
But what happens when a CEO gets approached by a new client with a potentially lucrative contract that is bigger than anything they’ve taken on before? It may be tempting for an inexperienced business owner to say yes to everything in the mistaken belief that he should never pass up the opportunity to do business. But is this the right response? What if the opportunity is simply beyond the scope of the business owner and he fails to deliver the contracted amount of product on time? How damaging can that be?
The answer will vary from company to company and the type of business you’re in. Some companies may fail to deliver on a contract and still survive. This may occur simply because the failure to deliver was not publicised widely across media channels. Others may not be so lucky and find themselves featuring in newspaper and internet articles for all the wrong reasons. CEO’s who fail to deliver may find the damage is irreparable and struggle to regain the trust of clients.
The most recent case of this was the failure of the G4S boss Nick Buckles to deliver the necessary security personnel for London 2012 Olympics. By his own admission at the subsequent inquiry in London, he simply couldn’t deliver because he had bitten off more than he could chew; a mistake that could cost G4S between £30 – £50 million pounds.
“As a business advisor with LEAP I have worked with CEO’s in the small to medium sized sector for many years. I understand the temptation to accept all contracts but I also understand that CEO’s need to know when to say no. It is always tempting to accept the offer of work at any stage of business but particularly as a start-up, but if the contract is beyond the capacity, and more important the capability of the business, then they should say no.”
Sometimes Leadership Means Knowing When To Say No: Saying No As Part Of Your Brand Management
“It is true that a business needs to stretch itself and always try to achieve more than may seem possible, but it is important to focus on the type of business that brings out the best in your business, and your people. Saying yes, will normally be for cash-flow reasons, but you need to decide if the contract fits with your business, its strengths and with your future plans. The benefits of saying no are that you can focus your time and limited resources on building your business in line with its strengths and longer term goals. Another benefit is that you are more likely to meet and exceed customer’s expectations which is important at any stage of business, but especially when you are trying to build a reputation as a new business.”