Business Leadership Styles & Traits
Explained with reference to financial statements
There are 3 basic types business leadership style which we come across and combat with in day to day work life. Tactical, Strategic and Visionary styles. There is a fourth type which can be categorized as all 3 together — Legendary.
This article attempts to relate these with financial statements of an org.
Tactical:
Tactics are very important for a functioning of business in general as they help us achieve repeatable routines with execution excellence. What matters when we are in a tactical mode is “what I afford to lose so that I can achieve what I must”. Move quickly, navigate chaos and finally bring a sense of achievement. Its important to note that when a leader is tactical, they must be creative enough to identify opportunities on the fly (sometimes even from a garbage can). They mend ways to quickly lead to success. They aim for small and big wins at the same time in the scope their work at hand.
We can draw a parallel to this in financial statement of ‘Profit & Loss statements’. P&L cares about costs, income and in net, are we positive on the outcomes.
We see such style predominant in large scope of places from our Grocery stores to Govt owned business. being in Profit is the most important outcome for many as it makes sense that way for several businesses.
These type of leaders experience immense flow often.
Strategic:
When results in long term matters more than profits today, strategic thinking takes a major role to play. While short term gains are not less important, we need to do something for growth. A strategic leader must be innovative enough to find big opportunities and make them work.
Like in ‘Cash flow statements’, its important to know from where cash is coming and where it is going to, what are the free cash flows now.
It is of utmost importance to know from where the cash is going to understand what are the future opportunities and investments.
It is also important to know what are going concerns which needs to be borne by us as cost.
Strategic leaders’ style would be more resonant with cash flow where they study stock and flow of cash/efforts/products/market/efforts etc for present and as well as future at the center of how they operate.
There are many examples of such companies, Uber, AirBnB and likes are some to refer to.
Visionary
Visionary leaders build great assets for future. They work towards very long term and maintains their current and future assets intact. They are the gatekeepers of what does a business really own. They consider their teams and relationships very important and they carry them with respect no matter how much heavy or painful they are sometimes. They are both creative & innovative in their deeds.
Like a good Balance sheet, they show genuine importance to both assets and liabilities. They work towards converting current assets to long term assets by dealing both current and long term liabilities gracefully.
Tesla to some extent comes into this category but not yet there.
Legendary
As the name suggests, they are legend and they care about the ultimate metric of shareholder & stakeholder value creation.
They act like all mentioned above to achieve one thing, shareholder & stakeholder value creation.
They are wise and adaptable leaders. They are in utmost control of things even when their teams are completely busy taking their own decisions on the fly.
They encourage building a value system, culture and resilience. By developing such qualities in the organization, Legendary leaders drive great results even by standing out of the chaos and completely trusting their team and their skills what may come.
TATA of India is the best example of such a legendary leadership.
Please do let me know your thoughts in comments.
