Revenue Journal®

Every business needs an effective leader. And yet, highly effective leadership is rare. Here's a checklist that comes from helping hundreds of CEOs, entrepreneurs and managers become more effective leaders. If you're feeling brave, in the spirit of a new year, you might rate yourself on the following characteristics on a scale of 1 - 10, then ask some customers and staff to do the same - anonymously, of course, using something like SurveyMonkey http://www.SurveyMonkey.com. The results might surprise you.

Yes, 'tis the season - a season I dearly love. And this article is definitely related. It's actually about what really matters, in business. Your business. My business. Everybody's business.

See, I love business. The more I'm in business, the more I'm in love with business. I love what businesses do for people.

This pattern is so common it should get special attention in all MBA classes.

A smart technologist creates a great product and builds a company around it. He and his team continue to improve the product and get it out into the hands of people who want it. The technologist - let's call him Mike - is a thoughtful, pragmatic person who understands that you can't build a solid company without creating and constantly improving your internal processes. He learns how to manage effectively. He builds a solid company that grows steadily and stays profitable.

Then, one day, everything changes. One of the biggest companies in his industry - the Monster - becomes a competitor, either by buying a competing product or by opening up a new division. Mike quickly gets up to speed on the Monster's new move. At the very least, there are trademark and copyright infringement issues that he will have to fight. But that's just the legal activity. The real battle will be for customers. His very survival depends on winning this battle.

I'm writing this while sailing with my husband from South Africa to the States, bringing home a boat we had built in Cape Town. It's an 8,000-mile trip. We've been at sea since April 20, stopping only once at St....

"I know, I know," the child says, grabbing a tool from his father, who is partway through showing how it works and what to do with it. But something goes wrong after the child tries to use the tool. He stops and mumbles, "Must be broken." He is reluctant to admit that he really didn't "know," and that he really hadn't thought it all through, and he shouldn't have been so hasty. He doesn't want to admit that he could have learned something from his dad after all.

Fast forward thirty years. Now the child owns his own business. "I know, I know," he says, interrupting the customer. The customer, an expert in his field, is trying to explain his needs. But the business owner doesn't want to hear it, because he "knows."

Of course, he really doesn’t know.

You can always tell when you are being sold something that you might regret buying later when the person selling it keeps talking about how sorry you will be if you don't buy it. They are selling fear, pure and simple. IBM used to call it "FUD: Fear, uncertainty and doubt." The goal was to convince the buyer how bad off he would be if he didn't buy whatever was being sold.

Right now we are being told to be afraid, very afraid. We are supposed to buy into that fear, to believe it, to act upon it. To fret and worry and rush around tearing out our hair.

Leadership is not about being afraid. Running your own company or managing a group of people is not about being afraid. In fact, the person in any situation most likely to be the natural leader is the person who is least fearful.

You can't be both. You can't be a successful leader, someone with the vision and the persistence to make it, if you are fearful.

You think your future is assured by your plan. You worked hard on the plan, you are executing in accordance with the plan. You obsess about the plan.

There's nothing wrong with planning. But there's something more important, something that is going to make you or break you, something that is taking place in spite of your plan and outside your plan.

Something that, if you don't pay much attention to it, will literally keep your business from growing, or kill it outright.

You'll still have all those wonderful plans, but they won't mean anything. You'll have to go back to working for someone else - maybe even that competitor whom you hate.

What is more important than your plan? The work your people do, and their daily interaction with your customers.

The economic news is in full tailspin mode. Cash is tight. It’s harder to find a job than it was, although employers are still hiring. Retirement savings are shrinking, spoiling the plans many had for their use. The pundits are even starting to utter the “D” word. Politicians and the media are telling us it's terrible, and it's going to get worse.

What now?

Now it gets really, really fascinating.

For obvious reasons, I was thinking about "thanks" this week. And, because I never stop thinking about revenue, the two subjects came together. There's a saying, "To him who has, more will be given." I think that saying is often misinterpreted, because of the unstated truth underlying the statement.

The only way you can truly "have" something is to be satisfied with it and appreciative of it. If you are thankful for what you have, you will take good care of it. You will cherish it. You will look for ways to add other similar things to your life. This is how that "to him who has, more will be given" promise comes true.

How does this apply to revenue? In just about every way.

Some time ago, I wrote an article about how software buyers were mired in the "skepticism swamp." It's even worse now.

If you're selling software, you have to be able to overcome the massive amount of disbelief that has built up in buyers' minds, thanks to all the promises that have been made to them - and broken. Everyone promised higher productivity, increased efficiency, and plug-and-play. HA.

What everyone delivered was installation headaches, integration nightmares, missing-in-action service, and navigation that required that you know the program intimately before you could do anything useful with it.

Today, software buyers and users consider each purchase an investment - of time and grief, as well as the money.

There comes a time in the course of inevitable economic ups and downs, when "everyone" starts to feel like "things are going to hell in a hand basket." The media is filled with stories of business and industry failures, people start hoarding and cutting back on their expenses, sales that used to be easy become difficult, and company budgets are cut.

There is a sense of impending doom, and financial statistics are reported that reinforce that sense. We are in one of those periods now.

It doesn't really matter how we got here, or how much of it is real and how much is mass hysteria. Having been through a number of these periods, I've come to pay less and less attention to the "why."

When your market changes, your company must change with it. This seems so obvious - when you're an outsider looking into someone else's company. You can plainly see that buyers have changed what they are doing, and conditions have changed, but the people inside the company are behaving the way they have always behaved, as if nothing had changed.

When you're inside one of those companies, you can tell that something is different. You get hints. But it is so much easier to continue doing what you've always done. You would rather ignore the changes you sense, than admit they are happening - and deal with the changes you know will you have to make.

New players will come into the market, while the market is in its new state, and think, Ah, so this is how it is. OK, I will behave accordingly. They don't have to change their current behavior or infrastructure. They will simply start doing what makes sense.

The leaders of the companies-in-denial either wake up and take action at this stage, or continue to sleepwalk. I don't have to tell you what happens to the sleepwalkers. They walk right off a cliff, never to be heard from again.

You manage others. What do they depend on you for - more than anything else?

The truth.

You sell a product or a service. What do your customers depend on you for, more than anything else?

Yep. The truth.

Nothing is more valued in the business world, nothing matters as much, as the truth.

Employees eat it up when it's given to them, and, when it isn't, conspire amongst themselves to find out what it is.

Customers demand it, and stomp out (warning others to stay away), if they don't get it.

As I was coaching a salesperson recently, we talked about the differences between leaders and followers. It's an important distinction, especially during turbulent, recessionary times, which require all company leaders - and their employees - to meet new, higher standards. In many cases, the survival of their business depends on it. Leaders must become better leaders and their followers must engage in more leadership-like behavior.

I pointed out that if you were to walk into any conference room, and start observing - even if you didn't know anyone in the room before you arived - you would be able to pick out the leader and the followers in about three minutes. It wouldn't matter where that leader was sitting at the table; it wouldn't matter what the leader was wearing or how old or young the leader was; it wouldn't matter what they looked like.

Employees often believe - and behave as if - managers were "born" into management. Sure, someone can inherit a position, but that's rare. On the whole, leaders are self-made, not born. Leadership is a learned skill. I am not talking about the people who rise in the ranks due to political shenanigans. I am talking about people who have rightfully earned the right to be perceived as a true leader, someone worthy of being followed.