Business Leader

The world ‘leader’ and ‘leadership video‘ has powerful and typically positive connotations. ‘Strong’, ‘Confident’, ‘Inspirational’, ‘Charismatic’ and ‘Visionary’ are just a few of many words that could be used to describe the word ‘leader’.

Yet when you replace the world ‘leader’ with examples of real-world British leaders, the public perspective suddenly turns quite sour. Political leaders are constantly being blasted for being ‘out of touch’ with the people, and business leaders are characterised by their banking brethren as part of the ‘1%’ and paint a picture of a small elite class sucking all the wealth out of the country.

In other words, we like the idea of a leader, and look back at history with fondess, but when we think about real live leadership – suddenly things change. Why is this? Are we always malcontent with present-day heroes, and instead look upon the past with rose tinted spectacles? In 2020 will we look back differently on the Alastair Darlings and George Osbournes of the UK political scene?

The point is – admiration for public figures themselves has not died a recent death – the worship of celebrity and entertainment icons are continued to take a lions share of public conversation and attention. Of course, entertainment figures are able to please and pander to the public as they wish, whilst business and political leaders have to make tough decisions that will not please everyone, and must live with the consequences.

Everyone appreciates that leaders must make decisions in the best interests of the country (as they see fit) and that this will not always benefit them personally. Can we not hold this knowledge in one hand, and weigh it against any negative feelings we have towards politicians, and hopefully create a healthier, more reasonable view on these incredible people working in severely stressful and difficult jobs?

External leadership courses have boomed recently, have you noticed the increase in the number of outlets for leadership training? To list but a few below:

Leadership Classes – Small training sessions held over a small number of days with class size of 5-20 run by private training organisations.

Free Leadership Degrees – The ‘Open Degree’ movement, which has seen reputable institutions such as Yale University offer up 100% ‘free’ courses online. These do not provide an official qualification, but the knowledge is all there, so from a personal development point of view, this is a boon.

MBAs – At the other end of the spectrum, Masters in Business Administration courses are offered by most Universities with a strong management/business school. These cost several tens of thousands of pounds, but last a year and provide full-time education for seriously aspiration professionals. Critics question the value of these degrees, but you can hardly disagree with the average salarys of that graduate from such courses, which can often average above $100,000.

So this is a selection of the range of courses available, but let’s not forget that leadership training can be provided in a much more intimate, relevant and local setting – the workplace of the employer themselves. This ‘On-the-job’ training is the leadership training of default of small and larger organisations alike. Learning from superiors through shadowing, coaching and classes held onsite are cost effective, retains good information and learning within the company, and gives managers the opportunity for job variation by helping run these schemes.

Having seen the power of internal leadership training in my own company, I am surprised by the prevalence of externally provided leadership courses. Perhaps in small organisations – managers do not feel like they have enough teaching experience or formal knowledge to pass on. There are probably underestimating themselves greatly, as these skills can be passed on without the need for slick presentations and formal syllabuses.

In the first of our personal finance series, I will be providing a few tips for buying shares online.

Tip 1: Choose your broker wisely. Don’t end up with the wrong account.

If you are looking for an account to buy and hold a small selection (<20) of shares, exchange traded funds or mutual shares for a reasonable length of time, then the type of account you are looking for a ‘Online Nominee Discount Brokerage Account’. The ‘Online’ bit is straightforwards, ‘nominee’ means that the broker will legally hold the shares on your behalf in the account (so you don’t need to handle any paperwork), and ‘discount’ means that you will be paying for them to process the transaction only, and not to provide advice or other services.

Tip 2: Avoid Management Fees – You Don’t need to Pay them

I would avoid accounts that charge you management fees or inactivity fees simply because there are discount brokers out there who don’t charge you anything! Usually if you actually sign up for a Stocks & Shares ISA account then this will come with a small annual fee, but that’s should be the only quarterly/annual fee you should bare.

Tip 3: Remember Your Trading Hours

The Trading hours for the London Stock Exchange are from 8am to 4:30pm. If you hold shares that are listed on foreign exchanges, you will only be able to buy or sell these in their respective opening times, so plan ahead! You can physically file a trade out-of-hours, but your broker will wait until first thing the next trading day to execute it.

Tip 4: Don’t over-trade

A common mistake is that investors learn how to buy shares online, but then go mad and place 60 trades in the first week, buying and selling so much that they incur £400 of trading fees on a balance of just £10,000. Even discount broker fees are usually too high to allow for profitable day trading by retail investors. Over trading is often linked to under performance, and men tend to over trade more than women. This is usually attributed to over-confidence.

I was wondering today about whether business leaders actually need to possess a good grip on finance or not? Does a business leader need to read the Financial Times everyday and understand the technical news segments relating to the financial markets (as opposed to the business and companies stories)? Does it matter whether a business leader can manage their own portfolio of shares, and appreciates which places are the best places to put ones money in to earn a good interest rate? Going further, does a business leader need to understand the mechanics of options, futures, swaps and other derivatives?

The arguments in both directions are quite strong.

“No”

There are many reasons why no, a CEO does not need to understand the technicalities of global finance, nor the niches of personal finance. The first reason is that every CEO has a CFO as their right hand man. A CFO is almost always a charted accountant with an excellent financial background. Therefore if a CEO has a great financial advisor, then he no need to be an expert in himself.

The second reasoning in support of the ‘No’ is that the CEO should have one focus and one focus only: the running of the business. Time spent reading about small details in finance is going to improve their knowledge yes, but directly improve their business? Not so much.

“Yes”

However in many cases – the CFO becomes a CEO. (Indeed, After COO (Chief Operating Officer, the CFO is the mostly likely position to be internally recruited into the top position in a board). This suggests that a solid financial background and expertise gives an edge to a business leader. Others could simply argue that the position of CFO is a wide ranging and very broad role, which naturally means its holder is very knowledgeable in many areas of the business, and therefore is a natural choice for selection after the COO.

The other reason for CEOs needing to be financially minded is that a business is inherently financial, and that a companies’ operations may run smoothly, be well marketed, and with great customer service, but without a grip on the financials, such a business could make a loss – in which case all those operational efforts were in vain.

When it comes to leadership, all businesses are not created equal. Do you what in an organisation where leaders are disappointingly ‘deficient’ in leadership qualities? Do you think their leadership styles aren’t appropriate for the size, type and workforce of the company?

Leadership Qualities for Small Business

Small businesses require a much more personal people policy. In fact – the word ‘policy’ shouldn’t really come into it at all! With a company of less than 25 employees - each relationship with HR, line management and senior management can be personally maintained in some way, and therefore ‘one size fits all’ training, personal development and incentive schemes are not quite as appropriate.

Think about the leadership style of someone like the late Steve Jobs, versus the leadership styles employed by small shop owners when directing assistants and other staff. In the former – a corporate and formal culture will preside over the interactions, whereas the latter will appear more like a family relationship (or so you would hope!).

I suppose that at the end of the day – how a boss interacts with their staff is completely their choice. But through observation, I have seen that small businesses simply tend to work differently. Relationships management skills are simply different.

What is a Business Leadership Masterclass and how will it help you?

I like to think of the ultimate leadership masterclass as being a combination of leadership books and leadership courses. I love books and their abillity to speak to us individually and break through our social difficulties. I also love how leadership books allow you to revisit content and difficult or particularly interesting concepts and ideas and reinforce them by simply reading the chapter again. Dave Carnegie in his famous book ‘How to Win Friends and Influence People’, urged readers in the very first chapter to not treat his book like a divine script – but instead to devour out – scribble all over it, make notes, tear pages out and take them with you. A Leadership course will have a different effect, because it will be delivered by an individual with experience in the field, in a face to face environment. I find that you can often relate more easily to a tutor when they speak to you as apposed to write to you. Speech is attention grabbing, and whilst you cannot ‘rewind’ what a tutor has just said – the words tend to linger for longer anyway.

The cost of leadership courses and leadership books can often be the real clincher for many budding leaders. This is because the reasonable differences in enjoyability and usefulness are not matched by the differences in price. Books tend to win everytime when cost alone is considered. However at the top end of management (i.e. the C-Suite class and just below), time is the more scarce commodity, and some leaders do not want to have to be engrossed in a leadership book for an entire day to pick up a few leadership tips that they could’ve gathered from a 1 hour leadership course.

Which Business Leadership Masterclass do you prefer? The leadership book or the leadership course?