A strong business can be traced back to its leadership.

Photo courtesy The Ronald Reagan Presidential Library

Let me tell you about my father. He is a huge and I mean a huge Ronald Reagan fan. To this day, he has pictures of Ronnie up in his house - from both his presidency and as a young, charismatic actor. He even has those pictorial books about the man sitting on the end table in his living room.  

He completely trusted and respected the guy. My dad did not necessarily agree with everything President Reagan did but he agreed with his principles and the values he stood for.  

He loved Reagan’s optimism and strength as a leader when he first came into office. He also respected his accomplishments and the legacy he left. He would be up on Mount  Rushmore if it was up to my dad.

Let’s talk about another U.S. President for a moment.

I was a young boy during the Nixon presidency. My dad had a similar view of Richard Nixon during his first term in office. I can remember my dad talking about the good this man was doing for America. He talked about Richard Nixon all the time. He loved him.

Then came Watergate. When the news first came out, my dad absolutely would not believe it. He told me not to believe it. Nixon’s enemies were out to get him - it was politics and his man would rise above it.  

When the Watergate story completely unfolded, my dad's view of President Nixon completely changed. He was guilty - at least in my dad’s mind - of lying, covering up the story and all kinds of other heinous acts. He had broken the trust my father had placed in him.

I can remember the final speech President Nixon gave when he resigned from office. If you were old enough, you remember it, too - it was a big deal for our nation. I was sitting in the family room and while he was talking, my father was hurling insults at the TV. I had never seen him so hurt and angry. There is a saying, “Hell hath no fury like that of a woman scorned.” This was close. 

Leadership and Success

A common business principle is that effective leadership leaves clues. One of them is a successful business.

In successful, growing companies - those with a lengthy track record of success - there is a solid base of employees that have similar feelings about the owner that my dad had for Ronald Reagan. Not to the extent of having pictures of the owner up on the wall in their house, but not that far from it either, truth be told.

I go into these companies and there is an amazing undercurrent of respect and loyalty.  This loyalty had been earned through years of hard work. Years of actions that matched up with the publically stated principles of business ethics, customer satisfaction and management based on objective results and not personal politics.

When the owner of this kind of company stands in front of employees at company meetings, the room gets quiet. People listen. They are rarely disappointed at the vision and consistency in the message they receive. Just like Ronald Reagan and my dad.

Employees working for this kind of leader commonly go the extra mile because they see the owner go the extra mile. He has done his part and they will do theirs.   

When business improvements are recommended, employees at companies run by this kind of a leader are more receptive to changes and improvements. Sure there is some reluctance and fear of change, but they will get through it. Trusting that there is a greater good being achieved is the common theme.

Strong, effective leaders will never win or care about popularity contests. But there is a core of good, accountable employees that respect the company leadership. They do the heavy lifting. They also know from experience that when the owner sets out to do something - like a simple business improvement - he will see it through to the end. So employees know to get on board because it will get done with or without them.  

And when times do get tough and the owner is faced with hard decisions to make that are not popular (see 2009 for many of these companies), these same employees, while maybe not totally in agreement with the owner, concede the need for the changes out of respect and loyalty to the owner and do their best with the situation at hand.

Richard M. Nixon Plumbing & Heating?

How about companies that have hit an extended rough patch of business? I am not talking about a bad month or quarter or even a year. Those happen from time to time to virtually all companies. I am talking about an extended period of decline where there seems to be a steady downward drift of the business. How do the employees of these companies view the leadership of the business?

Now let me say right off that a Richard Nixon reincarnate is not running these companies, and the owners have not necessarily broken any laws and tried to cover anything up. But the company-wide fallout from poor leadership is evident everywhere.

Poor leadership leaves clues as well. Here are some of those clues:

• Good people have quit the business. The remaining people are essentially unemployable at their current position in high-performing companies.

• White elephant family members hold down key positions and are not performing up to minimum expectations. There is no chance they are leaving the company for performance reasons, and that is exactly how they act.

• The owner’s personal issues - whether they are hobbies, side businesses or recurring family obligations - always take priority over the business. Work hours of the owner are erratic and subject to change without notice.

• At 5 p.m., the business is a ghost town with owners and employees long gone. People watch the clock like a hawk.

• New business initiatives are rarely introduced.

• Those business initiatives that are introduced are discarded or ignored after a short period of time. Positive change is rarely sustained.

• Good business processes that work in other companies just can’t get traction. 

• Company meetings are rarely held and when they are held, quickly digress into addressing the same problems (paperwork, on-call schedule, etc.) that are not being fixed. Employees are chronically late to these meetings.

• “The business is what it is and people are who they are and you can’t change either” is the prevailing business thought by ownership and employees.

Underlying all of these examples is essentially broken trust between the owner and the employees. They trusted the owner with their jobs, their livelihoods, their careers and in exchange got words and no action. They were told to work hard and then saw the owner skating by, cutting out early to “check on jobs.” They were told the customer is important and then see customer complaint calls going unreturned.

What is worse is the fact that he didn’t really try to succeed. That is much worse than striving mightily and failing. There is a certain respect employees have when they see the owner trying hard but falling short. It can even rally support and morale.

However, employees at these type of companies essentially got a promise that was not fulfilled. Like my dad and Richard Nixon, they were lied to.  And like my father, once that trust was broken there was no benefit of the doubt given - no defending the company in the owner’s absence and no good-faith effort to go the extra mile. 

Good people then decided to leave rather than stay aboard a rudderless ship. Those that remained just disengaged and went to work trying to do the least amount of work for the most amount of money.

The longer I am around this industry the more I realize how critical hard-working, consistent leadership is. All the training, consulting and business improvement initiatives are worthless if the company is poorly run at the top. Companies that are struggling need to get the leadership right and then work on the processes and employees, not the other way around.

A speaker at a recent Nexstar meeting said that when the business is performing well, effective leaders look out the window and give the credit to hard-working employees. When times are bad, they look in the mirror.

So if times are tough at your company and have been so for a while, when you looked in the mirror, which president did you see?