Good leadership increases a small business’s value and helps owners align their personal and professional lives. While Three Business's Ambition Index report highlights the resilience of small businesses, it warns of the mental toll and risk of burnout they face. Small business owners often feel overwhelmed by the sheer number of tasks they must manage, from finances to sales, while constantly fighting daily operations issues.
Leadership development is key to reducing owner dependency, enabling business growth, and preparing for a successful exit. With intentional leadership strategies, businesses can avoid becoming overly reliant on their owners, limiting scalability and reducing their long-term value.
Leadership: A Concept, Not Just a Role
True leadership isn’t about titles or accolades—it’s about the interplay of three key actions: leading, following, and developing others. Together, these create a business that thrives without the owner.
Lead: The owner guides the business toward a vision and the business’s purpose, setting the tone and inspiring others to follow.
Follow: Leadership also means supporting other members of your team members’ lead and demonstrating your commitment to follow them, highlighting the importance of collective leadership.
Develop: Great leaders actively create opportunities for others to step into leadership roles and identify people with the potential to lead, especially those who may not naturally gravitate toward such roles or need more support.
Owners can build a culture of shared ownership and accountability by shifting leadership from a personal role to an organisational concept.
Case Study: Leadership Transition in Action
A small business owner who had run a successful IT business for over a decade wanted to step back from daily operations and potentially sell a major stake. Known as the company's hero and loved by staff, the transition was challenging.
Over 12 months, he worked on his personal hesitations and mentored two key leaders to take on operational responsibilities. Starting with daily check-ins, he gradually reduced his involvement from 60 hours a week to two days in the office, eventually becoming available only for emergencies.
This shift allowed him to focus on personal goals while ensuring the business thrived independently, increasing its appeal to potential buyers and investors.
Transitioning from Owner-Led to Team-Led
To reduce dependency on the owner:
Delegate responsibility and accountability incrementally, starting with operational ones
Provide support as leaders take on more responsibility and develop into their leadership position
Implement systems, such as Standard Operating Procedures (SOPs), to ensure consistency
Be transparent about the transition with your team, explaining how it benefits everyone
This gradual transition ensures the business thrives without your constant involvement, enabling you to focus on longer-term priorities that increase the company's value to potential buyers and investors and your well-being.
Leadership’s Impact on Business Value
Strong leadership directly increases business value:
Sustainability: A resilient team ensures the business runs smoothly during challenges.
Scalability: Empowered teams drive growth and profitability.
Exit Readiness: Businesses that operate independently of their owners command higher valuation multiples.
For owners preparing to exit, whether partially or completely, leadership development is not just operational—it’s a critical component of building value.
Questions to reflect
To get started, consider these questions.
How many decisions in your business rely on you?
What concerns do you have when others make decisions?
How do you handle situations when a team member’s decision leads to unexpected outcomes, either positive or negative? In particular, when your decision would differ from one they made.
These questions help uncover areas to start leadership development that can reduce dependency on you.
What’s Next
In the following article, we’ll explore how to focus on personal wellness and a life plan before a business plan supports this journey. By aligning personal and professional ambitions, you can grow your business with intention, achieve financial success, and lead a fulfilling life. Leadership, after all, is about building a legacy that lasts beyond you.
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