083: The Brutal Truth About Your Company’s Leadership

AdVance Leadership » 083: The Brutal Truth About Your Company’s Leadership

Welcome to Friday 411, issue #083. In 4 minutes, with 1 insight and 1 action, you’ll unleash your leadership to deal with your company’s biggest challenge.

1 Insight

Every problem in your company starts as a leadership problem

We’ve got some bad news to share, and it’s the kind that stings. We’re not ones to dwell on negativity, but this is something every leader needs to hear.

Are you ready? Brace yourself.

Every problem in your company starts as a leadership problem. Every issue on your team, in your division, and throughout your company can be traced back to leaders.

Opportunities leaders take advantage of or pass over,
Strategies leaders deploy,
Bad behavior leaders tolerate,
How leaders treat employees,
How leaders treat customers,
How leaders allocate money,
Decisions leaders make,
Actions leaders take,
People leaders hire.

So, we’ll say it again: every problem in your business starts as a leadership problem. If you don’t believe us, let us remind you of a familiar story that demonstrates how important leadership is.

Blockbuster to Lackluster

When we were growing up, Blockbuster Video was one of the happiest places on earth. We would stroll the aisles, browsing hundreds of movies, pick out several to take home. We 90’s kids spent Friday nights eating pizza with friends and binge-watching Blockbuster rentals. (This is before “binge-watching” was even a term.) Blockbuster was a cultural staple of our generation.

But today, Blockbuster is known for something else—its near-total collapse. (It has one remaining store in Bend, Oregon.) At its peak in the early 2000s, Blockbuster had nearly 9,000 stores and employed around 84,000 people globally. In 2004, it was a $5.9 billion giant. Six years later, it filed for bankruptcy.

How does a company so dominant fall so fast? The short answer: because every problem in your business starts as a leadership problem.

During the massive slide from 2000 – 2010, Blockbuster’s leaders made several key mistakes:

Ignoring Competitors: Netflix started as a DVD-by-mail service, offering a more convenient option than brick-and-mortar. Blockbuster’s leaders dismissed Netflix, assuming the old model would prevail.
Infuriating Customers: Blockbuster relied on late fees for nearly $800 Million per year of its annual revenue. Customers hated these fees, but it accounted for 16% of their top-line. When Netflix emerged, they took advantage of customers’ primary dissatisfaction with Blockbuster, and didn’t charge despised late fees.
Missing the Digital Shifts: Even as streaming became the future, Blockbuster clung to its retail stores. While competitors embraced the digital age, Blockbuster lagged.
Leveraging Too Much Debt: Blockbuster took on massive debt to expand its stores. When the market shifted, they couldn’t keep up with their financial obligations.
Missing Opportunities: Perhaps the biggest “what if” in business history—Blockbuster had the chance to buy Netflix for $50 million in the early 2000s. They passed.

What do all these mistakes have in common? All of these mistakes started with the decisions and actions of leaders.

Leaders at Blockbuster made choices that they believed were right but ultimately led to the company’s demise. These choices led to 84,000 people needing to find new jobs.

It’s easy to point fingers at these leaders and say, “How could they not see what was coming?” But the truth is, every leader faces critical decisions where people’s livelihoods hang in the balance. Only time will tell if these decisions are good bets. Unfortunately, sometimes, they get them wrong.

Our intent is not to shame Blockbuster’s former leaders. Instead, we want their story to remind you how important your leadership is — and that every problem in your business starts with your leadership.

Wait?!? What Did You Just Say?

If you’re reading this newsletter, it means you’re a leader. And that means every problem starts with you.

When we first told you that problems start with leadership, you may have been tempted to think, “It’s not my fault—it’s someone else’s.”

We often see this when we first start working with a company. The Front-Line Employee blames the Team Leader… who blames the Shift Leader… who blames the General Manager… who blames the Region Manager… who blames the Vice President… who blames the Senior Vice President… who blames the CEO… who blames the Front Line Employee.

As leaders, it’s easy to blame others for the problems in the business. But that mindset doesn’t help you solve anything. You can’t fix someone else’s leadership, but you can fix your own.

I know that it hurts to hear that your leadership is at the root of every problem your business faces. It hurts us to say it. We know it stings because anytime our business has a challenge, we have to look ourselves in the mirror and say, “you are the problem that is causing these problems.” (Or in the words of the great philosopher, Taylor Swift, “It’s me. Hi. I’m the problem. It’s me.”)

Recognizing this truth empowers you to solve the problem. You can’t solve business problems until you solve leadership problems.

That leads to the good news: you have the power to change your leadership.

The Good News: You Can Improve Your Leadership

This is where Unleashed Leadership comes into play. The Unleashed Leadership framework focuses on seven leadership traits that solve 95% of company challenges.

If you want to improve your leadership, start with three simple actions.

Take responsibility to unleash your leadership.
Even before you know what to do, take ownership of the problem and the solution.
Determine the root cause of the problems your company is facing.The root causes are Character, Competence, Capacity, Clarity, Community, Culture, and Consistency.
Unleash your leadership in those specific areas.
Once you know the root cause(s) of the problems, you better understand how to unleash your leadership. For example, if Consistency is the root cause of the problems, upgrade your Consistency.