Within every firm, every leader (edge or center) faces challenges every day. Sitting here in 2020 as I write this book, the challenges presented by COVID-19 are seismic in terms of impact as well as being totally unanticipated. COVID-19 has forced firm leaders to examine their own firm down to its very core and to make decisions that challenged their leadership in ways never imagined.
COVID-19 has also resulted in new leaders emerging from the chaos of the pandemic to rise to a level of Edge leadership. Edge leaders will see the opportunities created by COVID-19 while center leaders will only see the challenges. Edge leaders will examine every challenge and find the opportunity making the firm stronger as a result.
“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” – Martin Luther King, Jr.
There is always a gap between the leader’s vision and what is actually taking place on the ground, day to day. There are always situations that develop that challenge a leader’s ability to remain steadfast in their leadership style and vision. COVID-19 with all of its ramifications provided an opportunity for firm leaders to step up to the edge and to face the challenge with courage, conviction, transparency and confidence – never wavering on culture or their future vision for the firm. Edge leaders got out in front of the challenge, communicating and demonstrating that they were in control, whereas center leaders let the challenge take control. Edge leaders responded to COVID-19 with clarity and focus surrounding the issues facing their workforce, their clients, their financial health and their future.
Challenges come in all shapes, sizes and colors – some tactical like adopting new technology, some strategic like moving into a new market and some presenting challenges that were never thought about before like COVID-19.
There are six major challenges that all leaders face on an almost daily basis. Edge and center leaders will face and address each key challenge differently. Edge leaders figure out how to address the challenge in a way that aligns with their vision for the future and the culture they have created. Center leaders will tend to address the challenge tactically, allowing the challenge to change their vision and expectations.
The Six Major Leadership Challenges Facing Firms
1. Creating/maintaining client-centered focus: Everything the firm does should be anchored in and in consideration of the actions, policies and processes that affect the firm’s clients. An important and common aspect necessary for a successful client-centered focus is talent.
Most firms have a strategy relating to retaining and recruiting the best talent for every position in the firm. There is recognition that talent is the firm’s greatest asset and the greatest contributor to the firm’s ability to excel within a client-centered model. Edge leaders recognize the significant importance of the talent strategy to the longer-term success of the firm, and they will not give up on this strategy when profits are challenged.
The challenge from COVID-19 resulted in most firms having to reduce their workforce through furloughs or layoffs. Center leaders approached these workforce issues through the filter of profitability and cash flow. Edge leaders approached the same workforce issues through the filter of the longer-term strategy of the firm and were quick to figure out how to effectively utilize and manage a remote work force. When I asked one of my client firm leaders about this challenge, he stated that their talent strategy was so critical to their longer-term strategy that they had to address the challenge in a way that did not affect their talent strategy. Edge leaders will address innovations such as remote work within the context of maximizing the client experience and the related talent strategy so that there is a constant alignment with the firm’s future vision and client-centered focus.
2. Relationships built on personal interaction versus virtual interaction: With all the time pressure on leaders and the availability of technology, it is easy to rely on Zoom or Teams, email or other digital technology for face time with partners, staff and others. Edge leaders always find the time to communicate and personally connect with partners and employees, understanding the importance to building trust that comes with personal interaction. Edge leaders value face-to-face interactions and will adapt to the future of remote workers in a way that allows for building relationships through personal interaction. In contrast, center leaders tend to undervalue face-to-face connection and focus more on face-to-face only when there is some issue to address.
In larger firms, it may be a challenge for the firm leader to have a personal relationship with everyone in the firm and that is understandable. However, the firm leader can ensure that everyone in a leadership position in the firm takes the time to build personal relationships with their team members. The Edge leader will ensure that his entire leadership team appreciates the importance of personal interaction as a major foundation for building trust. A good model that can successfully build the bond with staff is to establish a staff advisory council structured firmwide, by office, by region or by industry, depending on the size of the firm. Utilizing a staff advisory council will provide the leader with a direct link to staff when the firm is too big for the leader to meet periodically with staff one on one.
3. Building and leading teams, but not creating more followers: A leader’s ego can get in the way of how he or she looks at the people in the organization. Looking at staff as followers versus team members creates very different leadership attitudes and actions. As many articles on leadership address, a leader’s job is not to create more followers, but to identify and develop a standout team as well as future leaders. When a leader demonstrates through action and communication that everyone is an important part of the team, i.e., that every voice counts, then everyone will engage and everyone can excel. There is a world of difference between a standout employee or partner who is exceptionally talented but who operates in a self-absorbed vacuum, versus talented staff and partners who recognize that their focus is to make the team the best and the firm the best.
In a firm that I am familiar with, there was a partner who was extremely talented and who generated significant profit for the firm – but he was a classic example of a self-absorbed individual who put himself before the firm. The firm leader accepted that behavior and actually rewarded it through compensation. In this firm, every other partner lost trust in the leader of the firm and his words about teamwork fell on deaf ears. An Edge leader would first try and get the partner to modify his behavior, and if that couldn’t be accomplished, take more permanent action. The Edge leader understands the fragility of culture and the importance of living and supporting a culture that values talent and teamwork more than just individual talent. A center leader puts profits first and lets culture take a back seat. An Edge leader will always put culture first.
4. Inspiring everyone: A key responsibility of a leader is to inspire every member of the firm to believe in and be personally vested in the future vision as well as the strategies to drive the firm’s success. Inspiration leads to motivation, which leads to every member of the firm working to achieve the strategic objective of becoming a standout, high-performing firm. The challenge all leaders face is to remain steady in the face of adversity (e.g., loss of a big client, loss of some key team members, profit challenges that always occur in any firm, COVID-19, etc.). When the firm faces adversity, everyone looks to the leader for calm and direction. Unless they see the leader’s confidence, courage and conviction in addressing the adversity they will lose confidence and trust in the leader, the vision and the strategy.
Edge leaders understand that their responsibility to inspire and motivate is a constant regardless of how the firm is performing or the adversity it may be facing. They understand that at times of adversity, they need to communicate, inspire and motivate more. Center leaders don’t exhibit, and in many cases don’t believe that it is their responsibility to inspire and motivate – in their world, that is what compensation does.
5. Managing change: Change is inevitable in life and in every single organization. Sometimes change is created (e.g., implementing a new technology) and sometimes it comes out of nowhere (e.g., COVID-19). The challenge is how does the Edge leader manage change? When change is created such as a new billing process, the primary challenge is learning to effectively deal with those who disagree with your vision, plans and expectations as it regards the change and how it will be implemented. When change just happens (like COVID-19), the primary challenge is understanding the impact of the change and the opportunity it presents.
In both created change and unexpected change, there will be those who get behind the leader and those who become antagonists, resisting how the leader wants to address the challenge and/or implement the proposed change. Learning to deal with the antagonists, understanding their view, taking the time to explain your thinking to them and effectively addressing the concerns they raise will turn the resistors into supporters.
Edge leaders guide the firm to greater success in spite of, or based on, change. The challenge for any leader is to evaluate change and respond (whether change is anticipated or not) in a way that inspires confidence. The Edge leader understands it is important to communicate calm and reason when changes are occurring so that everyone remains confident in their mission and their leader. Edge leaders understand the importance of communicating the purpose of any significant change, why it is important to implement change, how the change will be implemented and what the expectations are relating to outcomes as a result of the change.
Edge leaders understand the importance of transparency and trust to successfully navigate the waters of change. Center leaders, on the other hand, tend to react to change and issue directives, which often leads to confusion and quiet rebellion when the leader does not take the time to explain the purpose for change. Change becomes a negative, versus a positive, and the expected outcomes/benefits are never achieved.
“If you let the passive resistors stop you, you will never get anything done since the passiveness shows up in resistance and you end up just churning your legs.” – Jim Pitrat, leader of Singer Lewak
6. Managing relationships internally and externally: Unless you are in a firm of one, managing relationships is a constant and significant challenge all leaders face. Building strong and supportive relationships is one of the hallmarks of great Edge leadership. Edge leaders excel at managing relationships and gaining the active support of everyone. They understand that it is all about confidence and trust in the leader.
To build successful relationships, the leader must communicate effectively and remain at all times a beacon of confidence in the future and in the importance of personal relationships. Center leaders tend to focus on a very narrow circle of people in terms of relationships and view most of the firm as being outside of that circle and therefore they pay little attention to building relationships outside their circle. Center leaders tend to undervalue the importance of broader relationships, even with clients where in too many firms, the center leader does not invest the time to meet with the firm’s key clients. Edge leaders, by contrast, understand the importance of meeting face to face with the firm’s key clients to gain insights into how the firm is performing. Edge leaders value relationships and take the time and effort to build and nurture relationships within the firm and external to the firm.
The above six challenges are by no means the only ones a leader faces, nor does every challenge present itself in every firm. Challenges are like rivers. Sometimes the river flows gently with little disturbance. At other times, after a storm, it can become a raging torrent.
Every firm and every leader will, over time, face each of the above challenges, but at different times and with different intensity; sometimes a gentle flow and sometimes a raging river. The key is for every leader to recognize the critical nature of these challenges as each relates to the ultimate success of the firm. The bottom line is that a leader’s ability to lead is more impacted by whether he handles challenges in a way that makes the firm and the team stronger or weaker.