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Leadership FAQs

Be all you can be with these top FAQs on entrepreneurial leadership skills.
December 21, 2005
URL: http://www.entrepreneur.com/article/82452

What is open-book management?
Open-book management is the concept that key employees should be able to see and understand a company's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the company's success.

Secrecy can be counter-productive when employees assume the company owners are reaping wealth from the firm and they're getting unexciting salaries. They may be unaware that most of the profits are being put back into the business. Creating an open-book management system can curtail this resentment, and also give employees the chance to come up with ways to improve the numbers.

Do I need an advisory board?
Many businesses fail because they don't have an advisory board, but putting together a strong advisory board and using it well can mean the difference between success and failure. To set up your own advisory board, look for individuals whose business acumen you admire. Include members with a variety of areas of expertise, both in general business and specific to your industry. Establish a term of office and make your expectations clear--when and for how much time do you want them available, and what are you offering in return? A position on your board shouldn't necessarily mean a lifetime commitment; stagger two- and three-year terms to keep the board fresh.

Get the most out of your advisory board meetings by preparing for them well in advance. Choose a site that is comfortable and free of distractions. Solicit input for the agenda, and distribute important information ahead of time. Run the session as you would any professional meeting, and follow it with an action plan.

Finally, keep your board members informed of your company's activities between meetings. The fact that they've agreed to be on your board means they care about your company, and keeping up-to-date will help them be of greater value to you.

How can I learn to delegate?
Delegation is about handing over authority, and for many small-business owners, that's a scary concept because you don't want to give up control over any part of your creation. The key to controlling delegation is to establish what the tasks are, how they should be completed and what the final outcome looks like before you assign the task to someone. That erases the scariness--when you've clearly defined what's to be done and what the outcome should be, it's difficult for a skilled assistant or employee or even consultant to be unsuccessful. For more tips on learning to delegate, read this article .