Leadership Strategy

5 Ways Bad Leadership Can Destroy Your Business

Lead your team from the front.
5 Ways Bad Leadership Can Destroy Your Business
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VIP Contributor
CEO and Founder of Fit Body Boot Camp
9 min read
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Contrary to what you believe, you don't have a marketing or sales problem. Most businesses think they do. In reality, they have a leadership problem. That's one of the biggest lessons you can learn as an entrepreneur, and it will radically change the way you lead your team and the trajectory of your success.

Related: 50 Rules for Being a Great Leader

As an entrepreneur, you can't hide in the background. By default, you're the person who will make the big decisions for your company. But, while leadership is something most entrepreneurs think they have, the truth is that few actually possess the skills they need to lead. And when you simply "play" the role of leader, rather than actually step up and lead others, your business can crumble as a result.

Today I want to share with you five ways bad leadership destroys businesses. If you can relate to any of these, take action and course correct immediately -- your business will multiply exponentially if you do.

Poor vision for the future

This is when CEO have a general idea of their business's ultimate vision -- maybe they want to sell X number of products by Y date -- yet they have no idea how to break that vision into daily, weekly, monthly, quarterly and annual benchmarks. They couldn't tell you how many products they need to sell on a monthly basis, or how many leads they need to generate per month from their marketing campaigns.

Of course, the other scenario is when entrepreneurs know what key performance indicators their business has to hit and by when, yet their "greed glands" secrete and they begin to make moves out of desperation. They become so infatuated with their big goal that they'll do anything to sell off their product or service, even if that means selling to the wrong target audience who wouldn't get the value or the benefit of the product. That only leads to customer complaints, frustration and overworked customer support.

You have to ask yourself, what do you want your business to look like? And by when? Those are the first two questions you need to answer if you want to construct a clear vision for your business.

Let me give you an example. I have a clear goal for my fitness franchise, Fit Body Boot Camp: I want each of my owners to own multiple locations. But, why does it matter whether 650 people own 650 locations (one per owner) or 325 people own 650 locations (two per owner)?

Because when we have fewer franchisees owning more locations, it means I can keep my team at our headquarters smaller and thereby pay them even more than I do now. It means that each of those owners will be more profitable and win more freedom in their personal life. That vision gives us a clear objective to work toward for years to come.

Related: 10 Books Every Leader Should Read to Be Successful

Not investing in your team's development

So many entrepreneurs, both new and experienced, expect to hire team members that are pre-installed with their same work ethic, resilience and skill set. That's not going to happen, because you've been in the game much longer than they have.

But, those false expectations often lead to animosity between entrepreneurs and their employees. That's how toxic work cultures emerge: The business owner doesn't want to fire the employee, while the employee sticks around out of fear of change. Soon, those feelings of resentment deepen by the day until neither the owner nor the employee can even stand to be in the same room together. Ultimately, either the entrepreneur gets frustrated enough to fire the employee, or the dissatisfied employee quits on them.

That's why you need to hire team members, not employees. Employees clock in late and clock out early. Team members are those willing to devote their time and energy to your vision. As a leader, your job is to invest in your team's personal development so they can perform at their absolute best as team members, not employees.

How do I invest in my team? I pay for them to go to the best conferences and seminars out there so they can learn new skills. When they get back, they present what they learned to the rest of our team, and we talk about how we can apply what they learned to our business. Sometimes I even hire experts to teach our team new skills and strategies so that our team levels up as a whole.

Related: 22 Qualities That Make a Great Leader

Hanging on to a toxic employee

As the boss of your business, your job is to give your team members rope. That just means you provide them with the resources and support they need to grow, both in their role and as a person (just like I mentioned above).

Most of your team members will take the rope you give them. They'll develop stress tolerance, anxiety resistance and better work habits. Yet, every now and then, one of your employees will use that rope to hang themselves instead. He'll disengage and do his own thing rather than buy into your culture and vision.

The worst thing you could do for your business is hang on to that employee. Here's why: When you keep around an underperforming employee, you send a message to the rest of your team that you tolerate mediocrity. Eventually everyone else on your team plays down to that level, too.

So, the lesson here is to hire fast and fire slow. Give your willing team members the chance to develop, but warn those that are cynical and refuse the rope you're giving them. If they still refuse, you have no choice but to cut ties with them.

Related: 15 Ways to Lead With Effective Communication

Lack of communication

Harvard Business School professor Boris Groysberg did a study and discovered something staggering: Mega corporations Nokia, Star Princess Cruise Lines, Enron, British Petroleum and Thai Airways all met their downfall because of poor communication. Poor communication happens for two reasons: because entrepreneurs make assumptions about their team members, and because they don't want to hurt their team members' feelings.

Once again, if someone assumes that one of their team members knows what she's doing, yet in reality that team member is clueless, then the boss begins to feel resentment and frustration toward that person -- all because no communication was initially established between the two parties.

Yet, so many entrepreneurs also fail to have tough talks with their team members. They don't have it in them to call out something a specific team member needs to do better, and they therefore miss the chance to coach that person up to a higher level.

I once had to speak with one of my team members who was coming in late and calling out sick all the time. We had a heart-to-heart where I told the guy, "Hey, you're always late and out sick, and it sucks because I know you're an amazingly talented individual. I need you to be more consistent or we'll have to part ways."

He initially told me that he could do it, but after a couple of days he turned in his two weeks notice. That was what was best for both of us. He wasn't in a position to prioritize work, and I needed someone who would be consistently on time. Without that communication, he would have been stuck doing something he wasn't meant for, and I would have been stuck with an underperforming employee.

Related: Inspirational Quotes From 100 Famous Business Leaders (Infographic)

Indecision

Entrepreneurs who are indecisive cost their businesses more money than those who are decisive but make the wrong decisions. General Norman Schwarzkopf once famously said, "When in charge, take charge." And he was right.

Simply put, you have take action, then make adjustments. As an entrepreneur, you make a lot of decisions on a daily basis. It's OK if a lot of those decisions end up being the wrong decisions; all you have to do is pivot and course correct.

So, why is that so hard for entrepreneurs to grasp? It's because they have a fear of failure. They don't want to look stupid in front of everyone else. The irony is that you actually look better in the eyes of others when you can rebound after a bad decision.

Last year, we rolled out a special promotion that our Fit Body Boot Camp clients could redeem through Costco. I was gung-ho about the deal and thought it'd work out, but after hearing feedback from our franchisees, I realized that it wasn't a good deal. Rather than sit there and twiddle my thumbs, I listened to my franchisees and pulled the deal. The result? I earned their trust, because now they know that if I do something that doesn't pan out for them, I'll course correct until they're satisfied with what I offer them.

Leadership isn't something you're born with. You can learn and develop your leadership skills over time. Really, that's the wisest investment you can make, because strong leaders make more money in business, command more respect from their colleagues, and achieve at a pace that the rest of their industry can't keep up with.

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