1Communication

HBS cites communication as the top skill needed to succeed as a business leader. “If you want to be an effective leader, you need to excel in communication,” the magazine said. “In fact, the success of your business relies on it.” The Economist surveyed more than 400 senior executives about communication skills, and here is what they said about the consequences of poor communication:

• 52% said the added stress negatively impacted business
• 44% said poor communication led to project delays or failures
• 31% cited low morale
• 25% said missed business goals

The leading causes of poor communication, respondents said, include:

• 42% Different communication styles
• 34% Unclear responsibilities
• 31% Time pressure
• 24% Lack of strong leadership

According to HBS, the essential communication skills for leaders are:

• Ability to adapt your communication style.
• Active listening.
• Transparency toward all employees.
• Clear, measurable directions.
• Asking open-ended questions.
• Empathy for others.
• Open body language.
• Receiving and implementing feedback.

Some studies have found that empathy, “the ability to understand and experience the feelings of another,” is the biggest single leadership skill needed. Some 96 percent of employees believe this, and 92 percent think that their employers undervalue empathy.

2Organizational Skills

HBS may have put organizational skills second on the list of leadership characteristics because entrepreneurs tend to be “big picture” thinkers and don’t want to sweat the small stuff. “Workplaces are filled with employees who lack direction because disorganized leaders don’t deliver and manage plans and strategies to guide their teams,” CIO.com said.

“What’s the chance of an unguided team maximizing its productivity?”

Or, as the motivational business speaker and author Chris Ducker said, “One of the biggest reasons why entrepreneurs nowadays struggle to grow their businesses is because they are simply wearing too many hats.”

Lack of organization by the leader stresses the entire business but can especially affect the bottom line. Critical organizational failures include:

• Not tracking spending and income.
• Not saving tax information.
• Not invoicing in a timely fashion.

Poor organization is also related to poor communication. A survey by the American Management Association found that 36 percent of managers, executives, and employees said they “hardly ever” know what is going on in their organizations.

Having high organization skills means knowing what needs to be done and when. The five “W’s” apply here. You need to know:

• What needs to be done.
• When it needs to be done.
• Who can do it.
• Where to find the necessary resources.
• Why it is important.

The “why” issue is not critical to execution, but it is essential to motivation and engagement. The “who” should do something leads to one of an entrepreneur’s most significant challenges: delegation. At some point, details start to become overwhelming.

“Only one in four employer entrepreneurs–business leaders who are founders of a company with at least one employee–have high levels of Delegator talent,” a Gallup study found. “Those with high Delegator talent posted an average three-year growth rate of 1,751 percent–112 percentage points greater than those CEOs with limited or low Delegator talent.”

Effective delegators share five key traits, Gallup found:

1. Know they can’t do everything themselves.
2. Ensure employees have what they need to do their jobs.
3. Focus on outcomes, not processes.
4. Communicate often with employees.
5. Develop team capacity using a strengths-based approach.

3Time Management

Closely related to organizational skills for effective leadership is time management. Wearing too many hats can wreak havoc on time management. Time is one of the resources you can’t create.

According to The Alternative Board, entrepreneurs spend 68 percent of their time tackling day-to-day logistics and tasks and just 32 percent of their time building their businesses with long-term strategic initiatives. A survey by Service Now found that entrepreneurs spend 16 hours a week on administrative tasks.

You can’t make more time, but you can get some back. One way to do so is to prioritize, but, as Stephen Covey said, “The key is not to prioritize what’s on your schedule but to schedule your priorities.” You must get some of those administrative tasks o  your schedule.

One way to figure out how to recapture time is by using the Eisenhower Decision-Making Matrix. The famous general and president differentiated between urgent and important tasks.

More time management approaches include:

• Timeboxing – reserve specific times for specific tasks to reduce multitasking.
• Iceberg Method – store information you will need later before forgetting about it.
• Autofocus Method – make a complete list of tasks and reading it until one stands out.
• Time Tracking – Time tracking tools like Time Doctor can help you understand how you are spending your time to make better decisions.

4Data-Driven Decision-Making

Effective leaders use data to gain insights and make objective decisions. Data is increasingly available to inform your choices. You make decisions by collecting data, extracting patterns from the data, and using those patterns to make the right call. Taking decision-making out of the realm of opinion and intuition leads to better outcomes. Few would say, “let’s not use data to make decisions.” Still, studies have found that:

• 58% of companies base at least half of their decisions on “gut feelings.”
• 70% of best-in-class companies rely on data to make decisions.

Business owners and leaders often think they know their market and their customers. You may, but you should constantly challenge and test assumptions.

According to Northeastern University, the effective use of data to make business decisions involves four steps:

1. Know your Mission. You need to know what you want to measure and why.
2. Identify data sources. Determine what database or databases will give you the information you need.
3. Clean and organize data. You can’t make a good decision with faulty data. Remove or correct data that is inaccurate, incomplete, or irrelevant.
4. Perform statistical analysis.  Run the numbers and determine how to present the results.

Then draw your conclusions.

Data-driven decisions don’t have to be about arcane datasets with millions of entries. Common ways businesses use data include:

• A/B marketing creating multiple versions of email subject lines or landing pages to see which gets more clicks.
• E-commerce analyzing purchase activity against factors like time of day or pages viewed before purchasing to optimize conversions.
• “Blind” recruiting removing data that might indicate race, gender, orientation, or ability from job applications to reduce bias.

Entrepreneurs who make decisions based on data build trust in their teams because they know that everyone is playing the field. There are no vanity initiatives or personal favorites.