Employers Need to Reflect, Then Lead

Leadership effectiveness is a very hot topic today. A basic Google search for "leadership books" will return more than 250 million results. It's safe to say that there are a lot of opinions on the subject.

We are all humbled by the question of what true leadership is. What are the best qualities of a leader? What does it look like? How does one become a great leader?

When I think about these things, I can't help but remember the words of a CEO I once worked with. He said to the company's management team, "Don't tell me how to run a hot dog stand until you know how to make hot dogs and have run the stand."

His metaphor has always resonated with me because of its simple truth: Experience is wisdom. Therefore, we need to learn from our experiences.

As business founders, managers, and leaders, we often turn to promising academics and white papers for advice on how to be better leaders. However, I take a different approach. I truly believe that with years or even decades of leadership experience, we already have the answers. We just need to stop to reflect, and then we can lead better.

I have been running HR functions for two decades and have had the opportunity to be a part of companies with amazing management teams and cultures. The most rewarding experience of all has been my last year at YapStone as chief people officer.

Our company is what I call a "stable startup": It has a strong business model and a proven track record of sustained and profitable growth. That being said, we also face the inherent challenges of being a hyper-growth tech company in an industry ripe for disruption – i.e., financial technology. Today, we are at a pivotal point in our growth, and we have learned firsthand that building a phenomenal business doesn't always equate to being a phenomenal company. With this knowledge, YapStone CEO Tom Villante and the entire management team have committed themselves to putting our company on the list as a great place to work. In order to succeed in this goal, our management team has embraced self-reflection; we have begun our journey of transformation by learning from our shared experiences.

YapStone has experienced tremendous growth in the last three years, building a world-class management team of tech and payments experts, growing from 130 to 350 full-time employees, expanding to four offices in four different locations, and tripling company revenue from $88 million in 2013 to $235 million expected in 2016.

Today, I want to share a number of insights we have learned about leadership from this phase of massive growth:

Change on the Outside Is Easier Than Change on the Inside

The best business schools teach us that the external environment is always changing and to be competitive means staying in front of that change. What you don't learn in business school is that, when it comes to the internal workings of an organization, employees resist change while leaders avoid driving internal change – probably because it requires managing through the relational components of change.

At YapStone, we experienced unprecedented headcount growth in the last few years. During this time, we realized that a company with 350 people is very different from one with 100 people. It was unrealistic to try to manage the company in the same way. We also knew that change on the outside is easier than change on the inside. With this in mind, we re-evaluated our approach. We revised our processes and infrastructure to support our growth and set the company up for success as we continue to scale.

We know that our company is changing and will continue to do so. To manage this change, the management and leadership teams consistently discuss the following questions:

What are the skills required to meet today's business needs, and what skills are required for the business 18 months from now?

Do we have the right people in the right roles at the right time?

How are decisions being made?

What is the communication architecture within the company? Are messages timely, consistent, and aligned with our employees?

As leaders, we discuss a variety of organizational topics in order to strengthen our "change muscles." We know we need to drive change within the organization while making employees comfortable with the idea that nothing stays the same. Change management is a critical competency for success.

It's Not Simply What You Do – It's How You Do It

Every day, leaders must make a variety of decisions both tactical and strategic. Hopefully, you are discussing strategic topics and answering tough questions during your leadership meetings – questions like, "Do we have the right people in the right roles at the right time?" If you are honest, the answer will most likely be "no." Then the real question becomes, "What do we do about it?"

A logical next step would be to conduct a talent assessment where you identify the current and future needs of the business. At that point, you should be able to identify employees who are not aligned with the company's needs. It is important to next assess whether these employees can be re-skilled in a realistic timeframe to meet the scaling business demands.

The outcome may be that re-skilling is not feasible. As a leader, you may be faced with a serious problem: an employee you hired years ago doesn't have the skills needed for today's business demands.

This is a challenge that we have faced at YapStone, and our management team learned a very important lesson in change management as a result: It's not just what you do, it's how you do it. It is very important to communicate what you are doing to employees – and even more important to explain why you are doing it. As a leader, you need to have not only an action plan for implementing changes that impact employees, but also a solid communication plan.

Your plan should have two key elements: inclusion and communication. In terms of inclusion, your overall plan should include front-line managers in the decision and incorporate them in the change implementation. It is instrumental to be inclusive of people managers in order to achieve the desired results.

In addition, leaders must be strategic and aligned in their communications to employees. It's imperative that leaders set the context for why the change is occurring and outline the impact on each employee and the overall business. Remember, employees resist change out of fear and are very concerned with how change will affect their roles, their teams, and their managers.

If you establish a solid action plan, include management team members, and build a strategic internal communications plan, you will be able to help your employees become more comfortable with the changes that will impact them.

Own Your Wrongs and Make Them Right

The current stereotype is that all leaders are the wisest and smartest people in the room; they are most definitely always right. Many leaders believe that being wrong is a sign of weakness and a vulnerability that must be hidden from their bosses and teams.

In my experience, however, an authentic leader is a person who is responsible for their words, actions, and decisions. This leader owns their mistakes, doesn't hide from them, and refrains from passing the blame. Authentic leadership is most powerful when you not only take accountability for a mistake, but also learn from it and make the changes necessary to correct it.

At YapStone, we embrace authentic leadership. Every six months, we host a pulse survey and ask our employees how they feel about working at the company. We also ask them to assess their relationships with their managers.

As a result of the pulse survey, our leaders have stood up in front our employees and taken accountability for their bad decisions, missteps, and misses. YapStone leaders have also committed to quarterly action plans based on the survey results in order to increase employee engagement. As the chief people officer, I am very proud that our commitment to becoming a great place to work is paying off. Our eNPS (employee net promoter score) in our technology functions saw unprecedented improvement in just six months, and we are excited to build on this momentum in 2016.

When leaders are accountable for their mistakes and failures and act on employee feedback to make timely, substantial changes, they can right their wrongs and realize their potential as authentic leaders.

Be the Change You Want to See in Your Company

To be a company leader is to have power, but very often, the leader becomes part of the problem by flexing the wrong type of power. In my experience, there are two types of leadership power: positional power and personal power.

Have you ever worked for a boss who led by title alone? A boss who demanded respect because they happened to be the "V.P. of Whatever"? This is an example of a leader who flexes "positional power."

On the other hand, have you ever had a boss who followed through on commitments, had your back when there was an issue, took an interest in your development, and had the courage to address issues that others avoided? If you have, then you should consider yourself fortunate – you had the chance to work with a leader who has "personal power."

By tapping into personal power, a leader can be the change a company is striving for simply because employees will model their behavior. At YapStone, we know that our personal behaviors as leaders have a great impact on company culture because of our positions of power.

From simple process shifts to more meaningful cultural changes, a leader must model the behaviors they want to take root within the company. I can tell you from experience that the staff will follow.

To address cultural issues both small and large within our company, our management team began by asking a few simple questions about our own leadership:

Are we showing up to meetings on time?

Are we committed to having one-on-one meetings with our employees?

Are we sharing the right information that will help employees do their jobs better?

Are we recognizing employees?

We knew that if wanted to implement real change at YapStone, it had to start with our leadership team. By changing our behaviors, we have been able to shift the behaviors of our employees. The end result has been a more positive work environment and company culture. Based on our positive eNPS results, we are truly making progress by being the changes that we want to see.

In Summary

It's hard to be a good leader. It's easier to get the title than it is to make a positive impact once the title is in your hands. In dynamic, hyper-growth companies, leadership needs to grow and change as the company does. As a financial tech company aiming to revolutionize the payment industry, Yapstone has firsthand experience with this. I can attest that the company we were one year ago is definitely not the company we are today because our leadership team made a commitment, took the time to reflect on what we needed to change, and then began to lead by example.

Our YapStone leadership journey actually reminds me of a skiing experience I once had. As I struggled down a black diamond run with my ski instructor, he told me to stop. I slid to a halt, looking reluctantly down the mountain at how far I still had to go. The instructor casually stopped next to me and told me I was looking the wrong way. He pointed in the opposite direction and told me to look up the mountain. I turned and stared in amazement at how far I had come. He then told me to look down. With confidence, I did.

Then he asked me, "What do you think about the rest of the run now?"

That experience on the mountain has been a valuable lesson for me throughout my professional career. By allowing ourselves a few minutes to reflect on where we have been and where we want to go, we, as leaders, can gain the fresh perspectives we need to instill our companies with more confidence and meet the growing demands and challenges of running a business. Whether you have five years of experience or two decades, I firmly believe that you already have the solutions to the challenge of becoming an effective, authentic leader.

You just have to reflect first – and then lead on.

Debra Tenenbaum is chief people officer at YapStone.