As the Australian Government relaxes the corona virus restrictions and attempts to reopen the economy, I’ve been reflecting on how we at Pemba and our portfolio companies have performed during these unprecedented and challenging times and what it is that sets great leaders apart from the rest.
I’ve been exceptionally impressed with how the leadership team at Pemba have really stepped up and taken such a proactive approach to ensure the impact on the portfolio has been limited. I’ve also been immensely proud of how many of the management teams of Pemba’s portfolio companies have responded to the COVID-19 crisis. Most have led from the front and taken decisive actions, which has often involved having to make extremely difficult decisions to navigate the businesses through this period of adversity.
In my opinion, the real measure of a leader comes when things aren’t going well – when the going gets tough.
From what I have seen during this crisis, there seems to be three types of leaders who each react to adversity in different ways. For this, consider the challenge of climbing a mountain:
- One will get to the base of the mountain, look up, and say, “I can’t climb that” and quit.
- One makes it about half-way, declares it a success and stops.
- One can’t stop striving for the top of the mountain, no matter what it takes.
The first type of leader quickly gets overwhelmed. They can’t see a route up the mountain. These leaders can’t react to adversity productively. No great leader has ever had this mindset.
The second type is the most common. These leaders get to their comfort level and set up camp once their definition of success and satisfaction is reached. In other words, they stop at the point where overcoming the next level of adversity isn’t worth it to them.
The third is emotionally resilient. These leaders are able to maintain their productivity and performance in times of challenges.
What is the greatest predictor of a successful leader?
As a society, we so often emphasize the importance of talent in creating success and this is one of our biggest mistakes. Anyone can have talent if you invest time in developing skills, but what they decide to do with that talent and if they actually succeed depends on grit.
Angela Duckworth (Professor of Psychology at the University of Pennsylvania and author of Grit: The Power of Passion and Perseverance) has spent years studying people, trying to understand what it is that makes high achievers so successful. And what she found surprised even her. It wasn’t exam scores. It wasn’t IQ scores. It wasn’t even a degree from a top-ranking business school that turned out to be the best predictor of success.
Beyond IQ, talent, and whatever else has any kind of effect on anything, what most affects your ability to achieve your goals is grit. Whereas some people assume that talent is innate, research shows that talent is really grit, that is, it is wholly dependent on one’s practice of it.
What is grit?
As Duckworth defines it, grit is passion and perseverance for long-term goals. Passion meaning long-term commitment to a goal and consistency of interest and perseverance meaning overcoming setbacks, hard work, and finishing things, rather than giving up.
“You just can’t beat the person who never gives up” Babe Ruth
Grit isn’t talent or luck. It’s about having a long-term goal – something you care about so much that it gives meaning to almost everything you do in your life. This obsession and deep determination ends up fostering a sort of mental toughness, which can define your success or failure.
Another way to put it is that grit is one’s willingness to be uncomfortable in pursuit of their goals, or to improve their current circumstances. It is simply one’s ability not to chase comfort, but to stay focused on journey to the top of the mountain, and be willing to incur the discomfort that comes with the ascent.
According to Duckworth, there are four defining characteristics to grit:
- Interest and passion: A gritty person enjoys what they do and are committed to their long-term passions.
- Practice: Someone with grit will dedicate themselves to practicing every day, and always striving to be better than the day before.
- Purpose: Someone with grit will understand their purpose and why they do the things they do.
- Hope: A gritty person must have hope, it’s a critical element of perseverance.
Why is grit important?
Grit is what enables us to achieve long-term goals and overcome adversity. It is for this reason that grit is the most critical quality that an entrepreneur has.
While there are always outside variables that we cannot control, like the health of the economy or market influences, a gritty entrepreneur will continue to fight through and will find ways around obstacles despite the hardship or setbacks. Those who can rise above and bounce back because of their perseverance and passion are the gritty ones.
How can you develop grit?
The good news is, you can cultivate or better still grow your grit. It’s a skill that can be learned and practiced over time.
- Become adaptable – The third leader accepts whatever adversity comes their way. Rather than worry and anticipate the worst, they always look for the best ways in which they can move forward.
- See the long game – A big part of overcoming adversity is seeing the long game – postponing momentary happiness in favour of delayed results. This is where leaders with emotional intelligence excel. Their emotional stability allows them to persevere towards goals despite increasing adversity.
- Avoid discouragement – To overcome adversity leaders need to avoid letting setbacks from demoralising them. “Every strike brings me closer to the next home run” – Babe Ruth. When things go wrong, it can be easy to start feeling as if there’s no point to your work. But you have to catch yourself before you let adversity affect your decision making. Not doing so can be disastrous. Employees follow the example of their leader so when a leader gets visibly discouraged, their attitude can quickly spread to others. And when a business becomes infected with this mindset, it becomes much harder to put up with everyday problems and frustrations – and see the small successes. Of course, you have to be realistic and recognise the times where you’re chasing a lost cause, but in general, a leader who is easily discouraged is a poor leader.
Challenges and difficulties are guaranteed experiences in life and business and there are undoubtedly numerous challenges and uncertainties lying ahead. However, I feel exceptionally positive about the future and am very fortunate to be working alongside such gritty colleagues, management teams and founders.