Whether 2019 is the year you up the ante on your existing plan or put a new business strategy into place, take a leadership lesson—or eight—from the annals of 2018. Let’s take a look back at the year that offered a slew of successes and a few cautionary tales.
8 leadership lessons learned in 2018
From data security to developing leaders at every level, here are eight lessons learned in 2018. (For 12 more lessons, watch our leadership lessons webinar replay video.)
1. Data collection comes at a cost.
It’s no secret companies collect and archive customer data, but what surprised so many of us about the recent Marriott data breach was learning exactly how much personal data the hotel chain was collecting, including encrypted credit card details, travel histories, and even passport numbers. The kicker, in this case, is that the breach went unnoticed for four years.
A recent study by IBM put the average cost of a data breach at $3.9 million. In addition to fines and a drop in share price, a security incident will also cost you customer trust and loyalty.
The lesson: A security breach will cost you in more ways than one. Take your data security seriously.
2. Debt can dull your competitive edge.
The consumer shift from traditional shopping in favor of online behemoths has left many of us feeling nostalgic for the brick-and-mortar experience of roaming the aisles at old-line retailers like Service Merchandise, Filene’s and Toys“R”Us. And while some defunct companies crumbled under the weight of online giants like Amazon, Toys”R”Us was having cashflow problems long before Amazon was king.
As CNN Money explained, billions in debt prevented Toys“R”Us from remaining competitive. Not financially able to invest in remodeling and adequately staffing its stores, the company failed to create a pleasant shopping experience.
The lesson: You need to be flexible to bend with market changes and too much debt will stop you from doing that.
3. When opportunity calls, be ready.
Amazon’s search for its HQ2 location ranks among the top business stories of 2018. While much can be gleaned from Amazon’s decision, one lesson is clear: Prepare for the future, before the future takes you by surprise. Would Atlanta be welcoming Amazon if the city had proactively addressed its infrastructure and traffic issues? Maybe. As film director and author King Williams wrote in Saporta Report, the two winning cities have “density, walkable communities, and transit” in their favor, while the runners-up had a desperate need for “economic development following years of neglecting investment in civic programs and infrastructure.”
The lesson: Invest in the future, even if the future is uncertain.
4. Don’t deny and deflect.
Following decades of unparalleled growth, Facebook stumbled in 2018. Congress even summoned the social media platform’s leadership to testify on Capitol Hill. Questionable practices and a penchant for hiding things from the public caused its longtime users to rethink their allegiance. Even Elliot Schrage, Facebook’s former vice president for global communications, marketing, and public policy, acknowledged the tumult: “We failed to look and try to imagine what was hiding behind corners.”
Shining a light into those corners revealed a dark side. Facebook faced scandal after scandal from ignoring hate speech to its relationship with Cambridge Analytica. Leadership failed to accept responsibility or fix the issues.
The lesson: Step up, admit where you went wrong, and correct the problem quickly.
5. You need to be agile.
Harvard Business Review’s 2018 roundup of best-performing CEOs in the world revealed a common thread: longevity. While the average time-on-the job for CEOs at S&P 500 companies is about seven years, the average tenure of the CEOs on this list is a whopping 16 years.
Why have they lasted so long in their roles? Because they get results. These CEOs retain momentum when faced with challenges ranging from aggressive competitors to political uncertainty. As HBR observed, turbulent times require a steady leader.
The lesson: Know how to adapt to a shifting environment to keep driving results.
Join 10,000 companies solving the most complex people problems with PI.
Hire the right people, inspire their best work, design dream teams, and sustain engagement for the long haul.
6. Invest in-house.
Low unemployment in 2018 has affected the hiring landscape. While strategic recruiting remains a priority, smart hiring managers are also looking within to fill job openings (this is why it’s so important to nurture leaders at every level).
Mike Ferguson, who headed up Chipotle’s hiring division for more than 12 years, explained his role in encouraging employee development at Chipotle: “Our general manager internal promotion rate was well above 90 percent for the majority of my tenure,” Ferguson said, noting Chipotle’s College Assistance Plan, in partnership with Guild Education, as key to that success.
The lesson: Don’t overlook the talent already in your organization, and invest in their development.
7. Don’t do it yourself.
Tesla CEO Elon Musk’s emotional interview with The New York Times serves as a warning beacon for every business owner or manager who thinks they have to do it all. Musk said: “There were times when I didn’t leave the factory for three or four days—days when I didn’t go outside,” Musk told The New York Times in August. “This has really come at the expense of seeing my kids. And seeing friends.”
Good business leaders know that they can’t work in the business forever. They need to put the right people in place to manage day-to-day operations so they can instead work on the business.
The lesson: Hire smart, trust your team, and know when to let go.
8. Transparency drives loyalty.
Transparency is more than a business buzzword; it’s a way of life. Consider Everlane’s meteoric rise from niche e-tailer to household name. As Fast Company reported earlier this year, Everlane utilizes social media to give customers a glimpse into its factories so they can meet the workers who make their clothes. The company also shares a price breakdown of each item it sells. This way shoppers can see exactly what the markup is between the sales price and cost to produce.
The result is a profitable company whose customers have become brand advocates. Everlane is heralding a new era of retail transparency serving as a business model for other upstart fashion brands like shoemaker M.Gemi and technical clothier Aday.
The lesson: Transparency is the new normal.
While 2018 has been a year of record highs and precipitous lows, the bottom line is this: business leaders must focus on long-term growth. As we enter 2019, consider this observation by Warren Buffett: “Nobody buys a farm based on whether they think it’s going to rain next year. They buy it because they think it’s a good investment over 10 or 20 years.”