Leadership Essentials

⏱ 8 min read

In a rush? Here is the quick overview.

The issue

• Leaders can make decisions that look financially or operationally sound while overlooking the human impact.
• When people feel treated like numbers, trust and loyalty can disappear even if the business logic makes sense.

Best practices for you as the leader

• Do not hide behind "it's just business" when a decision affects people.
• Think through who benefits, who is hurt, and how you will address the people impact before communicating the decision.
• Build the people piece into your “why” so stakeholders understand both the business need and the human consideration.

Key takeaway

Strong leaders make business decisions with people in mind, because trust is often the difference between acceptance and lasting damage.

The Problem at Hand

Leaders have to make hard business decisions all the time.

You may need to change a compensation plan, restructure a team, eliminate a role, increase expectations, shift resources, or make a decision that benefits the business but disappoints some of your people.

And sometimes, the business decision really does have to prevail.

But here is where leaders get into trouble: they make the decision from a spreadsheet, an operating model, or a financial need, and then communicate it as if the people impact is secondary.

That is when trust starts to crack.

Because in business, it is never just business.

It is always about people.

My Pilates Story

I’m a Reformer Pilates junkie.

I love the strengthening and lengthening workout combination. I love that it targets small muscles and challenges your balance. I love how I feel when I walk out of a good class.

Mostly, I love that I can exercise lying down on a comfy reformer bed.

For the last decade or so, I’ve gone at least three times a week, which means I’ve become pretty savvy. And yes, maybe a little picky. I know the kind of class I like, and I definitely know the instructors I want to follow.

One day my favorite instructor left my studio to open up her own.

She reached out and asked me to come with her.

It was risky. I was a founding member of a national chain with a solid reputation, and because I was a founding member, I had a lifetime rate.

And let’s be honest, Pilates memberships are not exactly cheap.

She offered me a founding member rate that was slightly more than what I was already paying. I hemmed and hawed over the decision.

• What if she didn’t like owning a studio?
• What if the business didn’t make it?
• What if she changed her teaching style now that she was the boss?
• What if? What if? What if?

Ultimately, because I loved her classes, I decided to take the risk. I canceled my national chain membership and took the plunge with her.

For the next 18 months I patted myself on the back for my decision.

Her studio was great. The instructors she hired taught the same quality classes she did. Many of my former studio buddies came over, too.

A new family was formed, and my butt had never looked better.

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The Plot Twist

At the end of those first 18 months, she decided to expand the size of the studio and offer additional types of classes.

Good for her, I thought.

The new classes weren’t really of interest to me, but I appreciated her entrepreneurial spirit.

That is, until I received her email to the 20 founding members.

It started with something like this:

“Dear beloved founding members, I so appreciate you and your faith in me…”

She spent a paragraph or so thanking those of us who had taken the leap and helped her get the business off the ground.

Then she announced a rate increase.

I'm not talking a small increase.

She essentially wiped out the founding rate. In 30 days, we were going to pay the same rate as everyone else.

Her why?

Her costs were going up because of the expansion, and we were going to help fund it, whether we wanted the expansion or not.

Anyone else see the problem?

“It’s not about the money. It’s the principle.”

I wish she could have heard a group of us discussing her email the next day.

Everyone said some version of the same thing: “It’s not about the money. It’s the principle.”

And the truth is, most of us could afford it.

We still loved her classes. The new rate was competitive with other studios in the area. From a purely financial standpoint, she probably felt the decision made sense.

But that was not the point.

By changing the deal, she changed the relationship.

We felt dismissed. We felt undervalued. We felt like the people who helped her build the business were now just numbers on her revenue plan.

As a result, I left her studio altogether.

Not for the savings, but because I couldn’t trust her anymore.

The relationship was damaged beyond repair.

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Leaders, This Applies to You Too

As a business owner, she made a decision that she felt would be best for her business.

Having current founding members fund her growth project was faster and easier than funding it herself and attracting new clients. And we were paying below current market rates so she wasn't "cheating" us out of anything.

But she forgot the bigger point.

The most damaging phrase a leader can use is:

"It's just business."

If you find yourself using that phrase to justify your decision, stop and rethink it.

Because here is what often happens when leaders roll out a decision with only the “this is what’s best for the business” explanation.

• Your team may listen.
• They may nod their heads.
• They may even say they understand.
• But inside, they may be thinking:
• “Do they realize how this affects me?”
• “Did they even consider what this means for the team?”
• “Am I just a number here?”
• “Is this still a place I want to stay?”

And once people start asking themselves those questions, trust is already at risk.

The LeDev Advice

You need a better 'why'.

And your why needs to include the people piece.

That does not mean every decision will make everyone happy. It does not mean every tough call becomes easy. It does not mean the business need disappears.

But it does mean you have done the leadership work before communicating the decision.

Before you roll out a major change, ask yourself:

• Who benefits from this decision, and how?
• Who is hurt by this decision, and how?
• What will people worry about when they hear this?
• What part of the impact can we reduce, explain, or support?
• If people lose trust because of this decision, is it still the right decision?
• What do they need to hear from me so they understand both the business reason and the human consideration?

When you take the time to think through the people piece, your communication becomes stronger, more honest, and more complete.

And sometimes, that process will lead you to a better decision altogether.

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This Doesn't Mean Shy Away

Let me be clear.

Leaders have to make tough decisions.

Sometimes the business decision has to prevail.

I have had to make hard calls throughout my career. I have executed high-profile terminations, made unpopular changes, and shut down entire divisions.

Each time, it sucked.

I lost sleep. I second-guessed myself. At times, I even hated the decision I had to carry.

But once I learned to think through the people piece, I had more confidence.

Not because the decisions became easy.

They did not.

But I understood who would be impacted, how they would be impacted, and what needed to be addressed. I understood who would benefit and how to communicate that clearly. And sometimes, in the process of thinking through the people impact, I found a better path than the one I originally planned.

That is the work of leadership.

Not avoiding hard decisions.

Making them with your eyes open.

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Back to the Pilates Studio

The owner did not just lose my monthly fee when I canceled my membership.

She lost a loyal fan.

I used to rave about her studio to anyone remotely interested in Pilates. Now I am the person quietly telling the “buyer beware” version of the story at dinner parties.

And the sad thing is, the founder group all agreed we would have been fine with a smaller rate increase.

If she had acknowledged the deal she was changing, explained the need more thoughtfully, offered a phased increase, or given founding members a different option, she likely would have kept me.

Instead, she lost the entire fee, the loyalty, and the referrals.

So next time you are tempted to say “it’s just business”, Stop!!!

Because you may lose more than you gain.

Summary