Hartford Business Journal

20 Hartford Business Journal • February 18, 2019 • www.HartfordBusiness.com EDITOR'S TAKE Democrats send mixed messages to biz T here is a tale of two Democratic parties in Connecticut right now and it's unclear how the business community will respond to the mixed messaging. On one side you have Gov. Ned Lamont, an entrepreneur and optimist who has made economic development and creating a more business-friendly environ- ment a top priority. On the other side you have a Democratic-controlled state legislature determined to pass myriad policies that are anathema to some in the business community. Lamont has tapped key private-sector executives to run various functions of state government, from economic devel- opment to administrative services, with the hope of develop- ing more public-private partnerships, streamlining bureau- cracies and changing the negative perceptions of the state. He's even considering rebranding Connecticut. Meanwhile, House and Senate Democrats have united to back legislation that will mandate paid family and medical leave and a $15-per-hour minimum wage. Highway tolls are also likely. Oh, did I mention Lamont also supports these policies? What does this all mean? Democrats are sending an incoherent message to the private sector. The cost of doing business in Connecticut will surely rise by the end of this legislative session, meaning Lamont, as leader of the Democratic party, will have a difficult time convincing employers that things are truly changing for the better. It doesn't matter how many top executives Lamont has in his corner to help sell the state, or what new economic-development programs he unveils, what small- and midsize companies care most about is operating in a stable and af- fordable business environment. Paid family medical leave and a $15 minimum wage are both noble causes, but they will be an added burden to some employers, even though workers will largely be footing the bill for a medical-leave program and an increasing number of companies are already adopting the higher wage level. Many employers support giving workers time off to care for a new baby or seriously ill family member, but a one-size-fits-all government-mandated ap- proach may not work for some companies. Add in tolls and the threat of recession this year or next, and it's hard to see how businesses will be bullish about hiring or investing here. And the fact that other states are also adopting these more generous worker benefits isn't a valid excuse for Connecticut to follow suit, at least not right now. It actually presents an opportunity for the state to distinguish itself from other high-cost locales like New York and New Jersey. Lamont's best bet to instill business confidence will be to come up with a state budget that provides long-term stability, without soaking businesses and resi- dents with significantly higher costs. That too will be a challenge. When he presents his budget Feb. 20, the first-year governor will have to tackle multibillion-dollar deficits. His solution must lead with cutting costs and asking state employee labor unions for more givebacks. If he fails to pursue either of those fronts, getting private-sector buy-in will be diffi- cult. He also needs a long-term solution to the state's surging retirement-benefit costs. So far, Lamont has hinted he will take a moderate approach to the budget, as- serting in an open letter to residents that the state should brace for a lean two- year spending plan that restructures pension debt and lowers annual borrowing (both good things) and broadens the sales tax by removing certain exemptions related to the digital and service economy. That could be a reasonable tactic to raise new revenues, but why not lead with ways in which he will further shrink the size and scope of government? Instead, all Lamont promised was that he'd "hold the line on the operating budget." The good news is, no budget has been proposed yet and no bills have been ap- proved by the legislature. So we should all give Lamont a chance to prove himself. But a positive tone and outlook alone won't convince businesses that this state is headed in the right direction. It's policy actions that promote growth and encourage investment that will. OTHER VOICES Leadership lessons from high-performing leaders By Ronald Recardo M any books and articles have been written about our never-ending quest to be a "world-class" leader. My firm — The Catalyst Consulting Group — recently interviewed more than 500 high-performing senior ex- ecutives across a range of industries to try and identify the attributes that separate the leaders who walk on wa- ter from those who are underwater. Here are the top 10 most important attributes for outstanding leadership: Leaders cannot save their company to prosper- ity. Anyone with an eighth- grade education can improve the financial performance of their organization by cutting costs. In downturns, the highest-performing leaders use cost-cutting to stabilize their business and then quickly focus on implementing a targeted growth strategy to increase the top line. Good leadership does not equal being liked. Many executives interviewed believe there has been a considerable dummying down of senior leadership over the last five years. Too many leaders are afraid of making tough decisions for fear of alienating colleagues, and open up their flanks to attack at a later date. High emotional intelligence = engagement. Executive effectiveness is constrained by a leader's ability to read situations, properly discern oth- er people's feelings and understand verbal/non-verbal cues. In addition, leaders must understand how they are being perceived and how to influ- ence different stakeholder groups. Think strategically, but have good executional skills. The leaders of tomorrow must have the ability to think conceptually and strategically in understanding very complex busi- ness challenges. Leaders must be- come facile with data analysis to fully understand their markets, competi- tors and customers, identify unmet needs, and then be able to align their business model and growth engines. Too much collaboration equals abrogation. Business is not a de- mocracy, nor does it have to be a dictatorship. The highest-perform- ing leaders are not afraid to make unilateral decisions. The voice in their head is most likely the reason they are sitting in the corner execu- tive seat. If a leader does not listen to this and exercise his or her 51 percent vote, that leader is the one most likely to not have a seat when the music stops. Effective leaders understand per- formance drivers. Many leaders lack a clear understanding of the cause and effect that drives organizational per- formance. If a leader understands the drivers of business performance, then that leader can develop leading met- rics that can predict business results. Attract, develop and promote staff based on impact, not ancillary fac- tors. Most organizations today spend a considerable amount of time com- municating the importance of talent management, but all too often key positions are staffed with a bunch of "empty suits." Look at the organiza- tion charts of many companies and one cannot help but see similarities in the dominant coalition. A dispro- portionate number of the executives: • Have identical company pedigrees (for example, all GE or Pepsi folks); • Have similar educational criteria (all third-generation Ivy leaguers); • Have very similar socio-demo- graphic characteristics; • Are promoted based on developing a tight relationship with a sponsor and not through achieving results. "A-players" only want to report to and work with other A-players. The highest-performing leaders set ag- gressive goals, hold staff accountable for results and get rid of the bottom feeders. A-players will not accept reporting to "C players" long term. They will get very frustrated and reduce their effort or leave. Don't play the game not to lose — be a calculated risk taker. In football when a team is ahead in points and it's the waning minutes of the game, they often use a "prevent-defense" strategy to make it hard for the other team to score. The same analogy holds for business. History is replete with examples of leaders who played the game of business not with an eye toward winning, but not to lose. Establish and manage your cul- ture. The best leaders have realized that culture is malleable and can be changed over time, and an organiza- tion's culture must be closely aligned with its business strategy. Ronald Recardo is the managing partner of The Catalyst Consulting Group LLC, a Shelton-based business advisory firm. Opinion & Commentary Greg Bordonaro Editor Ronald Recardo

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