Small Business Administration Administrator Linda McMahon: "I understand what businesses go through, the ups and downs, the good cycles and the bad cycles." (Alex Brandon/AP Photo)

Linda McMahon, the administrator of the Small Business Administration, was the co-founder and former chief executive officer of World Wrestling Entertainment, a professional wrestling enterprise that started as a 13-person regional operation and grew into a publicly traded global company with more than 800 employees. In an interview with Tom Fox, McMahon talked about the lessons she learned in building a business and her approach to management and leadership. Fox is a guest writer for On Leadership and the vice president for leadership and innovation at the nonprofit, nonpartisan Partnership for Public Service. The conversation has been edited for length and clarity.

Has navigating the government, including dealing with Congress, been a difficult transition after your experience in the private sector?

The SBA is the least partisan agency in government. Everyone wants the economy to thrive. Everyone wants businesses to grow and for people to be employed, so there is a great deal of cooperation across the aisle in the Senate and the House. I’ve met with almost every member on the small business committees. I listen to them because they hear from their constituencies. When I’m out in the field at our district offices, I report back to those members and let them know what I am hearing.

What do you see as the SBA’s strengths beyond helping provide capital for business development?

Part of what the SBA brings to the table above and beyond the loan aspect is our counseling and mentoring — helping businesses with their business and marketing plans, their website construction and their overall needs. Sometimes you take a great idea and start a business, and other times the issue is how to scale a business. It’s our Women’s Business Centers and our Small Business Development Centers that help create the mentoring environment for entrepreneurs to start and to grow and to be successful.

What lessons did you learn in business that prepared you to be the SBA administrator?

When WWE started, it was primarily the live event business and we expanded it to licensing, to music to publishing to pay-per view and to networks. I created and grew a business. I understand what businesses go through, the ups and downs, the good cycles and the bad cycles. I learned about strict cash management, the impact of regulations and the need for providing health-care insurance to employees. I have walked the walk and talked the talk of our small business communities, so I can really be a strong advocate on their behalf.

Have there been any leadership role models who influenced you?

It basically has comes down to two people. One’s called trial and the other one is called error, and honestly those are the two factors that I think that really shaped my leadership growth.

Can you cite one of your biggest management challenges and what you learned from that experience?

When you are growing a business, you have to take risks. You have to be prepared to have some failures, but you also have to have a full understanding of how to manage that downside risk. I’ve declared bankruptcy and come out of that. I’ve hired some people that didn’t have the kind of background and experience that I wanted, and you have to move quickly beyond that. One of the hardest things is when you have really good employees who have served you well, but the business outgrows their expertise. Evaluating those employees and making those changes are very difficult.

Do you have any advice on the hiring of executives?

As a CEO, I sought to hire people smarter than I was in the field. I knew that my company was not going to grow and I wasn’t going to develop the expertise within the company if I did not hire people who had a track record of being very good and knowledgeable in their field.

How you would describe your leadership philosophy?

I set goals and expectations. I listen to the people around me for their feedback. I monitor and manage those executives. At the SBA, I have weekly meetings with the senior staff. I have really good people managing their divisions, and I expect leadership all the way down from the manager at every level to the supervisors. Those leaders and managers and supervisors are responsible for getting their tasks done and then it’s a reporting up structure to make sure that the total vision of the agency is being put forward. My management style is to hire really good people, give them clear goals and expectations and hold them accountable.

Besides weekly meetings, how do you keep in touch with your executive team and what is taking place in the organization?

My management style involves checking in with them along the way, giving guidance and communicating. 'What else do you need from me? Was something not clear?' Or it might be giving someone a pat on the back and saying, 'Boy, this is really moving even faster than I thought.' It’s also constructive guidance if the project isn’t moving in the right direction. It should never be a surprise to any project manager at the end of the project that they haven’t done a good job. As the leader, you have to make sure that they had all of the tools and advice and counseling you can give.

What would people be surprised to know about you?

I am the most comfortable in my sweats hanging out with my family and I am a jock. I was a real tomboy growing up. I played baseball with boys. I was singled out as the best athlete in school for the 8th grade, so I thought that was pretty cool.

What is your favorite sport? Is it professional wrestling?

Well, professional wrestling is an entertainment product. For pure sport as a spectator, I like the pace of basketball.

Tom Fox, a guest writer for On Leadership, is the vice president for leadership and innovation at the nonprofit Partnership for Public Service.

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