Every business owner wants to maximize cash flow and profitability. But, one of the most common missteps they make is not having the right people in the right seats. Specifically, leaders and managers. This can cause confusion and frustration for staff, as well as management, when there are people in roles that don’t play to their strengths or there’s confusion about responsibilities. Every business owner should understand the difference between leaders and managers and how to get each in the right seat.
The terms leadership and management are often used interchangeably. In reality, there are significant differences. Leadership is the creation of a vision to guide change and empowering people to make the vision happen, despite obstacles. Managers set out to achieve organizational goals through implementing processes, budgeting, and staffing, for example.
Said another way, management is the process of working with others to ensure the effective execution of a set of goals. Leadership is about developing what the goals should be. It’s more about driving change.
I have the benefit of working with a successful company that has grown 20% each year for the past five years and is continuing to grow. The CEO is a visionary. He has the unique ability to picture things in his mind’s eye and then influence and align people with that vision. His COO is an outstanding manager, he has the ability to create tactical processes, tasks, and activities to achieve a certain outcome. Both of these executives are in their right seats and are continuing to increase revenue and profitability.
Neither a leader or a manager is more important to the organization. It takes both. Leadership is a quality that needs to be shaped. It takes emotional intelligence and learning how to influence others. For managers, possessing strong leadership skills can lead not only to better job performance, but also to an improved knowledge of how to influence the context in which decisions get made.