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Tuesday, November 29, 2011

The Difference Between Management and Leadership




Most of what is taught in business school has a focus on steady, incremental improvement.  I don’t want to throw that out.  I do, however, suggest that businesses can create quantum leaps.  And the difference between the two processes is what defines leadership.

So, where do I start?  I ask:  What’s the difference between a manager and a leader?  Managers become managers because they were great at solving problems.  Those that make the transformation become senior managers.  Senior leaders transform from problem solvers to problem creators.  If a President or CEO spends more than 5%-10% of their time solving problems, they need to devise a plan to change that. 


What do I mean by creating problems?  When Jack Welch became the CEO of GE, he declared that every business unit had to be ranked #1 or #2 in their respective industries.  If not, they would be sold.  If you were ranked number 6, you had a problem. 

If you are ranked number 6, you have to look at your unit from another perspective. Simply reducing costs and cutting jobs and expenses will not grow the business from #6 to #2. You need new relationships with your staff and management, customers, vendors as well as the media.  You need innovation to create new products and services. Ultimately, as the unit leader, you need to create problems for your people to solve. 

If you look at any extraordinary accomplishment, you find that it always followed a problem.  However, creating problems is counterintuitive.  We are taught to solve them, get rid of them or find out who created it and get rid of them. 

To create problems on purpose requires some training as well as a new mindset.  So, I have 4 do’s to support leadership’s commitment to use problem creation strategies:

1.      Constantly develop yourself.  Books are great.  However, quantum leaps require you to get out of your comfort zone.  It is much easier to do that if you see yourself as a high performing athlete who wants to significantly improve his or her performance.  Therefore, I suggest you hire a coach or an advisor.

2.      Develop an intimate understanding of your customers. Understand what their development needs are and what they anticipate in the future.  Oftentimes, customers need things they don’t know how to describe.  That’s an opportunity to create something that has not existed, and your problem lies therein.

3.       Delegate!  If you try to do it all yourself, the growth of your company will be limited to what you can do.  You can’t do everything.  Besides, if you are doing everything, you are an employee, instead of the President of the company.  As you delegate, you create a learning organization.  Your people will learn new skills and competencies.  More importantly, it frees you up to learn new skills and competencies.   

4.      Always create new products, services and productivity processes.  If you are not doing it, your competitors will.  And then it is difficult to make up for lost momentum.  As a side note, when disruptive technology is created, someone from outside the industry usually creates it.  They look at your industry from another perspective.  This is why it is important to develop yourself and constantly pull yourself out of your comfort zone. 

Creating problems intentionally gives you a much better chance to be the master of your destiny.  Additionally, when unexpected problems arise, you will have skills that empower you to handle them much more effectively.

What do you think?

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