Leadership Vs. Management

Do You Recognize the Difference? 

by Richard Avdoian

Business owners and executives tend to view management and leadership as one and the same when they are actually very different.

To actually be an effective, successful business owner, you need to acquire both management and leadership skills. Knowing and demonstrating the difference between them is key to being respected by your employees, clients and vendors.

As the business owner, you manage your finances and you lead your workforce. Those who know and demonstrate the difference are in the best position to motivate, coach and inspire their employees and grow their business.

Here are a few causes that contribute to the confusion between managing and leading in a corporation, business and association.  

The most common mistake is to applaud and recognize key productive, engaged, motivated employees or those who have been with the company for an extended period of time with a promotion to a managerial position and then later find them to be inadequate leaders as well as less happy and engaged.

In other cases it may be the employee with the highest sales record, fewer days absent, or fewer accidents or customer complaints who is rewarded with promotion.

To effectively manage is to routinely monitor, identify, evaluate and make positive changes to effectively improve policies and procedures and to explain and train employees to adapt to the changes with the least amount of resistance and disruption while maintaining extraordinary customer service.

Leadership, unlike management, is about leading people rather than dealing with policies and procedures.

The following four basic aspects of an effective leader establish the foundation for creating a solid, engaged and productive workforce, which will help increase productivity and profitability:

1. Recruitment. Be the company that is hunted because of your reputation of investing in your employees. Employee turnover is not only time-consuming but also extremely costly. Attracting and retaining the best employees is essential if a company desires to grow and stay competitive. Employees want to have involved bosses who are available when needed for guidance but otherwise be left alone to do their jobs.

2. “We” culture. Creating and maintaining a working environment that rewards employees who take risks, strive to enhance their skills, and appreciate the contributions of all employees from the maintenance personnel to the clerical/tech staff to the CEO can only lead to a desired great place to work. Happy, appreciated employees will openly serve as ideal ambassadors who brag about the company throughout the community, which can ultimately result in attracting the best prospective employees and new customers.

3. Coaching. Invest the time and energy to really know your employees’ interests and abilities and establish routine meetings to motivate and mentor them. Tapping into their total person and offering positive feedback and constructive criticism will enhance skills and could identify potential future leaders. Every employee is different and requires a different approach to stay engaged, motivated and hungry to improve.

4. Training. Investing in training for all employees is imperative to the success of a company and an ideal opportunity for leaders to share their vision, knowledge and expertise. Allocating the funds yearly for ongoing employee and leadership development training demonstrates the leaders’ interest in the personal growth of their employees and the growth and profitability of the company. Win-win.

Leaders who learn and embrace these foundational skills and strive to enhance their ability will continue to attract, recruit and retain the best employees and not be saddled with marginal lackluster employees.

Richard Avdoian is founder and CEO of the Midwest Business Institute Inc., a business consulting and training firm.  For information about training and seminars, contact Richard at 618-972-8588 or Richard@RichardAvdoian.com.