The subject of Leadership is one of the most widely discussed topics in business. Numerous books have been published, and papers are written to dissect the so-called “winning formula” for leadership in entrepreneurship and business. A quick check on Google search on the topic of “leadership” generated over 3.5 billion results.

Robbins defines leadership as the ability to influence a group towards the achievement of goals. Leadership is also defined as a process (Northhouse, 2007) where influence is used to achieve the goals.

Are individuals required to be a leader to be successful in business? The answer is almost universally, yes. So the real discussion is whether the leader is born or made? As suggested by research done in the past, true leaders are born with naturals instincts to lead. However, more recent studies veer towards the notion that anyone willing to go through the process can also learn to become one. The other question is also about the distinct role of Managers and Leaders. Who is more responsible for the success of the business? Almost always, we see someone promoted to a management position, and we assumed that he or she is capable of leading, only to find out that this is not the case.

Warren Bennis (Bennis, 2009) the utmost expert on the subject, makes the following distinction between Management and Leadership.

Management Leadership
Promoting Change Designing Change
Organising people Inspiring People
Consolidate and Build Innovate and Create
Plan and Budget Strategy and Vision
Effective Action Meaningful Action
How, Who, When Why, What and What if?
Reflect the Status Quo Challenge Status Quo

 

A successful business requires Leaders and Managers. However, we need leaders in order to innovate, keep people inspired and act despite fear continually.

Once a business has sufficient resources, i.e. people and machines, to ensure that all the routine tasks are performed, a manager is hired. However, the firm still requires a leader to lead. The distinction between the two roles in industry is illustrated in the table below.

Manager “Do things Right.” Leader “Do the right things.”
Creates Standard Operating Procedure (SOP) Inspire innovation that improves and innovates the SOP
Hire and Trains people to do the job Takes care of the heart and spirit of the people, so they stay motivated
Sets and implements financial budget Seeks better performance such as Return on Assets
Ensure that customers are satisfied Ensures customers are delighted
Takes care of the bottom line (Operating Profit) Looks at the Top Line (Sales and Revenue)
Work for a salary Work for profit

 

Reference

1. Robbins, S. (1998). Organizational Behavior. New Jersey: Prentice-Hall.

2. Northhouse, P. G. (2007). Leadership: Theory and Practice. Thousand Oaks: SAGE Publications.

3. Bennis, W. G. (2009). On Becoming a Leader. New York: Basic Books.