Why SME owners need to be more focused on management not leadership

By: Guest contributor

Date: 23 March 2015

Why SME owners need to be more focused on management not leadership {{}}Steve Jobs and Bill Gates. These are the people that many business owners aspire to, leaders with incredible vision who have built empires through their powerful leadership.

But while Steve Jobs was envisioning the iPhone, Steve Wozniak was building Apple. While Bill Gates imagined a PC on every desk, Paul Allen was building Microsoft. Next to these monolith leaders was an equally monolith manager – and that's really important.

Leadership and management are NOT in competition. One is not better or more important than the other. Each has its own required functions and activities and both are essential for success.

In fact, if you have leadership in an organisation with ineffective management, it could be much more disastrous than the other way round.

As the business owner, many of us must wear the hats of both the leader and the manager. Therefore, it is critical to make a distinction between your roles, and be aware of what you're doing and how you're doing it.

Here are three essentials in every business and how the roles of leader and manager differ for each:

  1. Deciding WHAT needs to be done.
  2. Creating NETWORKS OF PEOPLE who can accomplish this.
  3. Ensuring these people ACTUALLY DO their job.

In these three essentials, as a leader and manager, you will play very different – but equally critical – roles. Let's look at each in turn:

1 Deciding WHAT needs to be done

Leader – sets the direction of the business and develops the vision of the future.

Manager – sets targets, creates plans and allocates resources to achieve that future.

2 Creating NETWORKS OF PEOPLE who can accomplish this

Leader – aligns people and communicates the direction to the key personnel who create leverage and move the vision forward.

Manager – creates the organisational structure, including a set of roles that will be required to achieve the goals.

3 Ensuring people ACTUALLY DO their job

Leader – motivates and inspires people by tapping into emotions to get them moving in the right direction and get them excited about getting there.

Manager – controls problems and systemises the solutions, as well as monitoring the plan in detail and identifying, and correcting, any deviations.

Leadership is overrated in SMEs

In an SME, the management side of things is actually the more critical part of running the business. Most large corporates are over-managed and under-led. Managers will sit at various levels of the company, monitoring people. There is usually no one relaying the purpose, re-energizing the motivations and inspiring the employees to align with the company culture.

Most SMEs, however, are undermanaged and over-led. SME business owners are inspired, excited entrepreneurs who overflow with passion and charisma. The leadership comes naturally – people are automatically inspired. If you, as a leader, are undermanaging your employees, you could end up with a team who are really excited to be working with you, but who are simply unable to deliver. That's because they need systems to deliver. And the manager builds the systems: so you need to be the manager.

SME leaders need to become more focused on management, not leadership, if they want to start seeing the visions they have for their business become a reality.

Copyright © 2015 Shweta Jhajharia, principal coach and founder of The London Coaching Group, which you can follow on Twitter.

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