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Realizing the difference between leadership and management will reinvent your business

Sooner or later, every business, if it is to grow and become profitable, must come to the realization that the leadership and management have two different functions. The time in the life of a business when this realization moment occurs will vary from company to company. The best time to start the re-inventing process is when several employees join the organization.

Before we look at the re-invention process, let’s define the job functions of leadership and management.  When a business is started, the founder is the leader. He brings forth a vision and a strategy to make it a reality. As a leader he also has the responsibility of working with people within the organization. The vision and strategy that are brought forth have to have work clothes put on them and that work is the responsibility of the management team, no matter the size.

Another way of saying that is “leadership inspires and management makes it happen.” The leader must create an environment, a culture so to speak, that motivates and empowers others to do more than they ever thought was possible. The individuals that make up the company must realize that they all have to work together for their survival and growth.

Getting to this point in a company structure requires leadership to share knowledge and know-how through training and ongoing communications.  Everyone has a stake in the company and innovation, creativity and continuous improvement becomes part of the corporate culture. In other words, everyone has a sense of ownership.

The re-inventing process requires some hard decisions; the core values of the company must be adhered to, and there is to be no tolerance for mediocrity.  As a company grows some of the staff may no longer have the capacity or willingness to change; change may have to come by the replacement of some staff.

Leaders must fight the desire to be liked by everyone and also to accept constructive ideas from staff that differ from their own preconceived ideas.

Leaders lead by their passion and their ability to inspire. They can gather a group of employees with different strengths and weaknesses and mold them into a cohesive team.

Efficiency is doing the thing right. Effectiveness is doing the right thing.        Peter Drucker

Nick J. Petra CFP     helping businesses achieve profitability is our goal




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