Are you creating an over managed and under led organisation?

I get asked many times about the differences between management and leadership. I always start the answer with the implications of an over managed organisation and then link that to the individual and then explain my view of the differences.

Here's how it all starts with a crisis of being over managed and under led....

Stage 1: Some combination of visionary entrepreneurship and/or luck creates and implements a successful business strategy.

Stage 2: A fairly dominant position (and thus lack of strong competition) is established in some market or markets – usually a product or service market, perhaps also financial, labour, or supply markets.

Stage 3: The firm experiences much success in terms of growth and profits.

Problems emerge...

The firm needs, hires and promotes managers, not leaders, to cope with the growing bureaucracy.

Which leads to...

Top managers allowing these people, not leaders, to become executives. Some times top management actively prevents leaders from becoming senior executives.

The pressures on managers come mostly from inside the firm. Building and staffing a bureaucracy that can cope with growth is the biggest challenge. External constituencies are neglected.

Managers begin to believe that they are the best and that their idiosyncratic traditions are superior. They become more and more arrogant. Top management does nothing to stop this trend and often exacerbates it.

This leads to...

A strong and arrogant culture developing.

Managers fail to acknowledge the value of customers and stockholders. They behave in an insular, sometimes political fashion.

Managers fail to acknowledge the value of leadership and the employees at all levels who can provide it. They tend to stifle initiative and innovation. They behave in centralised/bureaucratic ways.

This leads to a major crisis like in the Banking sector, organisations like Kodak, retailers such as Blockbuster, Borders, HMV, Jessops...the list goes on.

In times of change we need leaders not just managers.

Every success

Graham