Leadership vs Management

Leadership and management are abilities that are far too often confused and conflated in mainstream discourse. There are some similarities between the two, but they are in fact very distinct abilities that encompass a different set of skills and qualities. Good or great managers are present in many organizations while good or great leaders are much scarcer. The skills needed to be a great manager can be developed and honed while the skills necessary to be a great leader tend to be more innate and more difficult to learn (although not impossible).
Managers can manage any number of things. They can manage a task, subordinates, projects, transitions, meetings, or even expectations. Leaders lead people. That is the essence of the difference. A great leader must have the ability to inspire and compel followers (subordinates in the case of a company) to act and perform on behalf of something that may or may not serve their own self interest.
Followers of a great leader will execute their duties because they believe in what they are doing. They will carry it out to the best of their abilities because they are inspired by the vision laid out by the leader. Subordinates of managers will carry out their tasks because it is required a part of their occupation. They may or may not have any interest in the completion of the task and its broader significance to the good of the organization. As we all know, people will always do a more competent job when they are doing something they believe in.
Obviously, leadership and management are not mutually exclusive abilities. Great managers can be great leaders and vice versa. A great manager is always results oriented, plans exhaustively and delegates accordingly to maintain a stable and conflict free (to the extent it’s possible) work environment. A leader can do all of these things but might take a different route or use different methods to accomplish these tasks. Great leaders use there charisma to motivate followers to excel while managers draw upon the formal authority bestowed upon them to accomplish objectives.
In a business environment, having great leaders within the structure of your organization is more than just a bonus. Great leaders within the various levels of management in a large organization can serve as a competitive advantage in your industry. Every objective study that has been conducted on the issue finds that employees are more inspired, efficient and ultimately more productive when they are in regular contact with great leadership. On the other hand, uninspiring and lackluster management can cause productivity to wane. This data has compelled many companies to add leadership development programs to their training agenda.
Great leaders are usually charismatic and occasionally transformational. Embodying these characteristics comes naturally to a few but requires study and practice for most. One’s emotional intelligence must be trained and developed in a rigorous manner so the characteristics of leadership will become sincere and not transparently disingenuous. If effective managers can become great leaders, they increase their level of service to the organization and themselves exponentially.

Developing a Business Strategy

The essential questions that every business enterprise must ask itself are this; where do we want to go? How are we going to get there? These are simple questions that don’t necessarily have simple answers. The answers to these questions are vital in the development of a comprehensive business strategy. A company must have a direction and an overriding purpose. In order to establish a clear, sustainable and successful strategy, a company must conduct significant research on the industry in which it operates. It also must make an internal assessment of its own strengths and weaknesses. These two objectives can be achieved by conducting external as well as internal analyses. The external analysis looks at the industry’s environment and how favorable it is to the competing companies. The internal analysis assesses the inner-workings of the firm and the resources and capabilities that contribute to its core competencies.
A common method for assessing an industry’s external environment is to use Michael E Porter’s 5 Forces Model. Porter is a renowned professor at the Harvard Business School and author of many widely accepted strategic business tools. The 5 forces analysis allows for the evaluation of information related to an industry’s rivalry (or competitive intensity), threat of substitutes, threat of new entrants, power of buyers, and bargaining power of suppliers. It will help characterize the competitive environment in the industry and whether or not that environment is favorable or unfavorable to the companies within it. This step is critical in the strategy development process as it allows a company to identify the key success factors within its industry. Once key success factors are identified, a firm can begin to look internally to determine if they have those factors are present in their firm.
Porter’s Value Chain is an effective tool used to identify a firm’s internal activities. Bothe primary and secondary activities are evaluated and examined in an effort to identify the firm’s core competencies. Ideally, a company’s core competencies will correspond with the key success factors identified in the external analysis. If they do not, the firm needs to critically evaluate how it can meet those factors.
Once the analyses are complete, the firm has the information it needs to make a strategic decision about its products/services. Ultimately, there are really just two strategies that a company can pursue when it comes to a specific product or service. They can either try to be the price leader in their industry, or they can pursue a differentiation strategy.
A price leadership strategy might be a wise route when a key success factor is your ability to minimize cost (also known as cost leadership). If this is also a core competency of yours because of superior supply chain management, or maybe a technological edge that your competitors don’t have, than you have achieved what any and every business is after: a sustainable competitive advantage.
Product differentiation might be a better strategy to pursue in industries where customers are looking for something more specialized. In this scenario, the product must be different than the competition and provide value that the others don’t. If a company can deliver a product that is different than the competition and is in demand amongst potential buyers, then that sustainable competitive advantage is theirs.
Developing a comprehensive business strategy is necessary exercise for any company that hopes to succeed in a competitive industry. A company must identify goals, how those goals can be achieved and the specific processes that must be followed. External and internal analyses will lead the way and ultimately allow the company to determine if a sustainable competitive advantage is within its grasp.

The Importance of a Mission Statement

A mission statement is a company’s articulation to its customers, employees and the entire world of the purpose of its existence. Obviously, businesses exist to make money, maximize profits and shareholder value, but the mission statement is more about the front line than the bottom line. That said, in order for a business to be successful, it has to have a clear and broad mission that resonates with the public and tells them why it would be beneficial to do business with your company. The mission statement should represent the company’s vision of how it would like to be seen by its clients.
Mission statements generally include a statement of purpose, a business statement, and an indication of the company’s values. The statement of purpose explicitly states the purpose of the company. For example, a car company’s purpose is to manufacture cars. The business statement describes how they are going to manufacture those cars. The values portion of the statement talks about the common values shared throughout the company and how those common values contribute to the final product.
An ideal mission statement should be inspiring to employees. The statement brings a certain focus to the staff as the purpose of their work crystallizes and they are able to see the value of their contribution. Few things in life are as fulfilling as the knowledge that you are contributing something greater than yourself. The mission statement should allow each employee to see their own personal role in the firm’s success.
Customers will be reassured when they are exposed to the statement as they will be able to see that the company is committed to their purpose. Customers can also sometimes form a connection with the firm if the values outlined are ones they share. People like to work with others that they like and agree with, it’s a natural human instinct.
When you sit down to write your mission statement, there are several things you should keep in mind. First, who are my clients and what are their needs and desires? Second, how do I fulfill those needs and desires? What values does the firm currently have? What values do I want it to have? Are we all working together with a singular purpose or are individuals constantly veering of course?
A mission statement is best written in collaboration. The decision makers in the company should sit down and talk about their thoughts and how they want to represent the company to the public. Ideas should be bandied about, considered and then voted on. Once they thoroughly discuss, write and re-write the statement, they should make sure that it’s something that employees can buy into and customers can appreciate. It should be a statement that stays relevant no matter the difficulties the company may face and can serve as an instrument that rallies the troops to overcome adversity.