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Choosing the right management style is more important than ever in today's competitive business environment. Traditional management techniques which may have worked in the past are simply less effective in today’s business environment. On the positive side, choosing to have a leadership centered business can have positive benefits for your workforce and your organization.
Leadership does not mean that you as the business owner are always in charge. In fact, effective leadership requires stepping back and allowing others within your organization to lead. Each of your employees have strengths and weaknesses key to the success of your business. Allowing them to step up and lead at different times empowers your employees and produces better results.
Management vs. Leadership
You've probably used the words management and leadership interchangeably in the past. However, these two styles of running a company are different in many key ways:
1. Authority or Charisma – Both managers and leaders share the same objective: to accomplish goals within the company through employee efforts. How they motivate those employees to do their part is different. Managers rely on their authority and directing employees to their will. They have been given power; therefore, people are expected to do what they say. Leaders rely on their charisma and personality to win the trust and loyalty of the employees who are willing follow his or her lead. This also requires encouraging employees to take part in the decision process guiding them through rather than telling them how it should be.
2. Task or People – Managers think in terms of results. They deal with deadlines and budget constraints in order to accomplish specific tasks. Leaders, on the other hand, focus on people. They are excellent at getting others to see their vision and to come on board. Leaders bring out the best in their employees allowing them to demonstrate their skills and abilities.
3. No Risk or Risk – Managers work hard to keep their ship on an even keel. They don't want to do anything which might jeopardize that content balance, even if it means sticking to the status quo. Leaders are averse to the idea of the status quo. They thrive on taking risks and breaking rules if it means potentially generating phenomenal results. The old saying in business is “If you are not growing…you are dying” and a leader recognizes this fact.
4. Blaming or Taking Responsibility – Another key difference is how managers and leaders react when things go wrong. A manager looks for who to blame among his subordinates. A leader takes responsibility for what went wrong as the ultimate decision maker. As a result, employees will be more loyal and have more respect for a leader-centered supervisor.
As you can see, there are differences between these two styles. However, one style is more effective in today's business world.
Benefits of Leadership-Centered Management
Choosing a leadership-centered approach to running your business does come with a number of benefits. For example, leaders are more likely to come up with unique and innovative ideas and solutions. Because managers tend to stick to the rule book in business and steer clear of risk-taking, their ideas usually err on the side of caution. While that may work in some situations, today's market is too competitive and fast-paced to rely on the old-reliable ideas.
Leadership-centered management is also more likely to elicit feedback from employees, and you might be surprised by how many good ideas they can come up with when given the chance. This is the center piece in today’s Lean Enterprise teachings. Underutilized employees is becoming the most focused on of the “eight wastes” of lean. And with good reason too…employees are demonstrating ways to reduce efficiency that managers would never see from their corner offices.
Another benefit is that in order to be a leader you can’t be an authoritarian. Authoritarians, like most managers, rule like kings who make rules without consulting those who will be affected by the rules. In those top-down management situations, employees are kept in the dark and are given very little say-so in any part of the process. Because leaders rule through the strength of their team and their own charisma, they can be open to outside feedback and can afford to relinquish some of their decision-making power to employees. By empowering employees in this way, you'll be boosting their morale which, in turn, increases their productivity and decreases turnover.
Flat Organizational Structure
By using a leadership-centered operating technique the organizational structure will become flat. This has its own benefits…a flat organizational structure basically means that instead of having tiers of managers with their own subordinate managers, nearly everyone is at an equal level with only one or two supervisors guiding the leadership process. Because the employees are empowered to make decisions, all of those extra layers of middle managers are no longer necessary. As you might expect, saving money is one very large benefit of this type of structure.
Of course, saving money is only part of the benefits. This type of structure offers a nice balance between the control and flexibility you need to run effectively and efficiently. Leaders inspire their emplyees to do their work well and to stick to their tasks, yet the leaders and employees can make decisions quickly which gives them more flexibility.
For example, if a customer comes in with a complaint, then your employee can decide how best to deal with that complaint rather than making the customer wait, tying up the managers time and slowing productivity. The employee doesn't have to consult with a manager before correcting the problem and satisfying the customer.
Skills of a Leader
For leadership-centered management to work, you're going to need strong leadership skills. The question then is; what are these skills?
The leaders should be experienced in your industry. Leaders who have knowledge of your field will be better able to brainstorm effective and creative ideas which work for the business. Knowledgeable leaders garner the respect of other employees creating “buy-in”, which facilitates teamwork and reduces unproductive disagreements. Just having leadership experience is not enough.
Leaders need to be excellent strategist as well. Since a big part of what your leaders do is plan the course of your operations, they need to understand how to come up with effective strategies, including being able to come up with specific ways to boost productivity, increase customer satisfaction, and generate more business.
Additionally, leaders should have strong interpersonal skills. They need to be excellent communicators since the quality of their work depends on how well they communicate their ideas to others. A leader should exude confidence – leaders who doubt themselves cannot inspire trust and loyalty in others.
Summary
A leadership-centered management approach has many benefits over the more traditional top-down management style, including more flexibility and more empowered employees. Keeping your use of managers to a minimum will not only save you money but will make your company more open new ideas. Just remember to pick leaders with experience in your industry who can also demonstrate exceptional interpersonal abilities.
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