Why More Entrepreneurs Succeed By Leading, Not Managing

Here’s to making this the year you exceed all your small business aspirations.

We are here to help with smart working capital solutions and straightforward advice.

Now for some insights on leadership – including ways to determine whether you’re truly leading or just managing. The first few weeks of the year are the perfect time to set goals and intentions for the year while sizing up your big-picture strategy. For entrepreneurs and small businesses, building a solid strategy early on is key because the flood of day-to-day details competing for your attention will only get stronger as the year progresses.

Whether your team includes two or two hundred, practicing actual leadership (versus management) can lead to big gains in 2017, including more streamlined growth and employees that are more engaged.

Put the “I” in Influence, Input, and Inspiration

“Leaders influence. Managers direct.” explained executive onboarding consultant George Bradt in a piece for Forbes. “Both use different forms of influence and direction at different times. But leaders have a bias to influencing by inspiring and enabling through advice and counsel while managers have a bias to command and control.”

Former Coca-Cola CEO Doug Ivester was crystal clear on the difference, Bradt recalls. “Sometimes he’d come to us and say, ‘this is your decision to make. I’d like to give you my thoughts as input.’ Other times he’d say, ‘See these stripes. I am the CEO of this company. I’m going to give you some direction, which you will follow.’”

Bradt’s key takeaway is that the most important thing for any two people to understand as they are working together is which of them is going to make which decisions so they know when they should be deciding and when they should be providing input into the others’ decision. In other words, “clarify who makes the decision and who is providing input to the person making the decision.”

Are You a Leader or Just Bossy?

While bosses focus on themselves, leaders look for ways they can help and encourage those around them
Entrepreneur Magazine explains (with the help of a quick and fun animated video). Laying out some of the negatives of being a boss vs. a leader, Entrepreneur argues “a leader understands that the people he or she works with are essential to an organization’s success, treating them as equals and providing them with helpful direction. Bosses, on the other hand, give out orders and view employees as disposable inferiors.”

The Harvard Business Review takes a more nuanced look at the question with the help of three tests you can use to decide if you’ve made the shift from managing people to leading them. How do you stack up?

  1. Counting value vs. Creating value. You’re probably counting value, not adding it, if you’re managing people. By contrast, leaders focus on creating value, saying: “I’d like you to handle A while I deal with B.” He or she generates value over and above that which the team creates, and is as much a value-creator as his or her followers. Leading by example and leading by enabling people are the hallmarks of action-based leadership.
  2. Circles of influence vs. Circles of power. Just as managers have subordinates and leaders have followers, managers create circles of power while leaders create circles of influence. The quickest way to figure out which of the two you’re doing is to count the number of people outside your reporting hierarchy who come to you for advice. The more that do, the more likely it is that you are perceived to be a leader.
  3. Leading people vs. Managing work. Management consists of controlling a group or a set of entities to accomplish a goal. Leadership refers to an individual’s ability to influence, motivate, and enable others to contribute toward organizational success. Influence and inspiration separate leaders from managers, not power and control.

With the right growth capital partner, your inspired leadership can enable the full entrepreneurial potential of your company. And even if you’ve done more managing than leading in the past; make today the perfect time to grow. Contact Blacksail Capital Partners today if you or your clients need working capital solutions that leverage small business leaders in ways banks and other lenders can’t.

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