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Thursday, April 17, 2014



Listen to how most people talk in everyday conversation, and you'll find that they often use the words "management" and "leadership" interchangeably. If they do make a distinction in meaning, it is usually in reference to levels in a hierarchy. People at the very top provide "leadership"—whatever that is—or at least they are supposed to. People in the middle do the "management," again with little clarity about what that means. This way of thinking is inaccurate and increasingly troublesome.
Management is a set of well-known processes that help organizations produce reliable, efficient, and predictable results. Really good management helps us do well what we more or less know how to do regardless of the size, complexity, or geographic reach of an enterprise. These processes include planning, budgeting, structuring jobs, staffing jobs, giving people time-tested policies and procedures to guide their actions, measuring their results, and problem solving when results do not fit the plan.
Management as we know it today is almost entirely a later-twentieth-century invention. Although it has roots that go back centuries (as in running the Roman Empire), what we see today is a very modern phenomenon. Management now requires great skill. And both what it is and what it can achieve would have been difficult for even a well-educated person in the year 1900 to fully grasp. Our sophisticated modern-day management processes did not exist in or prior to the nineteenth century because they simply weren't needed. After the Civil War in the United States, for example, there were only a few hundred organizations with over a hundred employees. 
Today the number of US organizations with over a hundred employees is well over a hundred thousand. In the year 1900, the number of firms that did business around the world, on all continents, was very close to zero. Today the number is so large it is hard to calculate. Without competent management, the organizations that we have created in the last century, and that we continue to create today, could not function. Without management, chaos would reign. Enterprises would fall apart and go out of business quickly. Management is an incredibly important invention, yet the average person-even the average manager-has no real appreciation of what a marvel it is.
But management is not leadership.
Leadership is about setting a direction. It's about creating a vision, empowering and inspiring people to want to achieve the vision, and enabling them to do so with energy and speed through an effective strategy. In its most basic sense, leadership is about mobilizing a group of people to jump into a better future.
In many people's minds, great leadership tends to be associated with grand, larger-than-life figures- Abraham Lincoln, Queen Victoria-who mobilize their countrymen to take on some great cause and succeed beyond imagination. It is easy to think that such imposing and rare figures shape history through the power of their leadership, and only their leadership. But that was never the whole story, and we know for sure that this is most certainly not the way life works now.
Today you can find all sorts of people in all sorts of situations helping to provide at least some degree of leadership. A project engineer might take some initiative. Because of his or her leadership, a small group of people is mobilized to find and execute something new, creating results which others in the organization would have thought nearly impossible. You can find leadership coming from people who are officially called middle managers. And, conversely, you can sometimes find very little leadership in the actions of those near the top of a hierarchy.
More than anything, both today and throughout history, leadership has been associated with change. It's not about mobilizing a group to act the same way they have always acted. It has to do with changing people and their organizations so they can leap into a different and better future, no matter the threats or barriers or shifting circumstances.
In businesses today, leadership is the central force mobilizing people to create something that did not previously exist. That is, leadership creates an enterprise in the first place. And leadership takes existing enterprises and finds new opportunities, makes changes to capitalize on those opportunities, and moves firms into a future where they can grow and prosper.
Without sufficient leadership in a rapidly changing world, organizations become static and eventually fail. And by sufficient leadership, in organizations of any size, I do not mean a grand CEO or executive committee. There is no way that a single figure or a small team at the top of the hierarchy can provide all the leadership that is needed. A superman or -woman-even one supervising an exceptional group of managers, who in turn supervise highly talented individual contributors- can no longer do the job.
So which is more important? Management or leadership? To begin to answer that question, we need to look again at what role each plays. Management ensures the stability and efficiency necessary to run today's enterprise reliably. Leadership creates needed change to take advantage of new opportunities, to avoid serious threats, and to create and execute new strategies. The point is that management and leadership are very different, and when organizations are of any size and exist in environments which are volatile, both are essential to helping them win.
This takes us to possibly the most fundamental problem that organizations of all sorts are now facing. Any successful organization older than ten years and with more than thirty employees tends to have many people attending to the managerial chores and doing so at least adequately. It has to do so unless it has no short-term performance demands placed on it. Otherwise it can die, and rather quickly. But in most cases-especially when we are talking about more mature and larger organizations-sufficient leadership just isn't there. There is a substantial volume of research that draws this conclusion, and there is no credible research that I know of that supports the opposite conclusion.
As long as the world is not changing much, the competition is not too fierce, and the strategic challenges are limited, you can survive with this reality. Performance measures may look very good. But: A world that is not very turbulent? A context in which competition for customers or budgets is not very fierce? This world is fast disappearing on us.

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