What’s the difference between managing and leading when you’re the owner of a small business? And is there a “right” percentage of time you should spend in each?
People sometimes equate managing and leading as the same thing. While there’s overlap, there are distinct differences between the behaviors and their effects on an organization.
Managing involves things like budgets, expense control, hiring and firing, and maintaining people and equipment needs. Leading is thinking about the future and what needs to be done to get to where you want to be, setting vision, articulating it to everyone, and monitoring external factors like competition and economic conditions.
Managing requires a focus on the day-to-day activities. It’s about running the operations ensuring accuracy and efficiency. Leading is about preparing the ground for the future you’re trying to create. This means you’re spending more time thinking about new products you’d like to launch, geographical areas you’d like to expand into, preparing people for new roles, changes necessary to enhance your culture, and ways to increase retention of your high performers. You want your mind and the minds of your leaders to focus on optimizing the business instead of simply managing it.
Both managing and leading are essential when running a small business. One is not better than the other. Someone said “The main difference between managing and leading is that managers have people who work for them and leaders have people who follow them.” While we agree, we think a more profound, practical difference is whether you want to maintain your company or grow it.
Managing and Leading—the difference between growth and stability
Only doing management activities results in maintaining the status quo and only doing leadership activities can result in errors, missed deadlines, and inadequate staffing. Both skill sets are critical but the trick is to understand the interplay between them and know when the situation calls for one or the other. At any moment of the day you could be engaged in one or the other. In one moment you’re explaining how to follow a work process (management) and the in the next you’re explaining how the work process is critical to the achievement of the organization’s vision (leadership). And that’s as it should be.
If you’re the owner, chances are you’re already doing both. When you first started your company you spent more time in the management side. In running a company there will always be a need to occasionally get in the weeds, whether it’s helping to solve a complicated problem, resolving a conflict, or making a sale. But only occasionally. Leave this to your supervisors.
Knowing the difference and being aware of when you’re shifting from one to the other is the way to maximize your effectiveness as the leader of the company. To help you see where you’re spending your time between managing and leading, we developed the Management and Leadership Activities chart. Try estimating the percentage of time you spend in each area.
What’s the right mix of managing and leading?
As a general guideline, for the health of your company, aim to spend at least 50% of your time in a leadership capacity. However, the right mix of managing and leading for YOU depends on several factors. One could be your company’s size. When your company’s smaller, you’re more likely to do more managing. Over time you must begin to delegate more management functions and move yourself into mostly leadership functions. Another factor effecting how much time you spend managing and how much you spend leading is your company’s goals. If you have goals for strong growth, this will require you to spend a majority of your time in a leadership capacity. Strength of your current managers and employees can dictate whether you need to spend more time managing or leading. If you have a strong leadership team, you can be spending most of your time leading. Your personal goals—whether you want to do other things or whether you like running the company—also have an impact on the percentage of managing and leading you do.
To be great at leading your company you need to be great at managing, great at leading, and have the knowledge and self-awareness to know when to do each.
Brian Kemple, Business Coach
With 30 years of experience across all areas of business in the Automotive, Industrial, and Life Sciences, Brian has led his clients through a multitude of challenges and opportunities in organizational turnarounds, downsizing and combining organizations, as well as the construction of new facilities. To book a complimentary business analysis, go here , or email Brian@InspireResults.com.