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Entrepreneurs are known to harbor strong emotional connections to their individual businesses. Understandably - they're the business's founder, the one whose vision, hard work, personal and professional risk created something valuable. The business bears a very personal entrepreneurial stamp, and speaks to the passion, professional experience and competencies of its creator. It's perfectly reasonable, therefore, for entrepreneurs to view the business as their "baby."

Many entrepreneurs reach a point where they're satisfied with the size, value and output of their company, and want to keep managing their business on that scale. However, for those who aspire to take their businesses into unknown territory - to achieve greater returns, higher growth, or product expansion - it is true leadership that is required, not simply management.

The Difference Between Leadership and Management

One of my favorite ways to characterize the difference between management and leadership comes from Stephen Covey's book The 7 Habits of Highly Effective People: "Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall." In other words, managers are concerned with the day-to-day operations of the company while the leaders are always thinking about the future.

While it's probably impossible to completely separate the two, it can be helpful to think about them as different skill sets. While all leaders undoubtedly employ management type skills from time to time, it should be the goal of all CEO's with growth in mind to minimize the amount of managing they do so that they can spend more time leading.

If You only Manage, You May Not Grow.

In The Wall Street Journal Guide to Management, Alan Murray likens the skills associated with management to those employed by a foreman in an industrial era factory. The foreman doesn't need to worry about what he's producing or who is producing it. His job is to organize the work, assign the right people to the necessary tasks, coordinate the results, and ensure the job gets done as ordered. His focus is on efficiency.

These skills are incredibly valuable in any organization. Sometimes, jobs just need to get done, so its very important to have people around who are capable of focusing on efficiency in this way. But efficiency isn't everything.

In order to see this, think about the factory as one big business tool. It is something put to use by a company in order to achieve a specific goal or complete a specific task. While it is no doubt more complicated than simpler business tools like a calculator or a ball point pen, the principle is the same. A factory is a highly organized piece of technology focused on producing one specialized product as efficiently as possible. While there are tweaks that can be made to its internal organization to make it better achieve its function, its still only going to produce the same thing over and over again.

If you run your whole business like a factory, then you are running the whole thing like a specialized tool rather than using that tool to do new and innovative things. In other words, if you only manage your business, then it will never grow, change, or reach a new level of success.

What Is The Essence of This True Leadership?

What holds many entrepreneurs back from achieving new levels of success? One of the great failures of CEO entrepreneurs is when they want to take their company in a new direction, they many not realize that doing so means stepping away from functional operations. And for those who do realize what is required, they have a difficult time implementing the necessary change.

Success can be tied to the ability of an entrepreneur to hand the responsibility and control of the business's key functions over to other members of their team. This takes courage and conviction, and it is absolutely necessary in order for CEOs to channel their energies from day-to-day management to development and implementation of a strategic growth plan.

Prepare To Share Your Passion

One of the reasons that sharing responsibility is so difficult is that entrepreneurs often do not realize that others within their organization may share their passion for the company's success. Entrepreneurs go through a lot getting their business off the ground - much of which is invisible to the people around them. In an interesting article on, Toby Thomas, CEO of EnSite Solutions likens this phenomenon to a man riding a lion: "People look at him and think, This guy's really got it together! He's brave!" says Thomas. "And the man riding the lion is thinking, How the hell did I get on a lion, and how do I keep from getting eaten?"

As a result of having faced incredible adversity and having navigated incredible personal risk in order to get where they are, entrepreneurs often believe they hold the emotional rights to the company. They see it as their "baby" - something special that nobody else could possibly feel attached and responsible in the personal way that they do. This is a mistake.

There are a great many managers who derive tremendous satisfaction in their ability to achieve measurable targets and to excel in their respective roles, whether in marketing, sales, or operations.

There are also a great many managers who are happy simply being stakeholders in a business, who enjoy working for someone else, whose values align with those of the organization, and who have no greater career aspirations.

The CEO who is able to instill a sense of passion throughout their organization can more easily hand the functional responsibilities of the business over to others.

Companies need to offer employees the opportunity for both professional and personal growth that comes with additional responsibility. When employees feel valued, trusted, and respected, emotional connections and positive momentum are created within the business. Everyone can start to feel proud of their mutual successes, not just the business's founder.

Ultimately, entrepreneurs become leaders when they successfully take their business in a new and upward direction. They have given a business its roots, but success is derived when they have also given a business its wings.


Larry Hart

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