The difference between leaders and managers is not essentially in their method but their mindset; neither is it about their action but their motivation. While leaders seek to explore, managers are content with exploiting.
Leaders explore, trying to discover new areas of opportunities for the organization while managers exploit, striving to bring out the best from what is already available. But as good as it is to exploit, no company can be really great if all it does is merely making the most of what is already available because every exploited area gets depleted at a point or the other. No organization enjoys monopoly in an area for long. It is for this reason that leaders explore, seeking to improve the lot of their organizations by discovering new areas of opportunities. Leaders are always on the go, looking for uncharted areas which they can convert to advantage because they know that the future is in the yet to be discovered areas. Those who concentrate on the current cash cows without looking for new green-fields will end up broke, broken or dead.
From Durant to Sloan
Under the headship of William C. Durant, its founder, General Motors floundered. It was at best a struggling company. Two years after its establishment, Durant lost control of the company to a bankers’ trust as a consequence of a huge debt profile and poor sales. He was able to regain control of the company in 1915 only to lose it again in 1918 following the collapse of the new vehicle market and the company’s humongous debts. But shortly after Alfred Sloan took over the headship of the company, the trend changed.
Sloan transformed General Motors from a stressed company into the largest business corporation in the world. What was the difference? Durant, though an inventor, was a mere manager who could not see beyond the immediate opportunities. This is why the company was plunged into debt as a consequence of a slump in car sales.
To take the company out of perpetual indebtedness, Sloan, who was a leader, looked beyond the obvious opportunities. He understood the innate yearning in everyone to feel successful, so he deliberately developed new brands of cars to massage the ego of his customers; he built cars to meet diverse needs. He introduced Pontiac, La Salle, Chevrolet and a lot more. The move ensured an inflow of revenue from various avenues. He also improved on the designs; he made the vehicles more sophisticated, colourful, and better equipped compared to their competition. That attracted increased patronage. With that, irrespective of the state of the economy, sales were guaranteed and liquidity was assured. With regular and guaranteed inflow of revenue, he was able to put in place proper structure which ensured the company operated at the zenith of its industry.
Between managers and leaders
Leaders and managers operate at different levels. Here are comparisons.
Status quo Vs change
Managers are guided by the status quo. They are also constrained by the status quo because they never try to go against the established order. Consequently, they can only do the known. They cannot experience what has not been experienced because they do not dare to try what has not been tried. The result achievable by a manager is predictable because his actions are also predictable. As espoused in First, Break All the Rules by Marcus Buckingham and Curt Coffman, the secret of achieving the unimaginable lies in refusing to be constrained by common wisdom and doing the unimaginable. That is what leaders do and that is why they are change agents. They do not allow conventional wisdom to tether them. They go for change. They make their own rules; hence they are able to set new records.
The secret of Richard Branson’s success as a businessman is that he repeatedly breaks laid down rules. According to him, “Breaking the rules and challenging convention is in the DNA of every successful entrepreneur. Doing things differently and solving problems with new, innovative and fresh approaches are the very reason many start-ups are able to compete and sometimes outpace the established market leaders.” He adds, “I have always enjoyed breaking the rules, whether they were school rules or more general rules such as the idea that no 17-year-old can edit a national magazine.” As a result, he has become a global business icon who runs over 200 businesses.
Playing safe Vs taking risks
Because managers love to maintain status quo, they are averse to taking risks. They do not want to rock the boat, so they stay in their comfort zone and refrain from trying anything that may jeopardize the situation of the company. That is why while many managers run successful organizations, they never accomplish anything extraordinary.
Leaders take risks because they know that growth would be impossible without taking risks, and without growth, death is imminent. So, they will rather take steps that will give them a chance to stay afloat than do nothing and risk running aground.
When Tony Elumelu resigned his appointment in 1997 to pick up the pieces of Crystal Bank Limited, which he renamed Standard Trust Bank (STB), he was not unaware of the risk he was undertaking. But his hope outweighed his fears. He knew that if he was able to do what he planned to do with the ailing bank, he would be writing his name in gold. So, he went for it. He brought service innovation to the bank. Bank customers who were hungry for innovation lapped it up. Thus, Elumelu and his team injected life into the dying bank and turned it into one of the top-five banks.
But Elumelu was not done with risk taking. In 2005, he led what was at that time the largest acquisition in the banking sector in Sub-Saharan Africa to take over the United Bank for Africa (UBA). He was also able to grow that bank into a pan-African financial institution with operations in 19 countries.
Elumelu is the chairman of Heirs Holdings and the founder of the Tony Elumelu Foundation, dedicated to the promotion of entrepreneurship and business excellence in Africa. Today, Elumelu is recognized and honoured as an African business leader but the root is in the risk he took when he staked his career and reputation as a banker to attempt the revival of the ailing CBL. If he had not taken that risk he probably would have retired as an inconsequential bank General Manager.
Task-oriented Vs relationship-oriented
Managers are particular about what has to be done. Their focus is the job at hand and they stop at nothing to ensure that the job gets done. Therefore, they are task-oriented. Managers are not as bothered about the people that perform the task as they are about the task itself. At the heart of this disposition is self-preservation. The manager knows that for as long as he delivers on the agreed terms, his job is secure. So, he drives his people to get the desired result.
On the other hand, a leader is relationship-oriented. While he wants to get result, he does not want it at the expense of the people. So, he is more interested in the people than the task at hand. Consequently, he places priority on the comfort and well-being of the people more than the job they do. He supports, encourages and empowers them. Rather than handing down instructions on how to do the job, he allows them to make their input. He does not treat them as tools to be deployed in accomplishing the task, rather he gives them a sense of ownership that enables them go beyond the call of duty in performing their tasks.
As a result, a leader does not only win the hands of his team members, he also wins their hearts. They get so committed to him that they stop at nothing to ensure his success.
Orthodox Vs innovativeness
The managers’ axiom is if it does not break, don’t fix it. So, they have no qualms pushing out the same stuff year after year. That usually works until someone introduces something different that wows the market. Managers are comfortable with the common; they are at home with the usual. So, they are not always eager to change the familiar until they are forced to do so, and oftentimes that is usually too late.
But leaders know that the conventional is not sustainable because the market is always yearning for new things and it is the organization that is quick to introduce new things that gets an edge over others. So, they travel to the future to get solutions to problems that have not arisen. They innovate and introduce new things. They always strive to think ahead of market needs and make these available before the market is conscious of such needs. As a result, they set the pace for others. That is why they are leaders.
Short term Vs long term
Managers’ focus is short term. They are interested in quarterly results rather than what happens in the long run. Managers are short-term focused because they think about themselves. They want results that will validate them and entrench their reign. On the other hand, leaders focus on the long term. All their actions are long-term based because they are more interested in the wellbeing of the organization than they are in their own reputation. They will willingly sacrifice personal glory for the eventual success of the organization.
Development has been difficult in Nigeria because the political space is filled with politicians rather than statesmen. As observed by James Freeman Clarke, while a politician (manager) thinks about the next election (short term), a statesman (leader) thinks about the next generation (long term). Nigerian politicians live for the moment; everything they do must bring instant result which can be used for campaign at the next election. As a result, they steer clear of investments that will result in the type of development required by the country. This has not only slowed down the country, it has malformed it from ‘the giant of Africa’ to one of the continent’s minions.
When Anne Mulcahy was appointed the chief executive officer of Xerox in 2001, the company was reeling in over $17 billion debt and had recorded losses in each of the six preceding years, all of which made the company a candidate for Chapter II bankruptcy. Some of her advisers counseled that she should file for bankruptcy to ease the burden on the company. But knowing the effect of this on the future of the company, she decided to pay off the debt rather than file for bankruptcy. She and her team devised means to generate funds to improve the liquidity of the company and embarked on a massive reorganization of the company. They got out of areas which were not generating revenue and concentrated wholly on revenue-generating activities. She also warded off pressure from the Wall Street to concentrate on quarterly results and instead paid attention to improving the company in the long run. The strategy worked. By 2003, Xerox, which recorded a loss of $273 million in 2000, posted a profit of $91 million. This rose to $859 million in 2004. That was the trend until Mulcahy retired in 2009.
Can a manager become a leader?
While some people are wired with leadership attributes, everyone can actually learn to become a leader. So, managers can become leaders. The starting point is the mind. The point had been made earlier that the difference between a leader and a manager is the mindset. So, to transform into a leader, a manager has to change his thinking about himself, his role, his organization and his people. Managers are focused more on themselves than others, hence they exploit rather than explore. That is why they are more interested in the task than in the people, and they think short term rather than long term. So, a manager must first unlearn everything that makes him a manager so that he can learn to become a leader. Once the thinking changes, the attitude will also change and the changed attitude will result in changed outcomes.
When a manager decides to think beyond himself, he kicks off his leadership journey.
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