Leadership? Management? Neither? “What’s in your Company’s Wallet?”

One of the most interesting elements of being a consultant is observing the differences (and similarities) between how different companies handle a particular challenge. To get this visibility, you don’t always have to work directly with a company – often this visibility comes from networking and business development discussions about “what is working”, and “what is not” with colleagues, or more formal forums like a “Partner Advisory Council (PAC).

One area that I find is challenging for many companies in the tech industry is the dynamic of “Leadership vs. Management”. For both small and large tech companies, leadership and management are required, but the needs vary quite dramatically and I’ve often seen companies that are short one or both of these types of DNA. Table 1 below shows accepted definitions of these terms.

Table 1: Leadership and Management Definitions

lead·er·ship noun \ˈlē-dər-ˌship\ a position as a leader of a group, organization, etc. the time when a person holds the position of leader the power or ability to lead other people

man·age·ment noun \ˈma-nij-mənt the act or skill of controlling and making decisions about a business, department, sports team, etc. the people who make decisions about a business, department, sports team, etc. the act or process of deciding how to use something

Source: The Merriam-Webster Online dictionary .

 

A definition that I find is more useful in the context of tech companies is the following definition from an article in the Business News Daily

“Leadership is inspiring others to pursue your vision within the parameters you set, to the extent that it becomes a shared effort, a shared vision, and a shared success. Steve Zeitchik, CEO of Focal Point Strategies”

The Startup Perspective

From what I have seen in smaller technology companies, there are lot of people with passion and vision who are focused on communicating that vision to others – both inside and outside of the organization. If there are barriers to overcome, they “find a way” to be successful, through a series of iterations of strategy and execution to get to their goal.

What these companies often lack is “management”, since the tendency is toward “raw execution” in a series of (often-uncoordinated) sprints. Do they have the pieces in place to drive channel revenue? Do they have the right alliances? These are often a question for “tomorrow,” since there will not be a tomorrow unless the company gets to their next milestone of proving out their product and acquiring reference customers. When I have seen startups really click is when they temper raw execution the patience and vision of “management” (which is precisely why Venture Capitalists value a great executive team so highly when they are evaluating their investments in start-ups).

At many start-ups the company has a hard time allocating resources to planning or to working on activities that have impact outside the next couple of quarters. For smaller companies, I have found that it is helpful to pull their leadership team out of the fray and have a facilitated executive GTM strategy and planning session to surface some of these opportunities and to put resources into “Leading” and “Managing” this transition effectively.

 

The Larger Company Perspective

The “Leadership Landscape” in larger companies seems to be almost completely different. As I discussed in my recent post, “Does Your Organization Structure Lead to Missed Revenue Opportunities?”, companies get bogged down with the process of allocating resources internally and getting focus from a shared sales team. Over time the focus of employees becomes winning the internal battle, more than in meeting customer needs (a great path to erosion of market share). For larger companies to continue to grow, they have to have a compelling vision for the company’s future (which requires Leadership).

A recent example in the tech industry that speaks to this dynamic is Symantec.  Symantec has strong products in most of the categories where they sell, but were underperforming when they brought in a new CEO, Steve Bennett, in late 2012. Bennett was a former CEO of Intuit and had a strong record and management training at GE. But early in 2014, Bennett was unexpectedly ousted as CEO with comments from board members like “we were not making enough progress on innovation”.  From folks I know who were close to Symantec, Bennett was very focused on the craft of “Managing”, but did not really create a new market vision for the company.  It seems to me this situation is an example of a tech company trying to create success by “Managing”, rather than innovating and leading. In today’s tech landscape companies must do both…

In many large companies, the resources are there, but they are not coordinated to maximize impact at the customer.  What I have found can be effective is to hold a facilitated strategy and planning session across a broad section of teams involved with the GTM, with the goal of developing a cross department strategy and execution plan for impacting the value to customers (rather than brokering departmental compromise).

 

What Does this Mean for the Rest of Us?

One of the things I find frustrating about many of the books about leadership is that there seems to be a focus on leadership as a “personality” or a “hero story”. In my experience, Leadership is something we all need to do in our jobs, and Management is how you get great execution and results.

Below are some thoughts on how you might think about Leadership and Management culture in your organization, and what you can do to about it:

Leadership?

o   Do people feel it is their job to point out a better way to do something, or a better strategy?

o   Does the “leadership” of your company encourage this (or do they have all the good ideas)?

o   Do you hear people in the hallway talking about “them” as if the leaders were some other group of people?

o   Does everyone in the organization understand the major goals and initiatives of the company, and how what they are working on impacts these goals?

o   Do departments work together to pursue these company goals, or is the focus on setting and meeting departmental goals and “winning” the internal battle for resources

Management?

o   Does your company measure the impact of programs, to see what works, and what does not?

o   Does your company identify the employees who are driving the most value to the company and make sure that steps are taken to develop and retain these people?

o   Does your company reward taking risks and going into new business ventures with uncertain outcomes?

o   Are you the innovator, or something else? Business writers have often commented on how for mature companies, a strategy based solely on line extension is the safe bet (and a path to obscurity), because inevitably some smaller, nimbler company takes the lead in new markets.

o   Do your executives act like they have all the good ideas, or is their focus in empowering their organization?

• I’ve often seen tech cultures where there is a kind of executive arrogance, and that aura extends out to customers. My observation is that in a large company, the middle managers see what is happening, but need support from their management in breaking down these barriers.
• Is your management team focused on breaking down barriers for their teams, or in advancing their own agenda?

Neither?

o   I think we’ve all seen companies and specific managers or executives that don’t seem to exhibit either Leadership or Management. They don’t seem to lead or articulate a strong functional vision, and they don’t seem to be a strong manager of their department or their people to get results. What is up with that!!!

o   The best I can tell is that for some of these “managers”, the primary skill is working the organization for their own best interest, or survival. Once you understand this agenda, you can work around it, but a better culture would be for company culture to not support this work style.  No surprise – things are not always fair…

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