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Management and Leadership: Entrepreneurs Wear Both Hats

written by: Mary White•edited by: Michele McDonough•updated: 12/10/2010

Do you fully understand the relationship of leadership vs. management? As a small business owner, your actions set the tone for the public image of your organization. That's just one of the reasons why you have to choose to function as both a leader and a manager on a daily basis!

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    When you own a small business, it's important for you to function as both a manager and a leader. When you're at the helm of a business – no matter how large or small the organization may be – the way you conduct yourself has a significant impact on whether or not your business is likely to succeed or not. After all, as an entrepreneur, it's your behavior that sets the tone for how your company is viewed by your employees, your customers, and the general public.

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    Understanding Leadership vs. Management

    by Sachin Ghodke (sxc.hu) As a manager, you are responsible for the day to day operations of your business. No matter what type of business you own, meeting your supervisory responsibilities involves spending time engages in planning, organizing, and controlling the activities necessary to run and grow your business. Meeting these responsibilities involves making decisions, allocating resources, sharing information with employees and customers, and serving as a spokesperson for your organization.

    In addition to performing the tasks necessary to run your business, you must also function as a leader within your organization. Entrepreneurs must fulfill both managerial and leadership roles, and being able to do so involves recognizing the difference between management and leadership. It's entirely possible to be a manager without being seen as a leader. Additionally, when those who hold positions of formal authority within an organization fail to exhibit leadership traits, other people often become viewed as true leaders by employees and clients alike.

    Management is your ability to get things done through the formal authority of your position. If you have the "power" to fire employees, and they choose to do their jobs because they are afraid of the consequences, they are responding to your formal authority. Leadership relates to the interpersonal influence you are able to exhibit that is separate from your stated authority. It is the traits that you may have that cause other people to willingly follow you. If employees do what they are supposed to do because they are inspired to be better as a result of their interactions with you, then they see you as a leader.

    It is your employees and clients who will decide whether or not you function as a leader. It's up to you to conduct yourself in a manner that will increase the likelihood that you will be viewed as a strong leader as well as an effective supervisor. That's why you need to communicate openly with team members, take the time to provide ongoing training and coaching to your employees, and to always keep in mind that your actions speak louder than your words.

    If you want your business to be seen as one that "has its act together", then you need to be prepared to function as both a manager and a leader. To do so, you'll need to wear your manager's hat when it's time to plan, organize, and control the work of your organization and you'll need to consistently exhibit the interpersonal traits that will inspire others to respect and trust you and your abilities to the degree that they are willing to follow your lead.