What is the Difference Between Leadership and Management?

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Slide presentation authored and presented by Stanford Business School professor, Charles O'Reilly at a dinner sponsored by Trinity Ventures for its portfolio company CEOs and Founders. Professor O'Reilly graciously allowed me to post this and link to it off of my blog, IronGiving.com.

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What is the Difference Between Leadership and Management?

  1. 1. Leadership in Focus: Leading in Difficult Times October 7, 2009 change lives · change organizations · change the world Charles O’Reilly Frank E. Buck Professor of Management Hank McKinnell-Pfizer Director of the Center for Leadership Development and Research [email_address]
  2. 2. In the past year… … and more to come?
  3. 3. The Challenge : <ul><li>What do we mean when we say </li></ul><ul><li>someone is a “leader”? </li></ul><ul><li>What is the leader’s role during times </li></ul><ul><li>of crisis and change? </li></ul>
  4. 4. <ul><li>A Google search on “leadership” resulted in </li></ul><ul><li>200,000,000 hits. </li></ul><ul><li>There are more than 70,000 books on Amazon </li></ul><ul><li>with “leadership” in the title. </li></ul><ul><li>There are 3,500 management books published </li></ul><ul><li>in the U.S. each year. </li></ul><ul><li>The 1991 edition of The Handbook of Leader- </li></ul><ul><li>ship c ited more than 7,500 research studies. </li></ul>Too much information? What is “leadership” really?
  5. 5. “ There are almost as many definitions of leadership as there are people who have tried to define it” Ralph Stogdill (1974) “ In the past 50 years, there have been as many as 65 different classification systems developed to define the dimensions of leadership” E.A. Fleischman, et al. (1991) “ Leadership has been the subject of an extraordinary amount of amount of dogmatically stated nonsense.” “ Leadership is a process whereby one person influences a group of individuals to willingly achieve a common goal.” Your success, and the success of your firm, depends on your ability to get others aligned with your strategy and vision. This raises an important but non-obvious question: Why should anyone want to follow you? What is “leadership” really? Chester Barnard (1948) If your answer to this question is: “ I’m smart or I’m the boss or I control the rewards” you might want to think a bit more about the question
  6. 6. <ul><li>Is there a difference between management </li></ul><ul><li>and leadership? </li></ul>Back to Basics:
  7. 7. <ul><li>Management </li></ul><ul><li>Planning and budgeting- </li></ul><ul><li>Detailed steps for </li></ul><ul><li>achieving results. </li></ul><ul><li>Creating the structures </li></ul><ul><li>to implement these plans </li></ul><ul><li>Controlling activities and </li></ul><ul><li>people. </li></ul><ul><li>Problem solving </li></ul><ul><li>Ability to make the orga- </li></ul><ul><li>nization and systems </li></ul><ul><li>operate effectively </li></ul><ul><li>Leadership </li></ul><ul><li>Setting basic strategies, </li></ul><ul><li>vision, and values </li></ul><ul><li>Communicating (words </li></ul><ul><li>and deeds) to align the </li></ul><ul><li>people with the vision </li></ul><ul><li>Motivating and inspiring </li></ul><ul><li>people to overcome </li></ul><ul><li>obstacles </li></ul><ul><li>Creating change </li></ul><ul><li>Helping the organization </li></ul><ul><li>adapt to new situations </li></ul><ul><li>John Kotter (1982) </li></ul>“ Managers are people who do things right and leaders are people who do the right thing.” Bennis & Namus (1985) Leadership versus Management
  8. 8. Give your employees the definitions of management and leadership and ask them to place you on the following grid: Leadership Management 0 0 + + ++ ++ A Thought Experiment:
  9. 9. <ul><li>Management </li></ul><ul><li>Measurable objectives  x    </li></ul><ul><li>Clear structure and process  x    </li></ul><ul><li>Effective monitoring x     </li></ul><ul><li>Solves problems  x    </li></ul><ul><li>Designs effective systems  x    </li></ul><ul><li>Leadership </li></ul><ul><li>Provides a compelling vision    x  </li></ul><ul><li>Effective communication     x </li></ul><ul><li>Inspires and motivates     x </li></ul><ul><li>Creates change    x  </li></ul><ul><li>Helps group adapt to change     x </li></ul>Strongly Disagree Strongly Agree CEO “A” A Thought Experiment:
  10. 10. Give your employees the definitions of management and leadership and ask them to place you on the following grid: Leadership Management 0 0 + + ++ ++ A Thought Experiment: CEO “A”
  11. 11. <ul><li>Management </li></ul><ul><li>Measurable objectives     x </li></ul><ul><li>Clear structure and process     x </li></ul><ul><li>Effective monitoring    x  </li></ul><ul><li>Solves problems     x </li></ul><ul><li>Designs effective systems    x  </li></ul><ul><li>Leadership </li></ul><ul><li>Provides a compelling vision x     </li></ul><ul><li>Effective communication  x    </li></ul><ul><li>Inspires and motivates  x    </li></ul><ul><li>Creates change  x    </li></ul><ul><li>Helps group adapt to change x     </li></ul>Strongly Disagree Strongly Agree CEO “B” A Thought Experiment:
  12. 12. Give your employees the definitions of management and leadership and ask them to place you on the following grid: Leadership Management 0 0 + + ++ ++ A Thought Experiment: CEO “B”
  13. 13. Give your employees the definitions of management and leadership and ask them to place you on the following grid: Leadership Management 0 0 + + ++ ++ A Thought Experiment: CEO “B” CEO “A” Given where you believe your subordinates would place you: What are the implications for the future of your business—and your ability to lead it?
  14. 14. “ Many writers on leadership take considerable pains to distinguish between leaders and managers. In the process, leaders generally end up looking like a cross between Napoleon and the Pied Piper. This troubles me. ” John W. Gardner On Leadership (1990) Leadership versus Management
  15. 15. <ul><li>Theory and cases aren’t enough . How can we capture the </li></ul><ul><li>subtleties and emotional challenges of leadership and use these </li></ul><ul><li>to provoke the discussion and reflection needed for learning </li></ul><ul><li>about one’s own values and leadership style? </li></ul>How can people learn leadership? <ul><li>Leadership challenges . Each leader was asked to reflect on </li></ul><ul><li>“ the toughest challenge” they faced as a leader and to describe </li></ul><ul><li>what the situation was, what they did, and what they learned— </li></ul><ul><li>basis for discussion, teaching, and learning. 200+ vignettes. </li></ul><ul><li>Now being used at more than 600 universities. </li></ul><ul><li>Interviews. Learn from accomplished CEOs and leaders. </li></ul><ul><li>More than 250 interviews, primarily CEOs of entrepreneurial </li></ul><ul><li>companies or leaders facing significant challenges (e.g., turn- </li></ul><ul><li>arounds, start-ups, combat in Iraq) and, more recently, young </li></ul><ul><li>MBAs out 5-10 years—both success and failure. </li></ul>
  16. 16. Think back on your own experience: <ul><li>What were the toughest challenges or the </li></ul><ul><li>hardest decisions you faced as a leader? </li></ul><ul><li>What made these so difficult? </li></ul><ul><li>What did you learn from this experience? </li></ul><ul><li>What advice would you give others facing </li></ul><ul><li>a similar situation </li></ul>How can people “learn” leadership?
  17. 17. Leadership Challenges: What We Heard <ul><ul><li>Taking Charge </li></ul></ul><ul><ul><ul><li>Defining your role </li></ul></ul></ul><ul><ul><ul><li>Forming the team </li></ul></ul></ul><ul><ul><ul><li>Politics and resistance to change </li></ul></ul></ul><ul><li>Getting the Right People in the Right Jobs </li></ul><ul><ul><li>Hiring and firing </li></ul></ul><ul><ul><li>Dealing with prima donnas and poor performers </li></ul></ul><ul><ul><li>Succession </li></ul></ul><ul><li>Defining or Changing the Culture </li></ul><ul><li>Motivating the Workforce </li></ul><ul><ul><li>Aligning compensation and incentives </li></ul></ul><ul><ul><li>Managing diversity and inclusion </li></ul></ul><ul><li>Managing Growth and Change </li></ul>
  18. 18. <ul><li>Danny Shader </li></ul><ul><li>CEO, Good Technology </li></ul><ul><li>Turnarounds </li></ul><ul><li>Downsizing and pay cuts </li></ul><ul><li>Bill Campbell </li></ul><ul><li>Chairman, Intuit </li></ul><ul><li>Performance management </li></ul><ul><li>Resistance to change </li></ul><ul><li>Brian NeSmith </li></ul><ul><li>CEO, Bluecoat Systems </li></ul><ul><li>Dealing with the board </li></ul><ul><li>Arrogant engineers </li></ul><ul><li>Nabeel Gareeb </li></ul><ul><li>CEO, MEMC Electronics </li></ul><ul><li>Taking charge </li></ul><ul><li>Dealing with Wall Street </li></ul><ul><li>Elie Antoun </li></ul><ul><li>CEO, MediaQ </li></ul><ul><li>Dealing with founders </li></ul><ul><li>Making change stick </li></ul><ul><li>Kent Thiry </li></ul><ul><li>CEO, DaVita </li></ul><ul><li>Cultural fit </li></ul><ul><li>Confronting conflict </li></ul><ul><li>Allison Hickey </li></ul><ul><li>General, USAF </li></ul><ul><li>T ransformation </li></ul><ul><li>Gender discrimination </li></ul><ul><li>Debra Reisenthal </li></ul><ul><li>CEO, Novasys </li></ul><ul><li>Dealing with crisis </li></ul><ul><li>Building the culture </li></ul>
  19. 19. Brian NeSmith , CEO of Blue Coat Systems, assumes his position when the firm is in danger of failing. He must deal with a critical but disruptive technical prima donna who is essential for the turnaround. Difficult Conversations -- Four Examples Bill Campbell , Chairman of Intuit and a widely respected leader in Silicon Valley, describes a pivotal investment decision Intuit had to make in 2000. One of his key managers is not on board. Campbell describes how he resolved the issue. Allison Hickey , a general in the Air Force, describes the challenge in trying to transform F-16 fighter squadrons to Unmanned Aerial Vehicle (UAVs) units. The fighter pilots are not enthused about this change. Kent Thiry , CEO of DaVita, a $5 billion healthcare firm, describes how he dealt with a new senior hire who was not fitting in and disrupting the dynamics of the senior team.
  20. 20. Allison Hickey is a general in the United States Air Force. Listen as she describes the challenge she faced when changing the mission of a fighter squadron What would you do? Why? Organizational transformation
  21. 21. KC 135 Hickey was in the first class to have women at the U.S. Air Force Academy. She has more than 1,500 hours as a pilot of KC 135 and DC 10 tankers. She currently is the Director of Future Plans Directorate in the Pentagon and respon- sible for shifting capabilities of the Air Force
  22. 22. From this… … to this As a pilot, how do you feel? F - 16 UAV General Hickey’s challenge
  23. 23. Think of yourself and your team as “signal generators” whose words and actions are constantly being scrutinized and interpreted by others, especially those below you. <ul><li>Calendar management - spend time </li></ul><ul><li>Ask questions </li></ul><ul><li>Follow-up </li></ul><ul><li>Public statements </li></ul><ul><li>Meetings </li></ul><ul><li>Agenda control </li></ul><ul><li>Summarization </li></ul><ul><li>Ceremonies, symbols, language </li></ul><ul><li>Physical settings </li></ul>Lessons? “ You must be relentless and boring.” “ Being intelligent is an attractive nuisance.” Jack Welch Rich Fairbank
  24. 24. “ The first rule is get rid of the troublemakers. Get rid of the people who are the disruptors because they’re just not doing their own job, they are keeping other people from doing their job. You have to go through and move those people along and then communicate to the other people a clear vision of what the game plan is.” Richard Parsons CEO Time Warner Feb. 17, 2006 Lessons?
  25. 25. “ Too many leaders don’t spend enough time making the case for change.” Lou Gerstner Who Says Elephants Can’t Dance? Harper Business, 2002, Lessons?
  26. 26. A FINAL THOUGHT: By virtue of your positions as CEOs, you are all in the business of not only being leaders but also teaching leadership to those in your organization.
  27. 27. “ The man who tries to carry a cat home by the tail learns 10X as much as the man who simply watches.” Mark Twain FACULTY HAVE THE EASY JOB…

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