Leadership vs. Management

  • Posted in Default
  • By Pan Chaoyang
  • Date February 18th, 2014 10:16
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  • "I want to lead, but I'm not willing to take the risk."


    I've been hearing variations of this comment a lot over the past few months and it has forced me to rethink my understanding of leadership. For me, leadership and risk go together.

    The comment has come from the CEOs of manufacturing companies we work with, mostly during the training and consultancy sessions we hold with them. The sessions are mostly about trends in the green building sector; which certifications will be needed to stay competitive and most importantly, which certifications provide the most value. From there, these sessions spill over into company culture and vision.

    The companies we speak to are excellent. Much of their success can be attributed to the equally excellent CEOs at the helm. Most of them want to be industry leaders… and this is where the disconnect happens.

    It starts with a question that usually sounds like, "I want to lead. What can I do that's unique, based on the trends you see emerging?"
    When we start answering this question in the context of their products, their own ideas begin to weave in and things start to get interesting. They go beyond following the trends and into describing leading the industry as a whole. Potential options are defined, fleshed out and followed by the stereotypical question which prompts me to rethink leadership.

    "Which one of these options will guarantee a payback and increase in sales?"

    "Guarantee? None of them will. However, we can break them down into increments and test for payback earlier than later."

    "Test for payback? No, I need better than that. I need to be sure this will work."

    "Wait. Are we talking about keeping up with the trends, or are we talking about leadership?"

    "Leadership of course. I don't want to be a follower… but i need to make sure there is a payback. I need to make sure the direction we choose is the right direction."

    "If you are looking for something safe and with an assured payback, let's go back to the trends. They are trends because someone else has tested them, they have market drivers and they are growing in acceptance. They are proven and hence 'right'. Your chance of a short payback is highest with those, but they won't make you a leader."
    "The other options we talked about are innovative. They will require trial and error which means the risk is higher, but they will set you apart as a industry leader. We can help reduce the time to market, but there is still a risk. Which one are you looking to invest in?"

    "I want to invest in becoming an industry leader, but I need to eliminate the risk."


    Being an industry leader is like being pregnant, you are or you aren't. It comes with rewards, but it also comes with risk. It means being first. It is about forging a new path because of a conviction that it is the next evolutionary step.

    I see CEOs who have built successful companies and who consider themselves to be company leaders. For them, the next logical step is to become industry leaders. This shift requires radically different mindsets.

    It is possible to build a successful company by applying well established management principles? Of course it is. Yet this is not leadership, this is management. Here, no innovation is necessary.

    Leading an entire industry is entirely different. It is about having no one else to follow but yourself. It requires the ability to resolve challenges that no one else has yet encountered, turning them into successes along the way. It also requires a vision: something that sets the direction of evolution.

    Being a leader comes with risk. If there is no risk it isn't leadership, it's follow-ship. Leadership is about investing in your own path and being good at sharing your story with others.

    I'm going to stick with my understanding of leadership after all.
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