Effective Management Begins with LeadershipBy
Without clear and convincing leadership, there can not be effective management. That’s an important statement, so let’s say it again: without clear and convincing leadership, there can not be effective management.
Why is this true? Well, principally, management is about directing growth to support leadership. As we saw in the last episode, nature resists stability: there is only growth and decline. And who would willingly choose decline? I’m sure I wouldn’t and I doubt you would either. In fact, we have a huge medical establishment to which we pay enormous amounts of money, the sole purpose of which is to help us to resist the decline that will inevitably come as we age. So we want growth and we are willing to pay dearly to get it.
Let’s get back to the idea that management is about directing growth. I chose the word “directing” for a reason. Achieving some form of growth is easy. In organizations, we can easily grow the number of products we sell, we can easily hire more people and we can easily grow our customer base by cutting prices. We can easily do a lot of things, but do those things make sense? We need leadership to give us the tools we need to make sense of all the options that stand in front of us.
Leadership Makes Management Possible
At a minimum, we need leadership to give us a dream, a vision of the future – and we need that vision to be communicated clearly to us. If we are well grounded in understanding the current competitive environment and our own status, then we can develop our own view of what our priorities should be and how to rank them. But if ours is a large, complex organization, then we really need the leadership to step forward and identify their view of priorities. That enables our entire organization to march to the same beat. Then we can manage effectively by directing the growth that can spring from the vitality of our organization.
What if top leadership is weak? What if leadership does not paint a powerful vision and does not give us a clear statement of direction? What if we can’t figure out leadership’s priorities? Then we are faced with only two choices. The most risky choice to our career in the organization is to step forward and try to fill the vacuum left by weak leadership. Unfortunately, if we guess wrong about the direction top leadership wants to head, then we are likely to suffer consequences for showing our initiative. The other choice is to wait for clear signs from top leadership as to what we should do. In other words, don’t direct our teams, but simply try to conserve what currently exists by controlling all the resources under our command.
This latter conservative approach may be the wise course for the immediate preservation of us and our teams, but in the long run, something has to change. After all, how can you claim it is effective management? There is no plan except trying to hold out until leadership suddenly becomes wise and communicates its vision for the organization.
If top leadership is currently weak, how likely is that to change? Looking at the original S&P500 index might give us some idea. By 2003, only 94 of the original 500 stocks from 1957 were still in the index (1). Some were removed for technical reasons or to make the index a US-only index, but most simply fell short of the growth necessary to stay in the index. Since those firms are still off the index today, their stumble has been long term, not temporary. Once a firm starts focusing on control, it rarely changes its focus back to growth.
Effective management, then, requires that there be effective leadership at the top. The leadership must communicate a clear and compelling vision, along with a believable statement of direction. In large organizations, leadership must also communicate a clear set of priorities so management can provide consistent direction across the organization. Without clear and convincing leadership, there is no effective management.
- Will Ashworth (2009). Invest In The Original S&P 500. Investopedia.
Retrieved on June 2, 2010 at http://stocks.investopedia.com/stock-analysis/2009/invest-in-the-original-sp-500-gm-lo-pep-cl-cr0218.aspx
Gary Clayton is a leadership coach who works with CEOs, operations managers and those who wish to become leaders in business and life. He has seen many companies struggle based on management’s focus on controlling rather than leading the business. He has seen many companies fail to thrive, even when their products and marketing were superior. Gary’s mission is to empower leaders to greater success and larger leadership roles in business and life.