Leadership vs. Management in Social Enterprises: Bridging the Gap

1. Leadership for Social Enterprises

2. What Executives Do • Functions of a “manager” (Henri Fayol, 1916) • Plan • Organize • Coordinate • Control • Is this leadership or management, or both?

3. Outline • Basic leadership principles • Leadership styles

4. A typical pattern • A successful entrepreneur looks to the future—and other ventures • The organization is “led” by a follower, who is most likely a manager, not a leader • Leadership gap develops • Organization becomes far less entrepreneurial—or begins to fail • Social entrepreneur must provide or find leadership for the organization

5. Questions • How does leadership differ from management? • And how do both relate to social entrepreneurship? • What are the special leadership challenges faced by social entrepreneurs?

6. Executives Are Often Reactive Data say… • Executives are usually thrown from activity to activity (“putting out fires”) • Executives often seek interruption from subordinates (“keeping my ear to the ground”) • Executives prefer over written communication (“updating”) • Most executives ignore “scientific” management techniques (“going with my gut”) Mintzberg, Henry: "The Manager’s Job: Folklore & Fact". Harvard Business Review, July/Aug 1975: 353-377.

7. Executives Are Often More Involved in Management than Leadership • The difference between managers and leaders Bennis & Nanus (1997) Leaders : The Strategies for Taking Charge Kotter, John P. "What Leaders Really Do.” Harvard Business Review (1990)

8. What Do Managers and Leaders Do? Lessons • In a stable, high-competition environment, good management is paramount • In a dynamic, uncertain environment, leadership is key Kotter, John P. "What Leaders Really Do.” Harvard Business Review (1990)

9. Too Much Management, Not Enough Leadership? • A managerial culture maintains and relies on stasis • Leaders know that your only opportunity to fix something is before it’s broken • Leadership relies on vision and the ability to effect change • “Most U.S. corporations today are overmanaged and underled.” Zaleznick, Abraham. “Managers and Leaders: Are They Different?.” Harvard Business Review (1977)

10. Preliminary Conclusions and Trailing Questions • Management and leadership are different • Effective leadership is important • Change is a key concept for effective leaders

11. Where Are Social Enterprise Leaders? • Founder • ED/President/CEO • Super-volunteer • Catalyzing a community • Active trustee • Marshalling a large funding jump • Venture philanthropist Frumkin, Peter. On Being Nonprofit: A Conceptual and Policy Primer (Harvard University Press, 2002)

12. The Special Challenge of Social Enterprise Leadership • For-profit leadership literature assumptions • Power • Autonomy • Social entrepreneurs must lead from above, but also from below • Persuasion vs. coercion

13. Characteristics of High-Performance Leaders • What do employees admire in a leader? • Honesty (88%) • Forward-looking (75%) • Inspiring (68%) • Competent (63%) • According to nonprofit executives, high-performance leaders are • Honest • Faithful to employees • Decisive • Trusting • Charismatic Light, Paul C. Pathways to Nonprofit Excellence (Brookings Institution Press, 2002) Kouzes, J. & Posner, B. (1995). The Leadership Challenge

14. What is the Right Nonprofit Leadership Model? • Percent of nonprofit executives that believe in each model Light, Paul C. Pathways to Nonprofit Excellence (Brookings Institution Press, 2002)

15. Change Is Inevitable • Leadership’s role as a steward of change • Empowering new talent • Helping people to adapt • Sources of change • Society (audience and donor wishes) • Markets (competitors) • Technology • Government

16. Successful Change • Impediments • Executives tackle change alone • Employees expect execs to solve all problems • Elements • Clear goals • New strategies • New modes of operation Where are we going? Figuring out how to get there Getting there

17. Principles for Leading Change • Keep the big picture in view • Recognize what needs to be changed (and what doesn’t) • Manage the distress from change • Give people real responsibility • Get the Board on your side • Keep key donors in the loop Heifetz, Ronald A. & Donald L. Laurie. "The Work of Leadership." Harvard Business Review (1997)

18. Conclusions • Seek the right balance between management and leadership… • …but don’t confuse them • Effective change is the nexus of management and leadership • Effective nonprofit leaders navigate special waters • Focus on key personal qualities: courage, skill with people, and vision

19. Outline • Basic leadership principles • Leadership styles

20. Leadership Styles • Coercive leadership • Authoritative leadership • Affiliative leadership • Democratic leadership • Pacesetting leadership • Coaching leadership Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

21. Coercive Leadership • Demands immediate compliance • Can achieve short-term results • Positive shock to a moribund environment • Key in emergencies • Can create long-term damage • Defection • Creativity and initiative • Non-financial rewards • Coercive leadership can lower employee compensation Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

22. Authoritative Leadership • Characteristics: vibrant enthusiasm and clear vision • Encourages people to follow • Motivates people by showing them how their work fits into larger picture • All evaluation keys on adherence to vision and mission • Can be ineffective with senior staff Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

23. Affiliative Leadership • “People come first” • Strives for happiness and harmony • Results in fierce loyalty, workplace trust, and a revered leader • May lower overall effectiveness • Poor performance may be tolerated • Tendency to “groupthink” • Rudderlessness occurs when clear direction is needed • This style is best when accompanying another Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

24. Democratic Leadership • Everybody has a say in the process • Opposing viewpoints are protected and respected • Builds trust, respect, and commitment • May be counterproductive • Can lead to endless meetings • Inhibits efficient decisionmaking • May lead go-getters to defect Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

25. Pacesetting Leadership • Nobody works harder than the ED • Pitches in and sets an example • Can create moral problems among less-able employees • Organization is in trouble if pacesetter leaves Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

26. Coaching Leadership • Counsels employees • Highly values human capital, and looks for individual strengths • Delegates in order to develop employees • Can be extremely time-consuming Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)