Leading is a top line function, managing is about the middle lines

Summary : The greatest industry leaders are invariably remembered for their ability to grow revenues, not manage costs. The reason is ...

The greatest industry leaders are invariably remembered for their ability to grow revenues, not manage costs. The reason is that growing revenues is a daunting task over which you have little control. Customers’ wants, needs, and the balance they will strike in what they are willing to pay for can be very fickle. You may make the decisions, but they have veto power. So leadership requires vision and the ability to align others to it. In contrast, when managing you have almost total control over cost decisions. These are all operational and such decisions are almost always very clear. Something either costs less or it costs more.

It is a fundamental principle that all organizations must do both well to be great organizations. Apple today, Intel under Grove, Microsoft under Gates, early Dell under Dell were all glory periods where they were doing both well.  In contrast, HP and Nokia struggles in the late 2000’s came because while they had great management, they had little leadership. It was only a few years before that Steve Jobs and Apple were criticized for having great vision, but often executing poorly and not being that profitable as a result. If you have neither leadership nor management, you are doomed — HP under Carly Fiorina is a great example and Dell’s slide from glory another. If you look at companies that lead their way to the top to only become stumbling giants, for example Microsoft, you will see that they transition from being a leader to being a manager. The reason is that managing is always more attractive to people in big organizations because it carries far less risk. Accomplishments are more easily measured, while failures are easily hidden or excused. Leading brings with it the risk of being a pioneer, or as they say, you can distinguish them by the arrows in their back. 

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