Leadership, Management, and Operations

My work with the Organization Ontology provided me with some deep, structural insight into the nature of Leadership by providing me with a strong contrast between the concept of Leadership and the concepts of Management and Operations.

The foundation for understanding these differences starts with the fully embracing the impact of the reality that organizations are created by people. They are sponsored by people. They employ people. And the products and services that they provide offer value and benefits to people. So, the performance of any organization is all about people.

People need to have a purpose. The higher the purpose, the more inspiration it provides. People will work hard for money. But they will work harder for less money if they feel that the work they do has value. If the purpose is high enough, large numbers of people will willingly donate their time. I mention this not in the pursuit of getting people to work for less. I mention this because it is the responsibility of someone in the organization to inspire people to join the organization and to work together to achieve its goals. They do this by clearly articulating a Purpose and a Vision for the organization and these drive both the cohesiveness and the level of enthusiasm of the people.

Beyond that, every organization has work to do. But before anyone can do any work, people have to be organized and they have to be provided with the means to execute their responsibilities. People must be hired and trained, facilities must be acquired and maintained, and the tools and supporting infrastructure to do valuable work must be put into place. Only when all of the physical assets of the organization are in place will the people be able to do the good work of the organization.

But, even then, success with the delivery of value is not guaranteed. Value is produced only when people fill roles and utilize organizational assets to carry out their responsibilities in alignment with a plan. The strategy and plans of the organization must be executed and this execution must occur each and every day. Additionally, the level of productivity must be examined regularly through metrics and opportunities for performance improvement must be tested and implemented. The goal is to continually increase the amount of value delivered while continually decreasing the cost and time of delivery.

So, in any organization, there is the responsibility for Purpose and Vision, there is responsibility for Organization and Empowerment, and there is responsibility for Scheduling and Execution. If you read the popular literature you will get the impression that all of these can be called Leadership and all of these can be called Management. But when you look at them side by side you can clearly see the difference. Leadership is about Purpose and Vision. It is about the inspiration and motivation of people. Management is about Organization and Empowerment. It is about investing the meagre resources of the organization in the most profitable ways. Operation is about Execution and the delivery of Value. It is about getting the work done each and every day.

These three parts of the organization must work together but each one is distinct and different and requires different skills. You can show Leadership in a Management role by inspiring the people who work for you. And you can display Operational expertise by improving their productivity. But you should not fail to understand the differences between these roles. If your main focus is to create an organization, then you are in Management. You do that within the confines of a Purpose and Vision established by others. On the other hand, if you have delegated the creation of an organization to others, you should not fail to focus your time and energies on the Purpose, Vision, and Strategies that keep the organization in alignment.

Leadership is important. But it is only one third of the picture. Management and Operations are equally important in the delivery of value which is critical to the success of the organization. These concepts are different and it is very valuable to understand these differences and apply them appropriately every day.

I will add one postscript at this point that is often the cause of failure of many highly talented people. When you start out in business, you almost always start in Operations. You receive notoriety because you are good at what you do. You get raises and promotions and are offered more and more responsibility. Then one day you get offered a Management position. Do not fail to understand that overnight your role in the organization has changed dramatically. When you move into Management, your main focus must be to create an organization. If you keep focusing on the delivery of value, you will fail as a manager. You must recognize that your new role is not one step up from your old one. It is a world away from your old one. Instead of getting the job done (Operations) you must do everything in your power to build a better organization so that other people can get the job done (Management). You do this by shifting your focus from Value delivery to the organization and empowerment of the people who are doing Value delivery. In Management, you deliver an Organization and it is the job of that Organization to deliver Value. In Management, you will no longer be measured on how much Value you are able to deliver. You will be measured on how much Value your Organization can deliver. If you are able to make the change and if you are as good at Management as you were at Operations, one day responsibility for the entire Organization will fall to you. And on that day, do not fail to leave Management behind to focus on the difficult task of Leadership – inspiring people to build organizations that deliver significant value. For more on this see my previous entry on Transitioning to an Executive.