To Lead or Manage – that is the question
Government organisations, local and national, spend a lot of money on leadership training, aping so it seems what is done in business. But it is clear from repeated reports from the National Audit Office, that both at national and government level, money is frequently wasted through bad organisation and decision making. This suggests that for all the money spent on leadership training, the problem of waste and poor decision-making lies in poor management. Leadership and management are not the same, and training in leadership will not produce good managers or management practise.
In the continuing search for some “holy grail” for business success, there has emerged what may be described as the cult of business leadership, which has developed into an industry of leadership training and coaching.
A report on the training market by Keynote, published last year estimates that the amount spent on off-the-job training by UK private and public sector employers was £19.39bn in the year ending April 2010 including around £2.5bn spent on external trainers. Whilst there is no known information on the type of training being bought by UK businesses, it is considered that from the prominence given to leadership training in training providers’ portfolios, that the amount spent on it must be substantial.
For the training and consultancy industry, leadership provides a new opportunity. For like every other business, training providers are not philanthropic institutions, but businesses whose sole purpose is to make money. Training companies and consultants are adept at producing packages to meet the “training need” as perceived by the market, regardless whether the need is real or imaginary.
What is surprising, is that so many business executives appear so gullible to believe that there really is a “magic button” which guarantees business success and that expensive training courses will enable them to access it. Executives who run successful businesses ought to be able to assess whether a training course enables them to do something that they previously could not, or is merely extolling a fashionable business philosophy.
Why has “leadership” become so important to business success? Certainly leadership has an importance, but to what extent does it really affect business success? Leadership in business is often expressed in the form of “Leadership Strategies”, as variously described by business psychologists. But leadership and management are two different things. There are good leaders who are poor managers and good managers who are poor leaders.
Where is the evidence that training in “business leadership,” actually improves business performance? Inspiring people with “vision statements” and other leadership ideas will not achieve the financial objectives of the business, only the effective management of resources and the motivation of the workforce will ensure success. The cult of leadership in business seems to have more to do with vanity than developing business efficiency. Peter Drucker said “the business world doesn’t need leaders. It needs managers “— people who can actually manage a team of people.”
The principles of leadership derive from military thinking and practice, where its purpose is to instil confidence and direct troops in extreme circumstances of life and death, inspiring them to do things that in normal circumstances they would not do; – such conditions do not exist in business. So is this “leadership” approach sensible in the commercial world, where there is no life or death struggle, only the need to produce profit from a stream of profitable income for the long term future of the business?
Employees are not generally interested in “gimcrack” leadership theories. As the workforce that drives the business, their interest is that the business should exist for the long-term in order to provide them with reliable income, as well as the opportunity to develop their careers, dreams and aspirations. To that end they rely on successful management to provide them with the training they need to do the job, confidence in a product to sell that the customer wants, together with the knowledge that with the right management they can produce the level of profitable income that will guarantee the future of the business for the long term and the future employment on which they rely.
The most important activity of any business is to maintain and develop profitable income for the long-term future of the business and the security of its employees and investors, so all other business activities should support directly or indirectly this activity. Therefore, the most important activity in any business is to manage the resources effectively to maximize the amount of profitable income for the long term future of the business, and minimize the use of assets and investment.
In the world of commerce, businesses are there to produce income. That income is produced by a workforce that understands what its customers want and need, and which seeks to provide a solution that those customers will buy, thus converting their product or service into the cash which the business requires. To do this successfully, a workforce needs to be properly trained in how to achieve the result, have the necessary equipment, have confidence in their product and its delivery, and be properly motivated, directed and remunerated. All this requires effective management of personnel and resources. Leadership may inspire, but it is only effective management which gets things done and ultimately produces income.