In the competitive global economy of today, the success of any organization hinges on two aspects: business management and leadership. Although the two terms are often used interchangeably, they are distinct but related processes that govern how you and your organization operate. Properly understanding and using both will enhance your organization’s performance, innovation, and sustainability.
What is Business Management?
Business management refers to the process of planning, organizing, directing and controlling the organization of a business to achieve specific goals. Business management is focused on the efficient use of resources, which can be human beings, financial capital or materials. The most common duties that fall under business management are:
- Strategic Planning
- Budget Management
- Management of human resources
- Tracking operational performance indicators
- Thinking critically and making decisions
Good management makes sure that daily, operational activities are in place and consistent with the overall organizational plan. Management is also structures, systems, and results over time.
WHAT IS LEADERSHIP?
Leadership is about creating a vision, having a social vision in which people engage you positively. It is more people-centered compared to management which is more process-centered. A good leader inspires plausible actions and outcomes for the future; they engage their employees by motivating them and encouraging them to innovate, and they build trust to create an environment that fosters a level of organizational culture. Some universal leadership traits are
- Visionary
- Emotionally intelligent
- Effective communication
- Accountable and trust
- Adaptable and resilient
Leadership is distinguished from management. A leader does not just manage the current state; a leader creates, develops, and builds a future state of the organization.
Management and Leadership:
The Two are Connected Management and leadership are different, but they are closely related. One can envision management as the steam engine that allows the businesses to run smoothly and leadership as a compass which leads them in a new direction. A business with effective management, without leadership (compass) may have order but it will lack the type of motivational direction that inspires growth. However, a business with effective leadership without management will inspire chaos.
A business often requires individual team members to be effective at both a manager and a leader. A manager who is also an effective leader will not only be able to redirect their teammates’ energy towards their goals, but they will also feel good about completing them. Similarly, a leader who can manage will be able to transform his vision into plans that are tangible and executable.
The Development of Effective Management and Leadership in Business
In order to cultivate both effective management and leadership in business, organizations should consider committing to the following efforts.
- Training and Development – Ensure your team members have the experience and skills to lead and manage.
- Innovation/Initiative – Encourage employees to share ideas and be responsible for their work (ownership).
- Communication – Be clear about what you are trying to achieve, what strategy you are going to implement and how each team member fits into the company’s success.
- Culture – Foster a culture of collaboration, trust and recognition.
- Adaptability – Continuous improvement implies that you will have to learn to manage change as it happens, and leaders will have to be open to learning as they are working.
Conclusion
The world is one of constant change and competition, which makes the combination of great business management and inspirational leadership essential. Organizations that exhibit excellence in both cannot just survive, they can thrive, building teams, motivating employees, pleasing customers, and achieving sustainability. Regardless of if you’re an upstart or a seasoned executive, it is essential going forward to develop your management and leadership skills for long term success.
