A common misconception in business is that management and leadership are the same. They are not. The impact and roles of leadership and management are quite different. Leadership is essential for companies who need to grow and create value beyond the levels given by the market. That is, to make things happen which were not already going to happen. If a business has all the growth and value creation it needs, then leadership commitment is not important. Of course, that describes few if any businesses today.

If you want to expand the importance of leadership in your organization, it is useful to determine what the term leadership means to people in your organization. Many do not have a good understanding of leadership and management, as well as why there is a distinction between the two. Many consider the two terms to be interchangeable, that is to be describing the same capabilities. Some will differentiate leaders from managers based on position in the organization. Senior managers are considered to be leaders since they have greater responsibilities.

Leadership is needed in order to produce the “elements of inspiration, vision and human passion which drive corporate success”. In case you think this description is from a recent work, that phase was written in 1977 in a groundbreaking article in the Harvard Business Review. Leaders create the environment which promotes others to excel.

The confusion about differences in leadership and management is harmful to organizations. It serves to diminish the importance of leaders, often in the organizations which most need powerful leaders. Further it reduces the emphasis placed on development of leadership, which only makes the matter worse.

Assessing the Conversations About Leadership

As a C-level executive or General Manager who is contemplating execution of growth strategies and organizational transformation, you are well advised to investigate how the conversation about leaders and leadership occurs in your organization. If you discover there is limited appreciation of contributions made by leaders, you will want to address this issue head on. As a means of investigating the conversations about leaders, I recommend you sit down with a broad cross section of your organization and ask them the following questions.

1.) Are management and leadership the same?

Chances are high that you will get one of two responses to this question:

• Yes, management and leadership are the same. “It is two words we use to describe upper levels of management” is a common response.
• “No, they are not the same”. If you ask for further explanation of the differences, the answers you hear will be muddled and unconvincing. It is likely that somewhere along the way this person has heard a discussion about the differences in management and leadership, but has not integrated the essence into their thinking.

2.) Please identify leaders in your organization.

The person answering this question will likely point toward you and other incumbents in higher level management positions within that part of the organization. There is a common misperception that senior managers are leaders while those in middle management and supervisors are not. This is a perception you will want to disrupt, since many of the strongest leaders you will need in execution are front line workers.

3.) Given who you identified as leaders in your organization, please describe what makes them a leader?

The persons will describe the “leaders” using a description of their management roles, and often the level of their management position. Seldom is there an appreciation that a leader’s role is to make things happen that otherwise would not have happened. That is, leaders interrupt the status quo and redirect the business to a future which is much more compelling.

When you asked others to identify leaders in the organizations, did anyone identify people as leaders who are not in a management position? If so, you should be encouraged! When those around you identify people as leaders in your organization who are not in a management position, you are in an organization that is open to inspiring leadership and implementing strategic change. You will often find that many of the most inspiring leaders in an organization are not in management roles.

When I give this assignment to executives and graduate students, I frequently hear that the people whom they interviewed frequently heard “we only have managers, as I am not sure our organization would tolerate actual leaders”. While this is seldom an accurate statement, it is reflective of the resignation which employees often feel about the attitudes and behavior of incumbents in management positions. It also points toward the visible absence of inspiring leadership.

Why It Matters

Success in executing strategic growth and organizational transformation requires leadership. It is the “oxygen” which maintains life in the strategic execution. As the strategic execution expands across the organization, so too must the emergence of leaders. The execution of strategies will proceed only as fast as the emergence of leadership. Likewise, the expediting of developing leadership will accelerate execution of strategies. This is why some of the most effective execution projects combine leadership of strategic execution with developing of leaders.

 

Having these conversations could be a catalyst for change in your organization. If change is on the horizon, you may want to read our whitepaper entitled, ‘Change Management vs. Change Leadership’.

In it you will gain insights and answers, such as:

• What is the key difference between these two and why is it critical?
• A simple exercise framework to look at the level of the problem driving the change effort
• Understanding the distinction between a ‘default future’ and an ‘invented future’

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Seventy percent (70%) of change efforts fail to deliver the expected results, according to Changing Change Management in the July 2015 issue of McKinsey Quarterly. The low success rate is attributed in part to the limited scope of most change management techniques, which focus on control and minimizing distractions. Change management is appropriate for small, contained changes such as updating the software in an accounting department. It is not appropriate for change efforts as complicated as post-acquisition integrations, in which case change leadership techniques are required. John Kotter describes the differences in change management and change leadership as:

Change management, which is the term most everyone uses, refers to a set of basic tools or structures intended to keep any change effort under control. The goal is often to minimize the distractions and impacts of the change. Change leadership, on the other hand, concerns the driving forces, visions and processes that fuel large-scale transformation.

Post-acquisition integration is a complicated form of strategic execution that requires breakthrough designs and unique organizational accountability during implementation. We think that organizing the integration as a series of well-orchestrated breakthrough projects is the optimal means of:

• Accelerating employee engagement
• Aligning product and service offering to capture additional customers and geographies
• Developing additional leadership capabilities
• Establishing new levels of organizational accountability
• Achieving the expected financial results and value capture

The cornerstone for creating Breakthrough Projects is the Charter. The Charter provides authorization and direction for the project and the people involved. The essence of a Breakthrough Project is that it is a commitment to accomplish what is possible, but not predictable given the current circumstances. Accomplishing the Breakthroughs will demonstrate that the people in the organization as capable of accomplishing more than they, and others, previously thought they could. The accomplishments achieved by the Breakthrough Project lay the foundation for transforming the organizational culture during the midst of post-acquisition integration.

A Compelling Future is Essential

While creation of a compelling future was hopefully the basis for the acquisition, it is wise to assume that the ability to comprehend or “see” that future quickly dissipates in all the chaos surrounding closing to the transaction. A Charter for Breakthrough Projects provides a new means of seeing that future. The context for writing the Charter is from the future. The Charter authorizes and creates a project which will provide, at least in part, the path from the present to the future.

Give Them a Bigger Problem

Creating a Charter for a Breakthrough Project during post-acquisition integration also has a particularly therapeutic effect. Anxiety and uncertainty are normal during an integration, since employees from both sides are unsure of what will transpire. Creating a Charter which requires Breakthroughs serves to give this group of employees and these parts of the organizations a “bigger problem to solve”. This is one of the change leadership techniques we discovered long ago. During times of transformation, assigning a group of employees a bigger problem to solve serves to enable and engage them in a powerful way. In a typical change management approach, the focus would be on providing reassurance and attempting to control their anxiety. In change leadership, we seek to deploy their anxiety and energy in addressing big challenges which if addressed will make major contribution to the newly combined organizations.

Identify the Outcomes to be Achieved

Charters are written from perspective of a future which is completely successful. That includes success in the improved offerings to customers, organizational integration, transformed organization culture, and value capture at or beyond the expected levels. Success in acquisitions requires creating clarity of outcomes which cut across functional lines. These outcomes should be thought of as a tapestry which involves all of the organization. These outcomes identify areas that are important for the long run, such as expanding the customer base not shrinking it, expanding geographies, innovating in product and service lines, and increasing market share in areas which are growing and have higher value rather than those which are shrinking.

Summary

Most acquisitions fail to achieve the expected financial results and value capture, but it doesn’t have to be that way. If a post-acquisition integration is approached as strategic execution with key actions framed as Breakthrough Projects, the rate of success dramatically increases from the predicted 30% rate.

 

To learn more about how to plan breakthrough projects, download our white paper, “7 Elements for Chartering a Breakthrough Project”.

In it you will learn:

• what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
• why creating a ‘charter’ is a critical step in the process
• the critical roles that key people must play in the project to enhance success

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