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The yin and yang of business life

Leadership and management are two very different things. In small and medium-sized enterprises, leadership is overrated – with management playing a more critical part in the running of a company, according to Shweta Jhajharia.

The principal coach at The London Coaching Group said that employees working within an SME and serving under a charismatic employer are likely to be inspired in their respective roles, but they would be incapable of delivering the desired results if they were undermanaged.

Ms Jhajharia said: “Steve Jobs. Bill Gates. These are the people that most business owners aspire to; leaders with incredible vision who have built empires through their powerful leadership. But while Steve Jobs was envisioning the iPhone, Steve Wozniak was building Apple. While Bill Gates imagined a PC on every desk, Paul Allen was building Microsoft. Next to these monolithic leaders was an equally monolithic manager.”

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Leadership and management are two separate roles within a company but one is not better or more important than the other, and each has its own required functions and activities, according to Ms Jhajharia, who outlines three essentials in every business and explains how the roles of leader and manager differ from each.

The first is deciding what needs to be done. Ms Jhajharia said that a leader outlines the direction of the business and develops the vision of the future, while the manager is tasked to set targets, create plans, and allocate resources in order to achieve that vision.

When it comes to creating networks of people who can accomplish this, the leader aligns people and communicates the direction to the key personnel who will help facilitate the vision, Ms Jhajharia said.

The manager, however, creates the organisational structure, including a set of roles that will be required to achieve the goals, she added.

The third vital facet in business is ensuring that people do their jobs.

Ms Jhajharia said: “The leader motivates and inspires people by tapping into emotions in order to get them moving in the right direction and get them excited about getting there.

“The manager controls problems and systemises the solutions, as well as monitoring the plan in detail and identifying, and correcting, any deviations.”

She added: “As the business owner, many of us must wear the hats of both the leader and the manager. It is therefore critical to make a distinction between your roles, and be aware of what you are doing and how you are doing it.

Adviser view

Carl Melvin, director of Affluent Financial Planning Limited, based in Renfrewshire, Scotland, said: “Just because you build a business, it does not mean that you are the best person to run it. I think leaders can help to kick-start a business by providing a vision and inspiring the workforce. Over time, and as the company grows, there is an increasing need for better management to facilitate further growth.”