Leadership for Social Enterprises

What Executives Do
Functions of a manager (Henri Fayol, 1916)
Plan Organize Coordinate Control

Is this leadership or management, or both?

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Outline
Basic leadership principles Leadership styles

A typical pattern
A successful entrepreneur looks to the futureand other ventures The organization is led by a follower, who is most likely a manager, not a leader Leadership gap develops Organization becomes far less entrepreneurialor begins to fail Social entrepreneur must provide or find leadership for the organization
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Questions
How does leadership differ from management? And how do both relate to social entrepreneurship? What are the special leadership challenges faced by social entrepreneurs?

Executives Are Often Reactive

Data say Executives are usually thrown from activity to activity (putting out fires) Executives often seek interruption from subordinates (keeping my ear to the ground) Executives prefer over written communication (updating) Most executives ignore scientific management techniques (going with my gut)

Mintzberg, Henry: "The Managers Job: Folklore & Fact". Harvard Business Review, July/Aug 1975: 353-377.

Executives Are Often More Involved in Management than Leadership

The difference between managers and leaders
Managers Bennis & Nanis do things right Leaders do the right things

Kotter

cope with complexity

cope with change

Bennis & Nanus (1997) Leaders : The Strategies for Taking Charge Kotter, John P. "What Leaders Really Do. Harvard Business Review (1990)

What Do Managers and Leaders Do?

Function Deciding what to do Creating networks of people Ensure that tasks are accomplished Managers Planning and budgeting Organizing and staffing Controlling and problem-solving Leaders Setting direction Aligning people Motivating and inspiring

Lessons In a stable, high-competition environment, good management is paramount In a dynamic, uncertain environment, leadership is key
8 Kotter, John P. "What Leaders Really Do. Harvard Business Review (1990)

Too Much Management, Not Enough Leadership?

A managerial culture maintains and relies on stasis Leaders know that your only opportunity to fix something is before its broken Leadership relies on vision and the ability to effect change Most U.S. corporations today are overmanaged and underled.

Zaleznick, Abraham. Managers and Leaders: Are They Different?. Harvard Business Review (1977)

Preliminary Conclusions and Trailing Questions

Management and leadership are different Effective leadership is important Change is a key concept for effective leaders

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Where Are Social Enterprise Leaders?

Founder ED/President/CEO Super-volunteer
Catalyzing a community

Active trustee
Marshalling a large funding jump

Venture philanthropist
Frumkin, Peter. On Being Nonprofit: A 11 Conceptual and Policy Primer (Harvard University Press, 2002)

The Special Challenge of Social Enterprise Leadership

For-profit leadership literature assumptions
Power Autonomy

Social entrepreneurs must lead from above, but also from below
Persuasion vs. coercion

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Characteristics of High-Performance Leaders

What do employees admire in a leader?
Honesty (88%) Forward-looking (75%) Inspiring (68%) Competent (63%)

According to nonprofit executives, highperformance leaders are

Honest Faithful to employees Decisive Trusting Charismatic
13 Light, Paul C. Pathways to Nonprofit Excellence (Brookings Institution Press, 2002)

Kouzes, J. & Posner, B. (1995). The Leadership Challenge

What is the Right Nonprofit Leadership Model?

Percent of nonprofit executives that believe in each model
Decisive Reflective leader leader

Collaborative organization
Leader-centered organization
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6%

34%

12%

31%

Light, Paul C. Pathways to Nonprofit Excellence (Brookings Institution Press, 2002)

Change Is Inevitable
Sources of change
Society (audience and donor wishes) Markets (competitors) Technology Government

Leaderships role as a steward of change

Empowering new talent Helping people to adapt

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Successful Change
Elements
Clear goals
Where are we going?

Impediments
Executives tackle change alone Employees expect execs to solve all problems

New strategies
Figuring out how to get there

New modes of operation

Getting there
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Principles for Leading Change

Keep the big picture in view Recognize what needs to be changed (and what doesnt) Manage the distress from change Give people real responsibility Get the Board on your side Keep key donors in the loop
17 Heifetz, Ronald A. & Donald L. Laurie. "The Work of Leadership." Harvard Business Review (1997)

Conclusions
Seek the right balance between management and leadership but dont confuse them Effective change is the nexus of management and leadership Effective nonprofit leaders navigate special waters Focus on key personal qualities: courage, skill with people, and vision
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Outline
Basic leadership principles Leadership styles

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Leadership Styles
Coercive leadership Authoritative leadership Affiliative leadership Democratic leadership Pacesetting leadership Coaching leadership

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Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Coercive Leadership
Demands immediate compliance Can achieve short-term results
Positive shock to a moribund environment Key in emergencies

Can create long-term damage

Defection Creativity and initiative Non-financial rewards

Coercive leadership can lower employee compensation

21 Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Authoritative Leadership
Characteristics: vibrant enthusiasm and clear vision Encourages people to follow Motivates people by showing them how their work fits into larger picture All evaluation keys on adherence to vision and mission Can be ineffective with senior staff

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Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Affiliative Leadership
People come first Strives for happiness and harmony Results in fierce loyalty, workplace trust, and a revered leader May lower overall effectiveness
Poor performance may be tolerated Tendency to groupthink Rudderlessness occurs when clear direction is needed

This style is best when accompanying another

23 Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Democratic Leadership
Everybody has a say in the process Opposing viewpoints are protected and respected Builds trust, respect, and commitment May be counterproductive
Can lead to endless meetings Inhibits efficient decisionmaking May lead go-getters to defect

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Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Pacesetting Leadership
Nobody works harder than the ED Pitches in and sets an example Can create moral problems among less-able employees Organization is in trouble if pacesetter leaves

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Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)

Coaching Leadership
Counsels employees Highly values human capital, and looks for individual strengths Delegates in order to develop employees Can be extremely timeconsuming

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Goleman, Daniel. "Leadership that Gets Results." Harvard Business Review (2000)