1 Leadership for Social Enterprises. 2 What Executives Do Functions of a “manager” (Henri Fayol,...

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Leadership for Social Enterprises

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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

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A typical pattern

• A successful entrepreneur looks to the future—and 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

entrepreneurial—or 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?

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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 Manager’s Job: Folklore & Fact". Harvard Business Review, July/Aug 1975: 353-377.

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Executives Are Often More Involved in Management than Leadership

• The difference between managers and leaders

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

Managers… Leaders…

Bennis & Nanis

…do things right

…do the right things

Kotter …cope with complexity

…cope with change

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What Do Managers and Leaders Do?

Lessons• In a stable, high-competition environment,

good management is paramount• In a dynamic, uncertain environment,

leadership is key

Kotter, John P. "What Leaders Really Do.” Harvard Business Review (1990)

Function Managers Leaders

Deciding what to do Planning and budgeting

Setting direction

Creating networks of people

Organizing and staffing

Aligning people

Ensure that tasks are accomplished

Controlling and problem-solving

Motivating and inspiring

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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 it’s 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)

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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 Conceptual and Policy Primer (Harvard University Press, 2002)

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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%)

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

• According to nonprofit executives, high-performance leaders are– Honest– Faithful to

employees– Decisive– Trusting– Charismatic

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

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What is the Right Nonprofit Leadership Model?

• Percent of nonprofit executives that believe in each model

“Decisive” leader

“Reflective” leader

Collaborative organization

6% 34%

Leader-centered organization

12% 31%

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

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Change Is Inevitable

• Sources of change– Society

(audience and donor wishes)

– Markets (competitors)

– Technology– Government

• Leadership’s role as a steward of change– Empowering new

talent– Helping people to

adapt

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Successful Change

• Elements– Clear goals

– New strategies

– New modes of operation

• Impediments– Executives tackle

change alone– Employees expect

execs to solve all problems

Where are we going?

Figuring out how to get there

Getting there

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Principles for Leading Change

• Keep the big picture in view• Recognize what needs to be

changed (and what doesn’t)• Manage the distress from

change• Give people real responsibility• Get the Board on your side• Keep key donors in the loop

Heifetz, Ronald A. & Donald L. Laurie. "The Work of Leadership." Harvard Business Review (1997)

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Conclusions

• Seek the right balance between management and leadership…

• …but don’t 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

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

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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


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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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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


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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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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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Coaching Leadership

• Counsels employees• Highly values human capital, and

looks for individual strengths• Delegates in order to develop

employees• Can be extremely time-

consuming


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