COLLABORATIVE LEADERSHIP

                                                                                                                    Leadership and Management

                                                                                Making the Transition

       Leadership is not management and management is not leadership. Leaders are collaborators, motivators and team or organization builders. They lift people up to higher levels of performance and they make everyone around them better. They recognize the special roles and contributions of others and they are critical thinkers and problem solvers who rely on diverse input and multiple perspectives to make sound decisions. Managers, on the other hand, are planners, organizers, directors and controllers of change in their organizations. They have the technical knowledge to plan effectively, organize the structure of the company, direct others and control the finances necessary to run the organization. Although leadership and management functions often complement each other and overlap, they are clearly distinct from each other in that leadership primarily involves the motivation, teamwork and performance of people while management consists of essentially the technical knowledge and ability to run the day to day operations of organizations. The following is an example of an executive who was promoted from operations manager to CEO and the problems that he succeeded in overcoming in making this transition from day to day manager to collaborative leader.

       Luke was the operations manager for a major bank for fifteen years. He was successful in running the day to day operations of this large financial institution through two recessions and one good upswing of the economy. However, in recent years the bank encountered difficult times as the CEO decided to take advantage of the booming housing market by giving high risk flexible rate loans to businesses and residential home owners. Luke was concerned about this decision, but as the bank seemed to be bringing in record profits for a couple of years, his comments were generally ignored. Soon the housing market began to react to this injection of high risk combined with the packaging and selling off of mortgage loans as security investments. The prices of homes plummeted as home owners had difficulty paying off their increasing mortgage premiums and the number of foreclosures increased.  The bank was now on the brink of failure as the Board decided to fire the CEO for his role in making poor decisions that led the financial institution to the edge of disaster. And, they promoted Luke as the new CEO in hopes of stabilizing the bank and helping to restore confidence in the market.

       At first Luke used his knowledge of management to help take control of their decline by eliminating all flexible rate high risk lending to businesses and prospective home owners. Also, he met with financial consultants and experts on restructuring to find ways to prevent bankruptcy and cut costs. However, his management knowledge only took him so far. Employee morale was at an all time low, performance and customer service complaints were increasing and the vision and future mission of the bank was clouded by the uncertainty of the market and financial instability. Luke realized that his true leadership skills were now being tested for the first time.

       His first step was to meet with all of the department heads and supervisors to explain his new direction and vision for the company and asked their help in communicating this vision to all of the employees. He also reassured everyone that he would do all he could to save the bank and keep as many jobs as possible. However, he emphasized the management and employees would have to help by putting a hold on salary increases and new hiring and working extra hours as necessary until the bank was back on track. Luke’s belief in his people and willingness to work with them to help find ways to solve problems seemed to help restore confidence as he communicated the idea and feeling that there was no problem they could not work through together. As a direct result of his efforts, false rumors were replaced by positive feedback and as customers were reassured that the bank would continue they kept their investments intact. Soon Luke was able to depend totally on his managers for the day to day operation of the bank who were performing at increasingly higher levels as he worked with his board and top executives to cut costs and move the bank in a more stable direction.  Gradually, Luke began to realize that he found his true leadership abilities as a motivator, problem solver and both team and organization builder. Gradually, the bank was back on track and out of danger of bankruptcy with only about a ten percent loss in jobs and salaries many of which were absorbed through attrition and agreed upon pay cuts. All of these accomplishments were made possible because of Luke’s leadership that worked through problems, restored confidence in the bank and increased the motivation and performance of employees at a time when many other banks and financial institutions had failed.

       Looking back at his time as Operations Manager he had not realized then how much different a top leadership position was from the day to day management of a business. As well-prepared as he was as a manager, it was his leadership abilities he gradually developed over the years that made the real difference between the success and failure of the bank. Luke, the new CEO and President, had found his mission in the banking business as a collaborative leader.

 
Copyright 2008, Global Leadership Resources: For teaching or classroom use only

Note: The above example is based upon the concepts and principles found in the book, Collaborative Leadership and Global Transformation by Timothy Stagich, Ph.D.

 
                                                             Discussion Questions

1. What are the primary differences between leadership and management?
2. Give some examples of management functions and leadership duties.
3. Why was it difficult at first for Luke to move from Operations Manager to CEO?
4. How did Luke handle the transition from manager to collaborative leader and why did he succeed where others had failed?
5. Why do you think Luke was both a good manager and a good leader?
6. Why did the previous CEO of Luke’s Bank fail in his leadership role?
7. What collaborative leadership abilities or lack of leadership made the real difference between success and failure for each of these CEOs.