Two leadership styles and the role of direction setting

Those who have analyzed the key elements of leadership and helped us understand the art and science of effective leading have very often spoken of two broad leadership styles:  “leaders” and “managers.” Some confusion arises from these terms because both groups are involved in leading. Perhaps in the Romanian language it would be helpful to label the two groups – “entrepreneurial leaders” and “managerial leaders.”

In John Kotter’s helpful terminology:

Entrepreneurial leaders focus their effort on bringing about strategic change that will create a desired future. They identify the preferred future and inspire people to pursue the vision of having a better day.

Managerial leaders focus on specific goals and apply skills that enable them to navigate the complexities of modern business structures. These leaders rely heavily on planning, budgeting and detailed accountability systems.

The task of direction setting seems to fit naturally with the leadership style of the entrepreneur. It can be more challenging for the managerial leader to function as a direction setter. Direction setting focuses on preferred futures. It identifies a vision that should be pursued. It answers the big questions of “why we are committed to something?” and “what change is necessary to achieve the vision?”

The fact that setting direction comes more natural to an entrepreneurial leader does not exempt a managerial leader from the task. Likewise, an entrepreneurial leader is not permitted to ignore cash flow and corporate culture simply because he prefers something else.

Reviewing the distinction between entrepreneurial and managerial leaders can help us clarify our target in direction setting. The work of direction setting generates a vision of the future … not a long list of mini projects. Direction setting creates an inspiring vision of future possibilities. Direction setting does not emphasize a long, methodical march required to be a little better year-by-year. Rather it paints an enticing picture that pulls people toward the required change.

Direction setting can not be distilled into creating long-term plans. It does however inspire through vision and the hope of meaningful change.

Questions that guide direction setting:

What grand pursuit are we invested in which constantly merits our best effort?

What significant changes are needed in order to achieve our goal?

What new opportunity should be pursued that is faith-stretching and vital for our growth?

An example of direction setting from the history of McDonalds

[Note, if you haven’t seen the film “The Founder” it would be worth your time. The films tells some of the highs and lows of Ray Kroc, who transformed a small restaurant into a brand known around the world.]

Context: The film clip that you are about to see marks one of the critical turning points in the history of the McDonald’s corporation. At the time of this conversation Ray Kroc had the task of extending the McDonald’s franchise.   The work was difficult and despite successfully opening new restaurants, Ray was struggling financially. He bumped into an admirer (Harry Sonneborn) who offered a little advice.

In summary, Mr. Sonneborn suggested that Ray Kroc shift his perspective from running a restaurant chain to being the owner of the property that the restaurants were built on. Harry’s key phrase is: “What you don’t realize is that you are in the real estate business, not the restaurant business.”

In what ways did Mr. Sonneborn offer an entrepreneurial leadership perspective?

Direction setting focuses on change that will bring about a desired future. After seeing this film clip, how do you see these two elements interacting at this critical time in McDonald’s history?

Your task – Finding the boulders, overlooking the dust

Grand visions of the future are rarely achieved by constructing a series of small incremental growth steps. Small steps might bring stability to an organization, but they do not create the change that is needed in our ever changing environment. Your leadership world is constantly being affected by change. In order to be effective you must also change in order to find the opportunities enable you to fulfill the vision.

As a leader you are responsible for direction setting. You shape the vision around you more than others.

What VISION are you pursuing?

What are the biggest boulders than need to be moved which block your path to the future? Look for things that can bring significant change, not incremental advancements.

After you identify the vision and the needed change share your ideas with someone.  Ask for feedback in order to learn how to best communicate an inspiring vision of the future.

Drawing others to embrace the vision will require another skill – Vision casting.