It is an age of increasingly scarce resources and world markets. Enterprises face increasingly fierce competition not only from down the street but from enterprises halfway around the world that have access to cheaper labour, less expensive materials, or better technology. In the 1950s and 1960s, Americans made about one-quarter of all the manufactured goods in the world market. Then the Americans competitive edge started to slip.
Foreign producers, now challenge entire product areas that used to be dominated by American Industry. Their trade and domestics deficits are now enormous. To solve this problem, to improve and restore the competitive edge of small business client base, I recommend teaching leadership as well as management. We need to move beyond the simplistic and boring, everyday management skills commonly taught in core courses in business schools. Important as these skills are, we need to redirect our focus towards the essential ingredient required to put these skills to work leadership. As Warren Bennis and Burt Nanus have expressed it, The problem with many organizationsis that they tend to be overmanaged and underled.
There is a profound difference between management and leadership, and both are important. To manage means to bring about, to accomplish, to have charge or responsibility for, to conduct. Leading is influencing, guiding in direction, course, action, opinion. Other characteristics include: motivating and inspiring individuals, providing direction and vision, earning the respect of others, turning talent and efforts into results, and being an excellent communicator and listener. The distinction is crucial. Managers are people who do things right, and leaders are people that do the right thing (Bennis, cover). The difference may be summarized as activities of vision and judgement effectiveness versus activities of management routines efficiency. Do students need leadership education? There is a considerable body of evidence that suggests that they do.
First it is clear that something is not working. Small businesses fail frequently. For example, a recent study funded by the Small Business Administration indicates that 37.3 percent of small businesses survive the first six years after start-up. In this fiercely competitive age, we cannot afford a 37 percent success rate. The education system must continually improve efforts to strengthen the small businesses that form a vital part of our economic system. We know action is called for, but is leadership education a top priority? Research on reasons for small business failure hints at inept leadership, but usually cites poor management as a prime reason for failure.
Research on what it takes to be a successful small business owner also suffers from a lack a clear distinction between management and leadership. Fortunately, there is one big difference. Everyone seems eager to talk to the successful and try to learn the secrets of their success, similarly, the successful enjoy talking about how they became successful. As a result, the popular press is full of success stories with titles like, Tips from the Top (Braham), Todays Leaders Look to Tomorrow (Fortune), and Business Lessons from Billionaire Ross Perot (Mason). Many of these articles are compiled from extensive interviews. And what do the highly successful tell us? Their message is that effective research is critical to success.
Bennis and Naus argue that business schools are focusing on the wrong thing. They feel that, schools and businesses should be teaching the principles of effective leadership rather than simply management skills. Teachers should be helping their business students begin the lifelong process of internalizing these principles. The major problem is that what management education does do moderately well is to train good journeymen women managers; that is, the graduates acquire technical skills for solving problems.
They are highly skilled problem solvers and staff experts. Problem solving, while not a trivial excersise, is far removed from the creative and deeply human processes required of leadership. Whats needed is not management education but leadership Education. The education system can train people to be leaders in addition to training them to be managers. All most of us need to do to improve our programs is to adopt a new perspective a new vision. Leadership, in my view the key word. It is at the core of what has been referred to as the competitive edge. I have argued that, perhaps, the single most important thing in entrepreneurial ventures, is a focus on leadership to gain the competitive edge in addition to simple diplomatic management Once you focus on the need of leadership, you will be surprised at the wide range of opportunities and successes that can be explored and achieved to business owners who posses these qualities and apply them to the basic concepts of management.
