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Glion faculty member Dr. Denise Shelley Newnham asks the question: what exactly are the differences between leaders, managers and entrepreneurs?

 

“Leaders are in, managers are out, entrepreneurs are waiting in the corridor.”

– Barbara Czarniawska-Joerges & Rolf Wolff, from the paper Leaders, Managers, Entrepreneurs on and off the Organizational Stage.

Many academics have attempted to define the essential differences between leaders and managers, leaders and entrepreneurs and managers and entrepreneurs.

As far back as 1948, Ralph Stogdill introduced the scientific (and measurable) concept of leadership traits and behavior styles. This theory was followed by organizational, situational and servant leadership theories which became something of the accepted norms for the following decade or so.

However, as with many aspects of our lives, things changed amid the tumult of the 1960s. As the public became frustrated with the levels of power vested in their political leaders, so organizations and scholars lost interest in the theories Stogdill had pioneered.

In their place, the concept of ‘management’ was born. In 1970, the guru of management consultants, Peter Drucker, coined the phrase “effective executive” to define the role of the manager.

Unlike the leader, the manager was not supposed to have charisma. More than this, the role became dehumanized, all about driving operational efficiencies and not about personal reflection or strategic thinking.

The entrepreneurs take over

But while the business world spent the rest of the 20th century in thrall to the manager, the entrepreneur was, as Czarniawska-Joerges & Wolff put it, waiting in the wings.

In this century to date, the corporate top table belongs to visionary entrepreneurs like Elon Musk, Steve Jobs, Jack Ma, Jeff Bezos, Oprah Winfrey and others. These massively successful individuals blur the boundaries between leadership, entrepreneurship and management; but with blurring boundaries comes the risk of confusion and an incoherent picture around accountability. Recent history is littered with examples of where this can be dangerous, the most recent case being that of Adam Neumann and WeWork.

So now, in 2019, how do we define the roles of leader, manager and entrepreneur? What are the key differences – and similarities?

Simply put, leaders focus on change, set direction, align and motivate people towards a common vision. Entrepreneurs focus on opportunities, identify social needs and trends, innovate and deal with value creation. Managers focus on complexity, plan, organize, coordinate and control workers1.

Moreover, leaders are catalysts, whereas entrepreneurs are activist. As far as risks are concerned, leaders are risk takers and at the same time risk minimizers. Failure is not acceptable. Meanwhile, entrepreneurs are risk takers and often see failure as impetus for further development. Entrepreneurs are “uniquely skilled at sensing emerging opportunities or the potential of nascent technologies, and through perseverance and determination build successful new enterprises2.

New shapes, new forms

Perhaps inevitably, as soon as definitions are set in stone, new varieties spring up to blur the boundaries once more. We’ve seen concepts like ‘entrepreneurial leadership’, ‘transformational leadership’ and ‘intrapreneurship’ become buzz-words in recent years. The first of these is a blurring of the role of an entrepreneur with the responsibilities of leadership. The second, meanwhile, combines the leadership role with that of an entrepreneur. And the last mixes manager and entrepreneur, removing the risk exposure of the ‘pure’ entrepreneur.

And these won’t be the last . As our society continues to evolve we will always become dissatisfied with the idea that roles – and definitions – are set in stone. By 2048 the science around leadership is sure to look very different to that defined by Ralph Stogdill a century before.

Academic sources:

  • 1 (Dover & Dirk, 2010)
  • 2 (Mayo & Noria, 2005, p.15)

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About the author

Glion Institute of Higher Education
Glion Institute of Higher Education is a private Swiss institution offering bachelor’s and master’s degrees in hospitality, luxury and event management to an international student body across three campuses in Switzerland and London, UK.
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