One of the main issues is that most fantastic, charismatic entrepreneurs don't make for the best managers.
Founding teams that understand when it is time to develop the organizational setup, tools and management requirements are the ones that have a chance of being successful, in the long-run.
The first few years of founding a company are all about getting others on board with your ideas, finding the right tools to convince people around you to invest their time and resources to work with you on your dreams.
As the team grows, and clients start to come in, you need to take the next step. Being a leader alone, doesn't cut it if you want to be successful. You have to become a great manager, too.
The only problem is that no one teaches you how to be a great manager—and very few entrepreneurs realize when it is time for them to change their role in the company.
The transition and constant gearing up and down between being a good manager to the team, and a leader to all, has been one of my biggest challenges as an entrepreneur in the last years.
What does a leader do
Every team needs a plan and longterm vision to work toward. Within most smaller organizations the founding team drives the long-term strategy forward. A leader is capable of putting a team together that can work with loose, long-term goals.
Leaders tend to attract followers first and self-starters second.
At an early stage of the company's development, it is important to get the word out there as much as possible. Any new project benefits from an excess amount of external communication on where it wants to go and what it aspires to be.
The more vocal a founding team and the people around them are, the more likely it is the project/company will get noticed, find the funding it needs or attracts its first customers.
A company-, project-, or team leader gets everyone excited and on board with his vision. In an ideal world, they lead by example; making the first steps of their ideas as tangible as possible to others.
What a leader typically does not do, is create structure for those around them. They are focused on the long-term goal and any type work related to process optimization or organizational development tends to be deprioritized. Work is typically done in projects and is very short-term, or very long-term (vision).
What a manager does
When it comes to structure and mid-term work, a manager knows what to do. The manager's role is to create infrastructure for teams within the organization that enables them to be efficient and effective.
Managers use their time to focus less on their own (external) expose. Their focus is on the people within their teams—a good manager is there for others—first and foremost.
It is not uncommon for managers and leaders to be on very different pages when it comes to measuring success—even if the long-term goals are very much aligned
A good manager enables others and gives those around them the security they need to make mistakes. They are not responsible for the acquisition of resources or funds, but make sure these are deployed in the best possible fashion.
Why it is so important to understand the "difference"
Leaders and managers can be one and the same person. Anyone who shows a high level of integrity, long-term commitment and strong communication skills can take on either one of these roles.
Some are more natural leaders than they are managers, though. And there is absolutely nothing wrong with that.
However, it can be challenging for leaders and managers to swith hats and understand when a certain type of focus and style of communication is required by the organization.
Organizations with open communication cultures are a game changer
In open company cultures, the employees will tell the leadership team what they require to do their jobs to the best of their abilities. Maybe even state what kind of organizational structure and tools they would appreciate.
On my own team at GANDT Ventures, I have been fortunate enough that we've managed to establish a culture that allows for feedback and input.
In all honesty, it is extremely challenging to switch between being a good leader to the group and the manager the team deserves to have. As an entrepreneur I have found that my attention span is too short to do both jobs equally well at the same time — and you cannot always afford a team of great managers from day one.
The only thing I know for certain is that not all leaders make for great managers and vice versa. But as long as they both understand their own short comings, communicate what they value and focus their attention on, they are invaluable to any organization.