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Family Business Leadership vs Management

By Family BusinessNovember, 2023March 18th, 20242 min read
Family Business Leadership vs Management

A number of people succinctly describe the difference between leadership and management: architects vs builders, what things mean to people vs how things get done. In an entrepreneurial venture and often in a family business in the first generation, one person is often both leader and manager.

As the business evolves, sometimes it is helpful to separate those roles. In one of my tech businesses, I appointed a CEO and stepped back into a notionally non-executive director (but still 100% owner) role. The CEO was a very effective manager (better than I was), but I remained the leader. The dynamic between us worked well because I didn’t want to manage but still wanted to lead. The manager needed to be 100%, but as leader I was able to spend time on other interests.

Family business founders can’t be both leaders and managers forever, and not just because no-one lives forever. If they want other family members to step into roles within the business, they need to create the space for them. This can be scary as founders often find it hard to let go. One way to ease back is to shift from management – an executive role – to leadership – a board/governance role. This transition needs to be a step forward – embracing a new role to mitigate the effects of leaving an established role.

Consider This: Who are the leaders, managers and elders in your family enterprise? How did their roles evolve (or not evolve)? How might your role evolve? 

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