Leadership for Social
Enterprises
1
What Executives Do
• Functions of a “manager” (Henri
Fayol, 1916)
– Plan
– Organize
– Coordinate
– Control
• Is this leadership or
management, or both?
2
Outline
• Basic leadership principles
• Leadership styles
3
A typical pattern
• A successful entrepreneur looks to
the future—and other ventures
• The organization is “led” by a
follower, who is most likely a
manager, not a leader
• Leadership gap develops
• Organization becomes far less
entrepreneurial—or begins to fail
• Social entrepreneur must provide or
find leadership for the organization
4
Questions
• How does leadership differ from
management?
• And how do both relate to social
entrepreneurship?
• What are the special leadership
challenges faced by social
entrepreneurs?
5
Executives Are Often Reactive
Data say…
• Executives are usually thrown from activity
to activity (“putting out fires”)
• Executives often seek interruption from
subordinates (“keeping my ear to the
ground”)
• Executives prefer over written
communication (“updating”)
• Most executives ignore “scientific”
management techniques (“going with my
gut”)
6
Mintzberg, Henry: "The Manager’s Job:
Folklore & Fact". Harvard Business
Review, July/Aug 1975: 353-377.
Executives Are Often More Involved in
Management than Leadership
• The difference between managers and
leaders
Managers…
Leaders…
Bennis &
Nanis
…do things
right
…do the right
things
Kotter
…cope with
complexity
…cope with
change
7
Bennis & Nanus (1997) Leaders : The
Strategies for Taking Charge
Kotter, John P. "What Leaders Really Do.”
Harvard Business Review (1990)
What Do Managers and
Leaders Do?
Function
Managers
Leaders
Deciding what to do
Planning and
budgeting
Setting
direction
Creating networks
of people
Organizing and
staffing
Aligning
people
Ensure that tasks
are accomplished
Controlling and
problem-solving
Motivating and
inspiring
Lessons
• In a stable, high-competition environment,
good management is paramount
• In a dynamic, uncertain environment,
leadership is key
8
Kotter, John P. "What Leaders Really
Do.” Harvard Business Review (1990)
Too Much Management, Not
Enough Leadership?
• A managerial culture maintains and
relies on stasis
• Leaders know that your only
opportunity to fix something is before
it’s broken
• Leadership relies on vision and the
ability to effect change
• “Most U.S. corporations today are
overmanaged and underled.”
9
Zaleznick, Abraham. “Managers and
Leaders: Are They Different?.” Harvard
Business Review (1977)
Preliminary Conclusions
and Trailing Questions
• Management and leadership are
different
• Effective leadership is important
• Change is a key concept for effective
leaders
10
Where Are Social Enterprise
Leaders?
• Founder
• ED/President/CEO
• Super-volunteer
– Catalyzing a community
• Active trustee
– Marshalling a large funding jump
• Venture philanthropist
Frumkin, Peter. On Being Nonprofit: A
11 Conceptual and Policy Primer (Harvard
University Press, 2002)
The Special Challenge of Social
Enterprise Leadership
• For-profit leadership literature
assumptions
– Power
– Autonomy
• Social entrepreneurs must lead
from above, but also from below
– Persuasion vs. coercion
12
Characteristics of
High-Performance Leaders
• According to
nonprofit
executives, highperformance
leaders are
• What do
employees
admire in a
leader?
– Honesty (88%)
– Forward-looking
(75%)
– Inspiring (68%)
– Competent (63%)
Kouzes, J. & Posner, B. (1995).
The Leadership Challenge
– Honest
– Faithful to
employees
– Decisive
– Trusting
– Charismatic
13
Light, Paul C. Pathways to Nonprofit
Excellence (Brookings Institution
Press, 2002)
What is the Right Nonprofit
Leadership Model?
• Percent of nonprofit executives that
believe in each model
“Decisive” “Reflective”
leader
leader
Collaborative
organization
Leader-centered
organization
14
6%
34%
12%
31%
Light, Paul C. Pathways to Nonprofit
Excellence (Brookings Institution
Press, 2002)
Change Is Inevitable
• Sources of
change
– Society
(audience and
donor wishes)
– Markets
(competitors)
– Technology
– Government
• Leadership’s role
as a steward of
change
– Empowering new
talent
– Helping people to
adapt
15
Successful Change
• Impediments
• Elements
– Clear goals
Where are we going?
– New strategies
Figuring out how
to get there
– New modes of
operation
Getting there
16
– Executives tackle
change alone
– Employees expect
execs to solve all
problems
Principles for Leading Change
• Keep the big picture in view
• Recognize what needs to be
changed (and what doesn’t)
• Manage the distress from change
• Give people real responsibility
• Get the Board on your side
• Keep key donors in the loop
17
Heifetz, Ronald A. & Donald L. Laurie.
"The Work of Leadership." Harvard
Business Review (1997)
Conclusions
• Seek the right balance between
management and leadership…
• …but don’t confuse them
• Effective change is the nexus of
management and leadership
• Effective nonprofit leaders navigate
special waters
• Focus on key personal qualities:
courage, skill with people, and vision
18
Outline
• Basic leadership principles
• Leadership styles
19
Leadership Styles
• Coercive leadership
• Authoritative leadership
• Affiliative leadership
• Democratic leadership
• Pacesetting leadership
• Coaching leadership
20
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Coercive Leadership
• Demands immediate compliance
• Can achieve short-term results
– Positive shock to a moribund environment
– Key in emergencies
• Can create long-term damage
– Defection
– Creativity and initiative
– Non-financial rewards
• Coercive leadership can lower
employee compensation
21
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Authoritative Leadership
• Characteristics: vibrant enthusiasm
and clear vision
• Encourages people to follow
• Motivates people by showing them
how their work fits into larger picture
• All evaluation keys on adherence to
vision and mission
• Can be ineffective with senior staff
22
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Affiliative Leadership
• “People come first”
• Strives for happiness and harmony
• Results in fierce loyalty, workplace
trust, and a revered leader
• May lower overall effectiveness
– Poor performance may be tolerated
– Tendency to “groupthink”
– Rudderlessness occurs when clear
direction is needed
• This style is best when accompanying
another
23
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Democratic Leadership
• Everybody has a say in the process
• Opposing viewpoints are protected
and respected
• Builds trust, respect, and commitment
• May be counterproductive
– Can lead to endless meetings
– Inhibits efficient decisionmaking
– May lead go-getters to defect
24
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Pacesetting Leadership
• Nobody works harder than the
ED
• Pitches in and sets an example
• Can create moral problems
among less-able employees
• Organization is in trouble if
pacesetter leaves
25
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)
Coaching Leadership
• Counsels employees
• Highly values human capital, and
looks for individual strengths
• Delegates in order to develop
employees
• Can be extremely timeconsuming
26
Goleman, Daniel. "Leadership that
Gets Results." Harvard Business
Review (2000)