The 4 Major Leadership Mistakes that Many Business Owners Make (Part 1 of 4)
October 2, 2019
Critical Insight Group

In this short series of posts, I’ll cover the 4 major mistakes that business owners, or senior leadership teams of larger companies, make on a regular basis that limits the performance of the organization.

The first major mistake: Confusing ‘running the business’ with ‘leading your people’.

In fact, it’s actually a bit worse, or more complicated. Business owners, or management teams of larger organizations, often confuse ‘running the business’, ‘managing the work’, or ‘administering policy’ with ‘leading the people’.

Why is it so important not to confuse these other activities with leading your people? Because leading your people is the multiplying factor for all other activities. Unfortunately, for most companies this multiplying factor is less than one – meaning their leadership ability is actually reducing the performance of their organization. I’ve seen, and experienced, numbers as high as 82% to 90% of leaders actual hurt or inhibit the performance of their teams, rather than enhance it.

So let’s define these activities so we can differentiate them.

  • Running the Business: Running the business is mostly about making decisions about such things as products, services, channels, pricing, partnership, strategy, etc.
  • Managing the Work: Managing the work takes the results of ‘running the business’ and breaks the resulting work into either operation or projects. These are then further broken down into units of work, sequenced and scheduled, and resources (including people).
  • Administering Policy: Includes such activities as performance reviews, safety training, onboarding, and compensation administration.

While all of these may involve people, they have very little to do with ‘leading’ them. And doing any of these activities well in isolation doesn’t guarantee high performance or great outcomes for the organization.

For example, let’s take the ‘running the business’ decision of opening a new market. It might be the right decision for the company to open a new market, because it will be an opportunity to create new revenue and profits. But if that decision adversely impacts the sales team – say Bob ‘gets’ to be the one that opens the new market, but Bob likes where he is right now and doesn’t want to go open a new market – than you’ll hurt the engagement and performance of the sales team.

‘Managing the work’ examples are much the same. In both situations you are often losing the respect, trust and influence (key factors in true leadership) because you are picking the business over your people. And this fact isn’t lost on your people. So they figure, if you don’t show that you care about them, why should they care about you or the business?

Many leaders mistaken believe that leadership is all about making decisions and/or having the answers. Nope. That’s ‘expertise’ not leadership.

So the point of this first of four short posts is not to make the mistake of thinking that when you’re spending time running the business – making decisions – that you’re leading your people. That’s not what leadership really is. And leadership is the multiplying factor in all organizational and team performance.

Question: Where are you spending time ‘running the business’ (and not focused on helping your people achieve) and mistakenly thinking your actually leading your people?

Next Up: The 2nd of the 4 Major Leadership Mistakes that Most Business Owners Make: Thinking Leadership is a ‘pass/fail’ proposition.


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