Dan Sullivan: What It Takes—And Doesn’t Take—To Be A Great Leader

Did you think you had to be the leader and manage things too?

Among entrepreneurs, I’ve noticed some deep-rooted ideas about what it takes to be really successful.

Some of them are so ingrained that they’ve almost taken on mythological proportions.

One such “myth” that hinders the growth and progress of many, many entrepreneurs is the notion that to be a good leader you need to be a good manager.

That thinking couldn’t be further from the truth. Yes, for an entrepreneurial company to be successful, it has to have great leadership, and it also has to be well-managed—but that doesn’t mean the entrepreneur has to take on both roles. As a matter of fact, leading and managing your business rarely leads to your best results.

I’ve observed that some of the most successful companies are those where the entrepreneur is an extraordinary leader who has delegated management to those who have the strongest capabilities in all the different areas that management encompasses. This leaves the entrepreneur free to put their greatest energy toward their best skill—leadership.

An important distinction.

Great managers excel at maximizing the value of what’s already been created. In business terms, we’re really talking about cash flow—what’s being generated from what already exists and works. It’s about the present.

The role of a leader, on the other hand, is all about the future. It’s about looking out at what doesn’t yet exist and then creating all the conditions needed to jump to the next level in every area of performance in the company. The responsibility of the leader, then, is to always be creating the future in terms of revenue, profit, reputation, and dominance in specific markets.

These are two very different roles, but I’m not saying it’s impossible for one person to do both. I’ve seen it done successfully. In order to grow a company exponentially, though, the focus of the leader has to be on the future. A good leader will always find good managers, but a company dominated by managers will very seldom find a good leader because the managers will never want to look too much further out than what already exists.

The business school model.

I find it interesting that the most established and prestigious business schools in the world, for the most part, are not producing leaders; they’re producing managers. Yet, when you look at some of the greatest companies in the world, they’ve been created by entrepreneurs who haven’t graduated from a business school, or, in some cases, even attended at all.

Steve Jobs, for example, graduated high school and attended just one semester at Reed College in Oregon. Mark Zuckerberg left Harvard shortly after creating Facebook in his sophomore year. Bill Gates also attended Harvard but didn’t graduate. (He was later awarded an honorary doctorate.)

What these entrepreneurs all had, though, was a passion for creating something new in the world. And going through that process, they developed immense skill at taking what was just an idea and then pulling together all the capabilities and resources in order to build an entirely new kind of enterprise.

More opportunity now than ever to lead.

What I find marvelous about living now in the 21st century is that there are far more opportunities for leaders to make their mark.

If you were to ask me how you could develop your management skills as an entrepreneur, I’d advise you to put your efforts, instead, toward becoming an even stronger leader. This will always attract great managers because it guarantees them a lifetime of managing at a higher and higher level.

But this is the point to take away: It’s the great leaders who create the possibility for there to be great managers.