Leaders vs. Managers

When employees look at the structure of their business or institution they miss an important aspect. Not everyone above them in the hierarchy is a manager.

Managers are the people who are tasked with doing things. They are tactical people. Their role is to be efficient, accountable and manageable. They use the resources they have been charged with and achieve the overall goals of their unit. That is the same role that an investment advisor plays or should play.

Leaders on the other hand have different purposes. Their goal is to allocate capital and to bring a team of managers together. They are the dreamer, the coach, the motivator and the decision maker about things strategic. They acquire resources and create value. That is the role the client should play in a relationship.

People starting businesses must notice the difference and arrange for both sides to play out. In the beginning they may have both the leader and the manager role but they must evolve away from the manager role. You can hire managers, but leaders are harder to find. Even if mangers you hire are not as good at it as you are, you should still hire.

Architects should not build buildings.  Lawyers should not type agreements. Doctors should not sweep the reception area. No matter how good they are, they should hire others to do it.

It is called comparative advantage. You may be a little better at manager or typist than others, but you are vastly better at leader or professional. It is not enough to do your best. You must learn to do your best best.

Clients of investment advisors and people running small to medium sized enterprises should decide on questions relating to purpose, time, resources, and risk. Advisors and managers should be the “how” people. Managers and advisors do things right. Leaders and clients choose right things.

Combining skills allows the sum of the enterprise to be greater than it would be on a do everything yourself basis.

Think comparative advantage and your best-best.

Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.  In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you.  don@moneyfyi.com  866-285-7772

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