Leadership Development vs Management Training

Leadership Development vs Management Training by Jack Veale an ESOP Advisor.

In simple terms, Management Training is the process of educating the pupil with best practices, skills development, and management theory.  Leadership development isn’t always about performance and success.  It is about experiential events that put the pupil through a series of experiences that increase their confidence in dealing with changing situations, motivating others in difficult times, and building a portfolio of stories that demonstrate both success and failure over time.   Management Training is about Organizational efficiency versus Leadership Development’s Organizational effectiveness.

Management Training in an ESOP Company typically involves some form of curriculum and checklist identifying skill sets; that when done properly, reflects the pupil’s level of competency, and integrates with performance reviews and incentives. 

·         Typical activities include communication techniques, time management education, problem solving techniques, goal setting, performance reviews, with classes on change management and team building, just to name a few.   

·         Almost all of these activities are formal training events with some form of presentation, by class, by online/intranet tools, or one-on-one teaching/coaching. 

·         The goals for management training are to improve a person’s ability to manage a process, problem, or system, with or without others. 

·         The result is to improve organizational efficiency by reducing mistakes, improving throughput, and or managing change events.

Leadership Development in an ESOP company involves a totally different set of experiences, approaches, and outcomes.  Its focus is to improve organizational effectiveness.  From advising over 300 CEO’s, I found one of the most important aspects of being a successful ESOP CEO, is their capacity to deal with ambiguity, when their decision requires “betting the business.”  That means they have, over many years, developed the capacity to make decisions without having all of the facts, can motivate others to perform at a higher level, and have acquired diverse knowledge, wisdom and ethic to discern truth from fiction, and take risks that others would otherwise avoid or prohibit.  They also have the high drive to learn new things.

Tears of failure are some of the most important experiences a future ESOP CEO can have that will, over time, be the basis of future success.  Concepts of having a vision of the future, and “self-efficacy;” that is, a person’s ability to complete tasks and reach goals, are also involved with this effort.

What are the Leadership Development Challenges for an ESOP Company?

Selecting and measuring pupils for leadership development can be very difficult. 

  •          How do you measure a person’s motivation to learn?
  •      How do you measure their high need for achievement?
  •          How do you measure their capacity to remain focused under stress?
  •          How do you measure their openness to new experiences?
  •          How do you measure their ability to make good decisions without all of the facts? 
  •          Do they have the courage and conviction to withstand the resistance that occurs with change? 
  •          Have they survived a serious failure and turned it into a future success?
  •          Do they have the confidence to achieve results without sacrificing their personal ethic?

Where do you get concrete experience that forces the pupil to experience both success and failure?

 Does the leadership team encourage and nurture these demanding pupils or victims, depending on your point of view? 

Secrets for Success

Be mindful leadership development in an ESOP Company is a change management event, over many years, to develop replacements for your key managers.  Every successful ownership and management transition requires a different set of skills than the ones that got them there.  In other words, the skills that helped the current CEO achieve results, usually are not the same skills that will take the company to the next level of growth and profitability.  It is this challenge that ESOP companies fail to grow and engage others to perform to a higher level. 

·         Do you have a succession plan? 

·         Do you have an organization that encourages risk, change to achieve organizational effectiveness?

·         Does a failure end the pupil’s career path or enhance it? 

·         Are you using team building processes in conjunction with problem solving training to reduce the risks of failure?

·         Are you incorporating “train the trainer” events, and advance management theory to advance the pupil? 

·         Do you use coaching and mentoring processes, with teams?