Leaders are change managers; this statement or thought is rather clichéd but true as we enter the new age where organizations might not even last 20 years or less if they fail to have the right kind of human resources. This shortened life of mediocre organizations is a result of dynamic scenario that we have around us.
If we look at the environment there are a number of resets within and around various industries. For example the recent financial crisis has caused a change in the mindset of policymakers and regulators about how banks should roll out funds and products. This change in mindset is expected to lead to regulatory changes like new taxes or stringent policies for hedge funds and so on. The point is that such changes demand firms, banks in this case, to transform and change or otherwise be overwhelmed by changes in the environment and than either come out with a reactive strategy to face extinction.
Yes, all companies need managers and for the foreseeable future managers will continue to do work that runs the companies in the short-run though what we must understand is that leaders within the firm determine the longevity of the firm’s existence. Leaders ensure that objectives are set and vision is followed across the organization.
Before we go into details it is important to understand here that leaders are needed at all levels of management in a firm. So if banks have to survive and stay profitable in highly regulated environment of the near future than they must have leaders throughout the organization who could manage change and bring in their creativity and new ideas within their capacities.
Reflection on John Kotter’s Observation: “Leadership is different from management, and the primary force behind successful change is the former, not the latter. Without sufficient leadership, the probability of mistakes increases greatly and the probability of success decreases accordingly.”
Kotter’s statement must be seen in the context that it was written and explained. Firstly, the great debate between management and leadership has yielded some excellent theoretical work from management and leadership thinkers and this statement also is one such example where the author explaining and discussing the difference that exists between leadership and management.
We must understand that leadership is difficult to explain simply because there are so many dimensions to a leader and leadership. It has a lot to do with the perspective and the microscope through which we see things and situations. In the case of this statement the author is specifically talking about leaders in organizations that revolutionize the work place. More importantly the author has made change a constant in this statement by assuming that all leaders must change whatever they have at hand. This is an interesting presumption as it highlights that leaders are always thinking toward change and they have a proactive mindset. (Kotter, 1999)
Another important distinction that must be analyzed is that even though leaders have a fixed vision or long term view of how the organization would be in 50 years time for instance though what might require change is the way to get to that long term aim or objective; a lot of firms evolve through time this is due to their leaders who understand that industry dynamics demand certain changes and that is why return on investments, profitability might remain the core long-run objectives but achieving them might become an absolutely different ball game.