Boss or leader?

Boss or leader?

Entrepreneurs like to be in charge. You start your business so you can call the shots – not someone else. But if you want to grow your business, you’re going to have to learn to give responsibility to others. The question is – how do you become a leader, not just a manager, of others?

The reality is that it takes time and attention to learn how to be a good boss. We may be good at what we do, but being a boss isn’t a natural skill. While it is hard enough to get used to the idea of having others make decisions in your business, the problem is exacerbated because many entrepreneurs never had positive role models of how to be a good manager.

Moreover, the old-fashioned concept of being a boss meant issuing orders and having others follow. Sort of a militaristic hierarchy. For some, this idea of “My way or the highway” management is still appealing. Many entrepreneurs hire their first employees with the idea that they’ll do a lot of the dirty work the entrepreneur no longer has time for. They’ll be extra sets of hands – not extra brains.

But if you want your business to grow, you need extra brains, no matter how smart you are. Those who are on the front lines of carrying out a task – whether it be making a product, making a sale, or shipping the boxes – are usually in the best position to suggest improvements. So we need employees who can think. This requires leadership, not just management.

While this may seem self-evident, hire well. Just as it is easier to be a good parent if you have good kids, it’s much easier to be a good boss if you have good employees. You can’t choose your kids, but you can choose your employees.

When we need help, we’re often tempted to hire anyone we can get. But if you want to be confident giving someone authority, you need to hire someone you consider capable and trustworthy. Of course, this means paying a competitive salary with competitive benefits. You can’t hire good employees on the cheap.

Never give someone responsibility without also giving them authority. If you’re going to give someone a job, allow them to do it; don’t make them come back to you for every decision. This means you have to learn to be comfortable with people making some decisions that are different from those you’d make. Some decisions are just different – not wrong.

Sometimes, however, employees will indeed make what turns out to be a wrong decision. How do good bosses handle that? They spend time with the employee learning why a decision was wrong and how to avoid it the next time rather than rehashing the history and looking for blame.

You also have to share information. Many bosses dole out information as infrequently as bonuses. As a result, employees often don’t have enough data to do their jobs well. You can’t just hand off tasks to others, you’ve got to sit down and spend enough time so they know all the relevant details: the project’s purpose, customer pressures, deadlines, budgets. Let them know their limits: how much can they spend without coming back to you? Be clear on the importance and priority of each task.

Most importantly, let people know they’re being given responsibility because you know they can handle it, not just because they’re a warm body. Most people try to live up to the trust they’re shown.

Finally, recognise that while you want to be a good boss, you’re still the boss. You’re the one who sets the overall vision, direction, and standards of your company. Organisations need leaders, and employees respect fair and thoughtful leaders, especially those who also respect them.


If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.

Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.

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