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Director or leader - what are the differences between the two roles?

Business success derives from how roles, responsibilities and leadership styles play out in an organisation. In this blog, we look at the differences between directing and leading. Understanding the differences between the two will enable everyone to deliver according to their remit and ensure all actions have an owner.

Fundamentally, a Director offers strategic input; a Leader will ensure operationally, the business can function and each department within the organisation works in tandem.

Director v leader - a larger lightbulb is a metaphor for the director who creates ideas

Areas of responsibility within a business

Let’s start with the basics - there are 10 departments in a business:

  • Shareholder

  • Director

  • Leadership

  • Product / Service Development

  • Operations

  • Marketing

  • Sales

  • Finance

  • Admin / IT

  • HR

Regardless of the size of the organisation, all these departments will need to co-exist, function well and departmental heads will need to be assigned. In a small business, that means individuals may ‘own’ more than one department. So long as the division of responsibility is clear and none of the departments outlined above are neglected, the company structure should operate effectively.

Two acorns with their 'hats' on

Where individuals have more than one role in the business

Where an individual is responsible for directorship and leadership, it’s important to understand the differences between the two functions.

Let’s look at some differentiators between a Director and a Leader:

  1. Directors will be focused on maximising shareholder value; the Leader will seek ways to maximise business efficiency.

  2. Directors define the business plan; the Leader implements the business plan.

  3. Directors are responsible for governance; the Leader is responsible for the leadership and management throughout the organisation.

  4. Directors work on the business and its objectives; the Leader works in the business and oversees delivery of those objectives.

  5. Directors set policy and manage risk; the Leader is responsible for implementing the policy.

  6. Directors will be focused on the strategic direction for the company; the Leader will be focused on how strategies will be implemented and ensure operationally, the company is running effectively.

  7. Directors will define the business model and structure; the Leader will implement the model and manage performance.

  8. Directors set the plan; the Leader engages and empowers the team to deliver on that plan.

  9. Directors have no accountability line to the team, except to the Leader; the Leader holds departments and the teams within them to account.

Operational responsibility versus strategic direction

Leaders will ensure each department runs smoothly and targets are clearly defined and delivered. This will include defining objectives at both departmental and individual level. Recruitment needs, implementation of performance management processes, training and coaching of employees will be their responsibility. Leaders will alert directors to issues around processes and systems and suggest avenues for improvement.

Leaders will ensure safety and legal compliance is met and company policy is enforced. Communication systems (both internal and external) must be both effective and proactive whilst reporting and updates are managed to higher level staff.

It is the role of directors to create business strategies and propose how those strategies may be delivered. Directors are responsible for researching effective processes and systems which will bring greater efficiencies to the business. Directors will oversee compliance of company and legal requirements and communicate any issues to shareholders and company executives.

Directors may oversee issues between departments and ensure each department has the resources it needs to deliver its business targets and stay on track to meet the organisation’s goals in the longer term.

Don't confuse directing with leadership - one sets the objectives and the other delivers on them

Understanding the roles and responsibilities within your company, regardless of its size is crucial to its long term business success.

Directors and leaders will both have objective setting at the top of their agenda; the former, will be responsible for setting those objectives, the latter, seeing them through and reporting back any issues around delivery and resourcing.

Looking for help in directing your business?

Does your business lack direction? Are business objectives clear and communicated effectively through to each team? Do departments understand how their targets are aligned to those of the organisation overall?

Are you struggling to define roles, responsibilities and processes within each department of your business? Is the company operating as one cohesive unit?

Would outsourcing particular departments offer clarity and greater efficiencies to enable you to focus on your core strategy?

Read our blog on The pros and cons of outsourcing your HR

Talk to us at Q&A People Matter - we have the expertise to drive your business forward.


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