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Ownership versus Leadership

Any organization should be continuously on the look-out for talented people who are capable of taking on leadership roles.  In this context you hear the word ‘ownership’ a lot, in reference to ‘owning’ a function, project, or deliverable. The words are often used interchangeably but, I believe, have very different roles. In essence, leadership means leveraging others, while ownership means getting stuff done.  All companies need both, but startups in particular succeed or fail on the basis of leadership and ownership in the organisation.

Ownership

Ownership is about getting something done no matter what. You own something not when you’re hierarchically entitled to be the boss of something but when you cause the end result to happen.  For example, you own product sales if you are at or above quota, and there is no real interaction required by your boss.  You don’t need to be a manager to have ownership, you just have to do the thing that you’re assigned to do and execute it in a manner that means success occurs repeatedly and reliably without somebody above you investing significant time or effort.

Leadership

Leadership is the ability to inspire, motivate, and direct others.  It is fundamentally the ability to leverage other people. Strong leaders create value not through their own work but by enabling others to work more efficiently, more targeted or just plain more. Unlike ownership, leadership is not entirely independent of hierarchy. Fortunately this isn’t much of a hurdle in most startups. If you have strong leadership skills in a startup, you will likely get to the point quickly where you will lead people simply because you are good at motivating and inspiring people. In a large company this may not necessarily be the case if advancement is partly based on experience or tenure – thus limiting the network effect you could have within an organization.

The Employee Perspective

From a career perspective, ownership is better for employees to focus on than leadership in my opinion. Ownership is universally needed and valued. The fastest way to grow your startup career is to grow with your startup as it scales.  Everything attached to revenue generation, product, development, and basically all the core functions of a startup, even things like finance, can scale very quickly…if your startup has a critical mass of people that truly own their functions.  These people will build success in their functional areas, scale the company, and accelerate their career much faster than formal appointment of hierarchical leadership.  When that happens, those employees who additionally possess strong leadership skills will naturally rise to take on the growing areas while those without will remain key individual contributors (especially in startups that maintain a parallel individual contributor professional career track up to higher levels).

The Startup Perspective

In a startup ownership is, in my opinion, the essential founding skill. If a startup wants to have any hope of succeeding at all, it needs people who take complete ownership of their respective functional areas, or, effectively, the company as a whole in the case of the founders. They simply don’t stop, don’t give up, and don’t just check out at the end of the day unless things are done.

With the exception of the founder, leadership is a skill required only at a later stage when the company scales. Most people cannot effectively manage more than a handful of direct reports, so a second layer of leaders below the founder will quickly become crucial. While larger companies have more of a capacity to micromanage employees with low levels of ownership, startups simply can’t.  If you start micromanaging employees in a startup, growth will slow down dramatically. This also implies a need for founders to learn how to “un-own” by allowing the new leadership layer to operate as independently as necessary for the company to grow – a skill that is a major challenge for most detail obsessed founders.

Beyond this transition, it is critical to keep leadership and ownership strong in the organization.   Whereas founders will self-select for ownership and often jealously guard leadership, the success of your startup will depend on the founder’s ability to consciously hire for and nurture both ownership and leadership.