The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.” – Ronald Reagan

When you started your small business, everything was simple. You were passionate, motivated and you were the one doing the work. However, as your company grew and brought on help, you were thrust into a role that not every entrepreneur is prepared for.

When a boss is a good leader, the employees feel it and reach their full potential. In this article, we’ll show you the 10 key differences between being a boss vs. a leader so you can learn to inspire your employees to accomplish more and help your business succeed.

The 10 Differences Between a Boss and a Leader

1. Bosses Talk, Leaders Listen

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” – Winston Churchill

Some business owners are quick to bark out orders but can struggle with listening. This rubs employees and supervisors the wrong way. Basic communication skills are one of the most simple but important attributes for anyone in a position of power to possess, and a key difference between being a boss and a leader.

To evolve as an owner, take pride in listening. Listen to the concerns and feedback of your employees. Show vulnerability and team focus. Take responsibility when deadlines aren’t met and help your employees with any issues that stand in their way to reach them.

This type of communication is much more likely to resonate with your employees than being harsh and demanding. Successful small business owners listen more than they speak and choose their words with precision. By doing this, your team will respect you more and become more motivated to help you and the rest of the team succeed.

2. Bosses Are Motivated By Personal Success, Leaders Are Motivated By Team Success

“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.” – Lao Tzu

What motivates a boss versus a leader can be telling; the former is generally motivated by their own success, while the latter is concerned with the success of those around them.

For example, a boss may say yes to a huge order the business is not ready to fulfill, only focusing on the money they’ll make from the sale. This could force employees to overwork and risk making mistakes. A good manager would think of how this can affect the workers and evaluate ways to put them in the best position to succeed.

This could mean negotiating a deal to push back the delivery date or borrowing additional working capital to bring in temporary help to fulfill the order.

3. Bosses Push, Leaders Direct

A boss demands blind obedience; a leader earns his authority through understanding and trust.” – Klaus Balkenhol

A boss’s approach to management can be more abrasive than a natural leader. Some employers may push their staff too hard or hold them to unrealistic standards that the workers can’t live up to. This can cause issues inside the company as employees try to find ways to deal with the demands, some of which cause shoddy work and even resentment of their supervisors.

You should approach the job much differently, starting with your attitude. A good employer directs the actions employees should take, instead of demanding things be done. You should focus on the team’s process before the result. Putting yourself in their shoes shows them that you care, and employees will respond positively and get you the results you need.

Changing your approach is hard, especially if you’ve been successful. However, even making an effort to show empathy and the willingness to change can help inspire the people around you.

4. Bosses Micromanage, Leaders Focus

“The key to successful leadership is influence, not authority.” – Kenneth H. Blanchard

As a small business owner, you’ve got a lot on your plate. Depending on the nature of your business, you’re responsible for basically everything that happens inside your walls. This can make it hard to devote your attention to one specific area of need, but doing so will make it easier for you and your staff.

Leaders excel at focusing in on what needs their attention most and delegating the other work that needs to be put aside to address it. An owner lacking this skill will overexert themselves, forcing their input into all areas instead of directing their energy towards the one that needs it most.

Without focus, you’ll get in your employees’ way a lot. This can cause them to lose confidence and feel like their input doesn’t matter. An employee who feels like they’re valued is much more productive than one who is constantly looking over their shoulder. If you find yourself breathing down your team’s necks at all times, it’s worth it to take a step back and let them do their job.

5. Bosses Rush, Leaders Are Patient

When you become a leader, success is all about growing others.” – Jack Welch

One of the most difficult tasks for someone transitioning to a managerial role is going from doing the work to supervising it. Whether you’re the manager of your shift, the head of your department or the CEO, your job is to make sure the goals you’ve set are met.

When things aren’t getting done the way they want them, bosses may opt to take matters into their own hands. While it’s hard to step back and not get involved, doing so can cause more harm than good. Simply put, your employees won’t learn how to do things more efficiently if you go over their heads to get it done.

Being a leader is all about helping your employees do their jobs more effectively. Doing the work yourself and then getting angry about it will only hold them back. Practice patience and understand where your employees are experiencing issues. This will allow you to teach them how to do it themselves, freeing you to focus on doing your own job.

6. Bosses Expect Greatness, Leaders Teach It

“My job is not to be easy on people. My job is to take these great people we have and to push them and make them even better.” – Steve Jobs

Effective leaders are also great teachers. Bosses expect their employees to know the best way to accomplish tasks, even if they’re new to them. The best managers teach their employees the most efficient way to do their jobs. This can be the result of good training, but teaching is much more than that.

Teaching your employees how to do their job to the best of their abilities requires patience, something you’ve learned many bosses don’t have. Patience and the willingness to listen are a big part of what makes someone a great teacher. You can learn a lot about your employees this way, like how they learn and what they’re interested in.

Once you have a better connection with your employees, you’ll be able to reach them on a more personal level. Your words will mean more because they are genuine. Your methods will be more effective because you know what they respond to. By taking the time to understand and educate your employees, you’ll find it easier to achieve results in a more efficient process.

7. Bosses Measure Results, Leaders Measure the Journey

“Successful leaders see the opportunities in every difficulty rather than the difficulty in every opportunity.” – Reed Markham

One of the hardest things to do as an entrepreneur is measure the success of your business. While it’s wise to use results as a performance metric, they don’t always tell the full story of your team’s performance. Your success should be measured by how you got to that result. Bosses often fail to see beyond the bottom line, while leaders focus on how they got there.

If your results were favorable but achieving them drained your company of manpower, morale and time, it may not be the success it appears to be on the surface. Likewise, if your results are lower than expected but your employees pulled together to work through roadblocks, what you’ve learned as a company may be the most valuable result of all.

Measuring your employees, your business and the combined success of both can be tricky, but effective managers find a way. Learn what translates to success and measure your business on how well it does those things. This helps you run your business more efficiently and can remove tons of stress from your employees, creating a better environment and higher-quality work.

8. Bosses Are Stagnant, Leaders Are Innovative

“Leadership is the art of giving people a platform for spreading ideas that work.” – Seth Godin

Some business owners operate based on what they already know. If something used to work, they believe it will always work. The best way to get the most out of your employees is to adapt to them. Constantly reevaluating your processes to better fit the strengths of your current staff is an essential leadership tactic.

Being innovative doesn’t mean simply adjusting your processes every few months. It means bringing refreshing new energy into the building each day, looking for new ways to accomplish goals and asking employees to present new ideas when they have them. Show them that you’re invested in always finding the best way to succeed, valuing their opinions on how they can help you take the business to the next level.

9. Bosses Celebrate Themselves, Leaders Celebrate Their Team

What I have learned is that people become motivated when you guide them to the source of their own power and when you make heroes out of employees who personify what you want to see in the organization.” – Anita Roddick

Team success is handled differently depending on what type of owner runs a business. A boss celebrates reaching goals by patting themselves on the back. A leader celebrates by thanking their team.

Effective business owners understand that nothing the company accomplishes would be possible without their employees. Depending on the size of your business, many people contribute to your success. Some play larger roles than others but, without each and every one, there would be nothing to celebrate.

You can celebrate company success with something as simple as a ‘Thank You’ card or a pizza party. If business permits, you can even invest in a larger celebration like a morale-boosting company outing or a monetary bonus. At the end of the day, it isn’t how you celebrate, but who you celebrate that commands the respect of your employees.  

10. Bosses Cause Nervousness, Leaders Inspire Confidence

The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help or concluded you do not care. Either case is a failure of leadership.” – Colin Powell

The last, but perhaps most important, difference between a boss vs. a leader is how they affect the emotions of the people who work for them. We’ve seen that you need to be an effective listener, teacher and innovator, but the best way to tell if you’re more than just a boss is how your employees react to you.

Nothing makes a business owner happier than an inspired workspace where employees are confident in their abilities and comfortable voicing their opinions. Bosses often create an atmosphere of fear that discourages those behaviors, where leaders create a safe space that nurtures them.

If an employee goes into work every day hoping they don’t have to speak with you, you’re not getting the most out of them. Open communication is key to your small business, and that’s impossible unless your employees want to work for you. Happy people do good work. All you have to do is show them respect and your staff will reward you. That’s why the big successes— the ones that disrupt industries and make millionaires—are only possible with great leadership.

Be a Leader, Not a Boss

Anyone in a position of power can be a boss, but not every boss knows how to be a leader. This role doesn’t come with a different title or salary increase. It’s not a new office or a parking space with your name on it. It’s something you embrace mentally and emotionally that inspires your company and employees to greater heights.

Many business owners get their start as hard workers and fast learners. Transitioning to being the one in charge is tough, but having the willingness to understand and the patience to listen to your employees can help any small business owner become a great leader.

Get weekly business insights & expert advice to help grow your business.