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Why Startups Need Leaders, Not Bosses There's no place where strong leadership is needed more than in a hectic startup environment in which the odds are most stacked against you, and Herculean efforts to gain and maintain traction are required daily, not quarterly

By Robert Reffkin Edited by Dan Bova

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Q: What is the difference between a leader and a boss?
-- Sphe Ndlovu

A: There's no place where strong leadership is needed more than in a hectic startup environment in which the odds are most stacked against you, and Herculean efforts to gain and maintain traction are required daily, not quarterly. So I see the distinction between the two mindsets an important one to make.

Bosses stick to a preordained script and defined roles, connoting little else but hierarchal authority and approaching their contributions in the context of their own careers—their compensation, personal goals, place on the proverbial totem pole. Leaders, especially the transformational ones, inspire positive change in others, earning trust, creating cohesion and raising morale. In short, bosses tell people what to do, while leaders inspire people to do their best.

When getting a company off the ground, there is no room for bosses, only leaders.

Here are the qualities I believe emerging leaders should possess:

Related: To Build Trust as a Leader, Inspire With Words Backed by Action

An ability to chart the course and get everyone pointed in the right direction.

A visionary can set the path for the company, while a solid boss can execute it, but it takes a true leader to do both. There's too much ground to cover in a startup environment for senior employees to be focused solely on either long-term strategy or day-to-day tasks. Instead, it's vital to create a culture in which people feel a sense of ownership and efficacy in growing the company. I expect all Compass' employees to be both visionaries who recognize opportunities and field marshals who are constantly executing upon them.

An understanding of how to generate resources, not just allocating them.

A boss takes a given set of resources and parcels them out as efficiently as possible; they organize an army. Given the same set of resources, a leader leverages them; they amass an army. In a startup environment, the primary challenge is not typically divvying up resources, but, instead, it's hiring the right people to develop the best strategies and the most efficient processes who leverage those resources. Leaders recognize the difference and focus on not just the next step, but 10 steps down the road, building a company for the long haul and not just checking items off a daily to-do list.

A boundless passion for her work.

The term "nine to five" is a foreign one for the best business leaders, and those who are eager to clock out—bosses included—are ill-suited for an entrepreneurial environment. Even after leaders leave the office, their minds are churning for new ways to adapt and innovate, which makes them exude an excitement for their company that's palpable to every employee.

Related: Give Your Employees an Identity Worthy of Ownership

A 360-degree thirst for knowledge.

It's been said that good leaders must be good learners, and good learners must be good listeners. It's a motto that really resonates with me. Leaders must keep their eyes and ears open to feedback from their staff, their clients and their industry.

A powerful -- and appreciative -- magnet for talent.

People choose leaders, following them to hell and back, whereas bosses are foisted upon them. There's a reason Jennifer Aniston didn't star in a movie called Horrible Leaders. If a boss can't build out his or her own team—recruiting the best members—then there's no way he can be a company leader. Leaders also understand they could have never made it this far alone.

Related: To Motivate Employees, Find a Balance Between Job Enrichment and Job Enlargement

Robert Reffkin

Founder and CEO of Compass

Robert is the founder and CEO of Compass, a technology-driven real estate company in New York and DC.

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