A guide to the difference between Leadership and Management

In today’s modern working environment, the terms ‘leadership’ and ‘management’ are too often used interchangeably, and their meanings have become confusingly amalgamated. They stand for incredibly different spheres of skills, talents and workplace behaviours, and despite many businesses using common management titles to identify corporate business leaders, it is vital that those in a position of power understand the fundamental difference between the two.

With a high proportion of CEO’s failing in their first few years on the job, and a CIPD survey stating that only just over 20 percent of manager’s in the UK rate themselves highly for purposeful leadership skills, the need for effective leadership development has never been more evident.

What is the definition of management?

Management is a well-established term within business textbooks and company management handbooks, with the conventional definition often invoking images of static processes, interchangeable people, and mainly profit-driven decision-making tactics.

According to the Business Directory, the term management refers to: ‘The organisation and co-ordination of the activities of a business in order to achieve defined objectives.’ As a manager, an employee or business owner is normally responsible for the actual running and administration of a business and its workforce. With many managers defined as rational problem solvers, a successful business manager is very rarely seen – they do not micromanage, yet their influence will be widely felt throughout the company. Ultimately, a manager aims to work behind the scenes to ensure that a business operates as smoothly as possible.

What is the definition of leadership?

Leadership tends to encompass a much broader set of behaviours and actions than management, often centering around long-term achievement and growth strategies if viewed from a business perspective.

On the whole, it represents a concept that is much harder to both define and enact, but Forbes magazine offer that: ‘Leadership is process of social influence, which maximises the efforts of others, towards the achievement of a goal.’ Creating an environment where leadership takes place requires some basic components, including:

• A leader
• A follower or group of followers
• Some type of goal, vision or direction

Essentially, leadership comprises the actions and efforts that a leader makes in order to achieve the goal through the empowerment of his or her followers. Goals and followers can often vary in scope, shape and type, but elements of effective leadership can emerge and be meaningful whatever the size or strategy of the business in question.

A leader personally invests in tasks and projects, and normally demonstrates a high level of passion for work. They take a great deal of interest in the success of their followers, enabling to reach both personal and business goals.

What makes a strong manager?

Strong managers are essential to any successful organisation. The aim of any exceptionally good manager achieves a hardworking, productive and effective workforce that goes above and beyond in terms of productivity and performance.

Good managers also tend to attract exceptional staff; they can help to make the organisation a preferred employer, increase market share, add to profits and productivity, and reduce costs. The staff that work for a committed, enthusiastic manager are normally engaged, committed and ‘go the extra mile’ for both their manager and the business in question.

Strong managers also tend to focus mainly on setting, measuring and achieving goals by controlling situations to reach or exceed their own objectives, and those of the wider business. Their chief goal normally centers around meeting organisational goals and objectives and motivating their employees to do the same.

Four key traits that a strong manager should possess in business include:

• The ability to execute a vision – Good managers have the ability to build a strategic vision based on company strategy and objectives, and are able to break it down into a roadmap for their team to follow
• The ability to direct – Managers are responsible for day-to-day efforts whilst reviewing necessary resources, and simultaneously anticipating fluctuating needs in order to make any changes
• Embracing process management – Strong managers have the authority and foresight necessary to establish workplace rules, processes, standards and operating procedures in order to achieve the ultimate business results
• Adopting a people-focused attitude – Managers are highly aware of the need to look after and cater to the needs of the employees that they are responsible for. This includes listening, involving them in key decisions, and accommodating reasonable requests for change

What makes a strong leader?

One of the most important characteristics that should be understood about leaders is that they commonly do not hold or occupy management positions. Simply put, a leader does not have to be an authority figure within a business organisation – a leader can categorise any person, at any level, with leaderships skills and traits.

Unlike managers, leaders are usually followed because of their personality, behaviour and beliefs. A leader takes the time to personally invest in tasks and projects, and demonstrates a high level of passion for work. They often devote a great deal of interest in the success of both an organisation and individual’s goals and ambitions.

Five key traits that strong leader show possess in business include:

• The ability to execute a vision – A leader knows where they stand, where they need to go, and tend to involve a team in charting a future path and direction
• Demonstrating honesty and integrity – Leaders tend to have people who believe in them, and acting in an honest way and responsible way is key to retaining their trust
• Imbuing inspiration – Leaders are usually highly inspirational, and can help wider teams to understand their own roles and responsibilities in a wider context
• Communicating confidently – Involving staff on critical business decisions, problems and obstacles, and future growth strategies is a key trait of a decision maker

Challenging the status quo – Leaders challenge the standard, comfortable way of doing things, and bring their own unique problem-solving skills to situations

One of the main differences between management and leadership is an authority structure. Many sources make a significant distinction between the two by defining managers as people who have subordinates, and leaders as not necessarily needing or having subordinates. In fact, leaders, who have authority but not a direct manager and employee relationship structure, tend to acquire followers through choice on the part of the follower. Subordinates in a management relationship often exist in a transactional relationship, compelled by organisational rules and structures to obey managers.

As previously discussed, much focus on leadership research at senior manager level centers on how intrinsically ‘leadership’ and ‘management’ are linked, and sometimes used interchangeably. At the heart of many interpretations, leadership is deemed to involve developing an initial vision and inspiring others with an overview of how that vision may be achieved, whilst management often involves translating a vision into reality by guiding the actions and behaviours of a group of people on a day-to-day basis.

Most leadership studies focus on the ways leaders are seen by followers, measuring employees’ perceptions of their leaders’ behaviours, and linking those to followers’ accounts of job satisfaction, performance and other outcomes.

Purposeful leadership is linked to employees job satisfaction, meaningfulness of work, willingness to go the extra mile, intention to quit, sales performance and lower levels of cynicism towards their organisation.

Quick-fire differences between managers and leaders:

• Leaders create a vision, whereas managers create goals
• Leaders are change agents, managers maintain the status quo
• Leaders are unique, managers copy
• Leaders take risks, managers control risk
• Leaders are in it for the long haul, managers think short-term
• Leaders grow personally, managers rely on existing, proven skills
• Leaders build relationships, managers build systems and processes
• Leaders coach, managers direct
• Leaders create fans, managers have employees

Can a good manager translate to becoming a good leader?

An article entitled ‘Three differences between managers and leaders’ discusses three tests that can be applied to managers in order to help them to decide if they have successfully made the shift from managing people to leading them.

The three tests are:

1. Counting value vs. creating value – The article states that managers are the only ones who count value, whilst leaders focus instead on working to generate a certain value that is over and above what a team can create.
2. Circles of influence vs. circles of power – As stated previously, managers have employees and leaders gain followers, which in itself implies that managers can create a circle of power, whilst leaders create a circle of influence.
3. Leading people vs. managing work – The third tests argues that management consists of controlling a group or set of entities to accomplish a goal. In contrast, leadership refers to an individual’s ability to influence, motivate and enable others to contribute towards organisational success.

At a minimum, in order to progress from being an effective manager to a charismatic and successful leader, a person normally must nurture and exhibit certain behaviours, including:

• Employing the right skills – Not all leaders need the same sets of skills, but they do need the skills the serve the demands of the specific situation or of their organisation, and to know how and when to use those skills effectively.
• Possessing the right traits – Key leadership personality traits include determination, courage and persistency. Without the right innate traits, a potential traitor may easily succumb to the challenges at hand within an organisation.
• Recognising a need for change – Whatever the situation at hand, a strong leader can easily identify the actions to take in order to clear a forward path. Communicating simple yet powerful messages to instigate organisational change is one of the main hallmarks of a business leader.
• Confronting opposition – Leaders are skilled at surmounting challenges and obstacles to progress that may seem impossible to managers. They have the vision and foresight to focus on an end goal in the face of unpopular opinion and opposition.
• Inspiring followers – To gain momentum, a leader must inspire their followers. When an organisation is facing change and uncertainty, this is the key time for a leader to demonstrate their worth and enable employees to recognise a person in a position of power and trust.
• Encountering luck – Luck cannot be underestimated in order to bring the right combination of factors together in order to progress as a strong leader. Being in the right situation when circumstances or need perfectly match a leader’s skills and traits is incredibly difficult to artificially engineer.