Leadership and management are both essential elements of business success. Leadership is closely aligned with the role of a CEO and Management to the role of the President. Even though there is a difference between leadership and management, most people use them interchangeably which is incorrect.
Recently, I was trying to explain the evolution of a business to a client and introduced the idea of business function segmentation. In the discussion, the role of “management” came up. Since up to that point I referred to “leadership” during the early stages of a company, my client stopped me and asked me how I differentiated leadership from management. Here is how I define the differences between leader and managers.
What is Leadership?
In the early stages of a business, leadership by the founder is essential to the success of the business. Strong leaders are followed because of their personality, behaviors, and beliefs. Leaders have an attraction energy. Leaders create a kind of personal gravity that pulls people into their orbit, which is required at various stages of a business and very much so in its early stages.
Some of the key attributes of leaders are their ability to see and articulate the future. Good leaders care about others and inspire and challenge others to take action. To be an effective leader, you have to be viewed as honest and have the utmost in integrity.
The role of a Chief Executive Office or CEO requires a great deal of leadership. A CEO looks at the future and defines a vision of the business. The CEO also deals with relationships outside the company, such as with investors and flagship customers. Therefore, CEOs must be great leaders to share their company’s vision and attract investors and customers with their gravity.
What is Management?
As the business grows, a division of responsibility occurs. To head up these divisions the business needs to add managers. Managers carry out three primary functions of a business division: planning, organization, and controlling. Managers are followed because their direct reports are obligated to do so based on their title. Managers have a push energy. Managers create boundaries for subordinates since managers are held accountable for their own actions as well as those of direct reports.
Some of the key attributes of managers are their ability to execute. Good managers need to be able to review the available resources at their disposal and direct others. Managers need to anticipate any challenges and clear any potential roadblocks. A manager establishes rules processes, standards, and procedures.
The role of a President relies more heavily on management than on leadership. A President and their subordinate managers use historical performance to define what needs to be executed by their direct reports. The President and their managers also deal with relationships inside the company. Therefore, the President and their subordinate managers must be great at execution, assessing available resources and directing others.
Here are a few key attributes that I believe differentiate leaders and leadership from managers and management.
Leadership
Management
Focus Outside of the Business
Focus Inside of the Business
Has Vision
Has Objectives & Goals
Fosters Ideas
Assign Duties
Define the Business (Strategy)
Drive the Defined Business (Execution)
Balance Investments
Maximize Output
Plan
Implement
Doing The Right Things
Doing Things Right
Timeline = Future
Timeline = Present/Past
Long Term View
Short Term Focus
Create Value
Count Value
Have Followers
Have Subordinates
Motivate Others
Control Others
Create Change
Maintain Status Quo
Take Risk
Control Risk
Create Relationships
Build Systems
Sells
Tells
Sets Expectations
Meets Expectations
Eyes the Horizon
Eyes the Bottom Line
Sets the Direction
Plans the Details
Encourages People
Instructs People
Sees Opportunities
Sees Problems
Motivates
Approves
Breaks Rules
Establishes Rules
Inspires Trust
Relies on Control
Do you consciously apply the qualities of leadership vs. management when filling new positions in your business?
