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?
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