Leadership Versus Management

This is by no means a new concept. The history books are full of inspirational leaders like Alexander the Great or Abraham Lincoln. Yet the idea of "leadership" has become increasingly important in recent decades as the pace of change has quickened.

Companies now need to adapt quickly to new developments, like the rise of hybrid working, instant communication, rapid digitalization, and the competitive edge that new production processes can give.

Examples of recent influential and famous business leaders include Tesla and social media chief Elon Musk; OpenAI (ChatGPT) CEO, Sam Altman; and Amazon founder Jeff Bezos. They all pioneered new avenues and technologies their businesses while turning their brands into household names.

Yet leadership is not the sole preserve of the individual at the top of an organizational hierarchy. Anyone can display leadership ability. Consider an employee who helps resolve a problem for a disgruntled customer. If they handled the issue in an innovative way, then shared their experience with others and inspired them to adopt the new practice, they would have performed the role of a leader without even realizing it.

What Is Management?

Renowned management consultant, John Kotter, wrote, "Management is a set of processes that can keep a complicated system of people and technology running smoothly." [2]

It was required to build the Great Wall of China and to direct the armies of Rome, but it wasn’t until the Industrial Revolution that management became an everyday necessity. As cities swelled with workers from the countryside, managers were required to assign tasks and resources.

Since then, many organizations have grown to become global operators, with complex hierarchies that require management at all levels to be able to operate. Peter Drucker emphasized the importance of management when he wrote: "Without institution there is no management. But without management there is no institution." [3]

So why is management often regarded as the lesser of the two skills?

In the 1960s, increased competition led to a general realization that there was more to running a business than effective administration. [4] The cult of leader as ‘hero’ began to emerge, with Wall Street CEOs like Jack Welch held up as role models for transformational leadership.

This view of leadership persisted throughout the 1980s and 1990s, with management seen by many as a bureaucratic necessity, rather than a positive force in organizations.

It is now acknowledged that both leadership and management are vital to an organization’s success. Leadership is required to create a vision and encourage widespread support, but management is required to actually turn that vision into a reality.

For Kotter, neither is better than, nor a replacement for, the other. He states that, "the real challenge is to combine strong leadership and strong management and use each to balance the other." [5]

Why the Confusion Between Leadership and Management?

Writing for the Harvard Business Review, Kotter outlines three common mistakes that people make when discussing leadership and management: [6]

• They use the terms leadership and management as if they mean the same thing.
• They refer to the top-level executive as responsible for leadership, while lower level leaders are management.
• They consider leadership a personality trait, usually associated with charisma.

Why does this pose a problem? Because it suggests that only one person within an organization need consider the importance of leadership. Furthermore, this mindset suggests that leadership is a trait which cannot be learned.

Management vs. Leadership Skills

Consider the following table, produced by Wharton Business School’s Paul Schoemaker and Cornell University’s J. Edward Russo. It compares the most common traits associated with management and leadership. [7]

Management

Leadership

Direction

Planning and budgeting

Keeping an eye on the bottom line

Creating vision and strategy

Keeping an eye on the horizon

Alignment

Organizing and staffing

Directing and controlling

Creating boundaries

Creating shared culture and values

Helping others grow

Reducing boundaries

Relationships

Focusing on objects – producing/selling goods and services

Based on a position of power

Acting as boss

Focusing on people – inspiring and motivating followers

Based on personal power

Acting as coach, facilitator, servant

Personal Qualities

Emotional distance

Expert mind

Talking

Conformity

Insight into organization

Emotional connections (Heart)

Open mind (Mindfulness)

Listening (Communication)

Non-conformity (Courage)

Insight into self (Integrity)

Outcomes

Maintain stability

Create change, often radical change

From this table, it is immediately clear that both management and leadership are essential for an organization to run effectively and embrace change.

Managers will always be required to create budgets, organize staff and sell products, but leaders are required to bring about big changes when necessary. In this way, the organization remains competitive whether it is a business, public sector organization or academic institution.

Perhaps one of the most famous examples of this is Art Fry, the coinventor of the Post-It® Note. Fry was working at US manufacturing giant 3M when he learned that his colleague, Spencer Silver, had invented a weak adhesive. Silver was struggling to find a use for it, but Fry realized that it could be used to stop his bookmark falling out of his book and began to make samples.

Management were initially reluctant to back the idea, but Fry’s samples proved so popular that within two years the Post-It® Note was a staple of office stationary. [8] Fry demonstrated leadership by having both the vision and persistence to take the Post-It® Note from concept to reality.

Can You Be Both a Leader and Manager?

There is an inherent overlap between leadership and management. Both require some degree of authority, even if that authority is based on perception, as in the case of leadership, rather than an officially assigned position.

Most business leaders will have a number of people reporting to them and are therefore involved in management. At the same time, many individuals in management positions will influence others by using leadership skills.

According to Kotter, however, most organizations have too many managers and not enough leaders. To tackle this, he advocates a situation where superb leaders embrace the future and champion change, while superb managers run complex organizations reliably and efficiently. [9]

Frequently asked questions

Leadership focuses on inspiring and motivating people to achieve a vision, while management is about planning, organizing, and coordinating resources to achieve specific goals.

Yes, an effective individual can embody both leadership and management qualities, balancing vision and inspiration with organization and execution.

Leadership is crucial because it drives innovation, fosters a positive culture, and motivates employees to exceed their potential, leading to overall organizational success.

One misconception about leadership and management using the terms interchangeably - they are different roles. Another misunderstanding is associating leadership only with top executives, and viewing leadership as an innate trait.