Leadership vs. Management: What's the Difference?

Leadership vs. Management

The terms leadership and management are often used interchangeably. Leadership tends to be associated with “C” level executives and management is linked to mid-line managers. These are rooted in traditional beliefs. But there is a fundamental difference between the two words and their philosophies. While one is more of a change agent, another one is about maintaining the status quo. However, there are overlaps between the two. 

Learn about the basic differences between leadership and management. Understand when and where they overlap. The article will also talk about how leadership and management can come together for the best results. 

What is Leadership?

Most will agree that the definition is that leadership is a state when someone has followers and the authority to influence the followers’ thinking and actions. Part of leadership is motivating a group or society to put their maximum performance towards a common goal. 

Leaders are often looked at as those who make significant changes and/or create a big picture. They set the direction, provide guidance, and empower others to deliver. History is filled with examples of prolific leaders, starting from Alexander the Great and Cleopatra to Abraham Lincoln and Winston Churchill to Barack Obama. In the business realm of things, we can look at the likes of Jack Welsh, Steve Jobs, Tim Cook, and Jeff Bezos. 

One important point to understand is that leadership can’t be tied to a job title or description. Just because you have the title of department director or partner, doesn’t necessarily mean you are a leader.

Styles of Leadership

There are many different styles of leadership, each with its own strengths and weaknesses. Some of the most common ones are:

  • Autocratic: The leader makes decisions alone and expects unquestioning obedience. This can be effective in crisis situations or where quick decisions are needed, but it can also stifle creativity and initiative.
  • Democratic: This style of leadership involves team members in decision-making, and it can generate more buy-in and creativity. However, the democratic style can take a long time to reach a consensus.
  • Transformational: A transformational leader inspires and motivates others to achieve more than they thought possible. They are typically the leaders who can drive change and innovation. A transformational leader is equipped with charisma and strong communication skills.
  • Servant: The leader prioritizes the needs of their team members before theirs and is focused on helping them succeed. This can be a highly motivating and productive leadership style, but it requires a strong sense of humility and selflessness. This type of leadership is advocated in Multipliers by Liz Wiseman and Give and Take by Adam Grant. 

What is Management?

Management is the science of planning, coordinating and directing teams/resources and work flows towards the larger company’s vision and goals. Management is focused on getting tasks completed. 

You could also say that management is about the nitty-gritty or daily tacticals. Things such as setting a budget, assigning manpower, creating and implementing disciplinary rules, and measuring performance fall under the scope of management. The function, therefore, is to provide order and consistency to organizations. 

Difference between Leadership and Management 

A leader can be a manager, but not every manager can be a leader. To say both are the same or equal is like saying “All fruits are oranges.” So, how can we differentiate between the two? 

Let’s look at what James Kotter, Konosuke Matsushita Professor of Leadership, Emeritus, at the Harvard Business School,says to understand the primal difference between leadership and management. Kotter states that “management is all about creating order through processes, whereas leadership is focused on creating change through a vision.

Leadership is more than management, it’s a bigger and deeper role and skill set. Leaders are more advocates of change and have a larger focus. Leadership is also focused more on general guidelines and principles, rather than detailed policies and processes. 

The following table explains the differences between leadership and management in a brief synopsis. 

Leadership Management 
  • Skill of influencing others
  • Leads changes
  • Focuses on vision and long-term strategy
  • Is about motivating and empowering people
  • Conceives new opportunities
  • Creates succession and expansion plans
  • Is concerned with future
  • Discovers and communicates “why”
  • Advocates change
  • Stems from one’s actions
  • Thinks about ideas
  • Uses authority over influence
  • Focused on present, daily operations and tactics
  • Is about implementing detailed processes and procedures
  • Gets tasks completed
  • Identifies and oversees resources
  • Executes plans
  • Knows how and when to get things done
  • Emphasizes control and rationality
  • Tied to a certain job title or hierarchy
  • Thinks about execution
  • A Leader vs. a Manager

    Let’s now delve a bit deeper into the topic and discuss how a leader stands out from a manager.

    1) Leaders create visions, and managers create goals aligned with those visions

    More often than not leaders are visionaries, disruptors, or innovators. They see things that most can’t and then work towards getting everyone to buy into that vision. Simon Sinek points out that leaders have the ability to understand and communicate the “why” behind things. They understand the purpose. Only when people know why, can they be passionate about achieving it.

    Managers, by contrast, know how and when to get things done. They understand the vision and then break it down into short-term goals. It’s what execution managers are dealing with. Managers often create and stick with processes and procedures that will keep things running like a well-oiled machine.

    2) Leaders have a greater risk appetite

    Leaders are not afraid to attempt new things and take on challenges, even if they end up failing miserably. Think about Steve Jobs pushing others to design a phone that’s completely touch screen. Apple was struggling at that time and it was a great risk, but he still pushed for this unique design. Leaders acknowledge that failure is often a necessary step towards success. On the other hand, managers are concerned with reducing risk. Their approach is to avoid or control problems rather than embracing them.

    3) Leaders focus on people, managers are concerned with processes

    Leaders have the ability to develop personal and strong relationships with their colleagues.This is usually because they are able to communicate precisely and thoughtfully. They constantly provide articulate feedback that allows everybody to continue to work towards a goal.

    They also build relationships by having open two-way communication where colleagues can voice their concerns in a safe environment. Leaders know who the stakeholders are and opt to spend the majority of their time focusing on them. Managers, meanwhile, are more likely to support the leader. They can show their support by setting an example for their team.

    Managers are focused on processes and analytics. For instance, for an IT project, managers will take the client requirements, break them into tasks, find the right employees, and oversee the completion of the task within a specified budget. They are worried about making sure tasks are completed as efficiently, with the highest return on investment (ROI).

    4) Leaders are intentional and proactive about long-term goals

    Let’s go back to Apple and Steve Jobs. Back in the early 2000s, few people were of the belief that people would really like the whole internet, calendar, music, and camera on their phones. But Jobs knew what he was doing — he understood the customer long before they themselves knew this product is what they wanted. As a response to the need for convenience, novelty, and the ability to send photos on the go, Jobs used technology to transform the mobile phone industry.

    This example shows how leaders think about goals. They are active in shaping ideas and creating moods and desires that pave the direction for the path the business will take. Leaders adopt a personal and active attitude toward goals. The end result of this intentional goal is that it changes the way people think about what is possible, necessary, and desirable.

    Managers are focused on short-term goals and present situations. They don’t have the ability to look at long-term goals and anticipate the needs of an evolving business environment.

    5) Leaders have a greater circle of influence

    Leaders, due to their communication and interpersonal skills and emotional intelligence have a wider range of influence. They can inspire and empower their employees through the way they communicate and engage with them. This is what makes them able to bring a large number of people together to drive drastic changes. People willingly listen to and wish to follow leaders. Managers drive change more through their authority.

    Basic difference of Leadership vs Management -
                        Leaders focus on people, managers are concerned with processes

    Example of Leader vs. Manager

    Here’s an example of a manager versus a leader. John is a customer service manager. He is responsible for hiring, training, and managing seven customer service representatives. John’s other responsibilities include making sure there is enough manpower to staff the two shifts, helping representatives resolve escalated issues, and conducting performance appraisals. 

    John reports into Kelly who is the Vice-President of Business Development. Kelly got the role because of her ability to innovate and anticipate changing market and customer needs beforehand. She was the one who visioned customer service as a crucial part of growing the company. Kelly understood John’s strengths and abilities and factored that into the long-term strategy. Kelly advocates for change and staying ahead of the curve and creating waves. John on the other hand is content with processes as long as they are working. Kelly is a leader, while John fits the definition of a manager. 

    Overlapping Responsibilities between a Leader and a Manager 

    We’ve understood the key differences between leaders and managers, but that doesn’t mean that there are no overlaps. The biggest overlap is that leadership always includes managing. What does that mean? It means a terrific leader will know how to manage a team or situation. They might delegate the responsibilities but leaders always take ownership of the effective management. 

    The opposite can’t be true. Managers don’t have a deep-rooted responsibility to lead. They can, however, step above their managerial duties and expand into a leadership role. 

    Other areas where there might be an overlap between the responsibilities of a leader and manager are detailed out. 

    1) Communication 

    Both leaders and managers are communication champions. That is how they show control over a team or inspire people to come together and work towards a vision. Managers not only have to communicate about assignments and expectations but also provide support and performance feedback

    Leaders have to communicate their vision and influence people to buy-into their long-term strategy. They use strategies to build a culture that imbibes the company’s core values and increases employee engagement and productivity. Zappos is a great example of how a leader, Tony Heish, built an employee focused culture. Did you know that Zappos employees are offered $2000 to quit their jobs within the first week if they feel the job isn’t a fit for them? Why? Their emphasis is on finding employees who are, first and foremost, a cultural fit; skill-set is a secondary focus.

    2) Decision-Making

    Both leaders and managers have to make important decisions, however, the scope and impact of the decisions vary . Leaders take decisions on a strategic level. Examples of decisions a leader takes are: 

    Should the company expand into a new market? 

    Does the firm have to change its structure to become more flat and fluid? 

    How will the company adjust to a new market demand and conditions? 

    What news needs to be shared with the stockholders? 

    Managers make tactical decisions that affect the organization on a daily basis. These decisions are a choice between two or more alternatives, and the goal is to choose the best alternative to achieve objectives. Below are examples of decisions that a manager commonly makes. 

    How will a new policy impact the organization’s structure?

    Do we need to hire more talent for upcoming projects?

    How can we control the budget for the next fiscal year? 

    Should we introduce a new incentive system to drive sales? 

    Deciding how much product inventory to keep.

    3) Change Management 

    We mentioned earlier that leaders are change agents, however, managers are those that execute and manage that change. That’s why change management is a significant responsibility for both parties. 

    Leaders scope the external business environment and decide which direction the company will take. They assess the situation and then develop a new vision if it’s necessary. Next, they will communicate the reason for bringing change to stakeholders, managers, and employees. 

    Managers are responsible for driving that change through restructuring policies and processes and realigning talent and perhaps even the budget. They have to minimize the risks associated with any change. Managers must also ensure that the changes are well-monitored and working effectively towards the vision of the leadership. 

    Top Skills Required to be a Great Leader or Manager

    We’ve established that in reality leadership and management aren’t the same. Therefore, the skills required for each are also different. Why is it important to know which skills are required for each role? Because without knowing what skills are crucial, you are at a greater risk of making the wrong hire. This can impact the success of the company. 

    Leadership Skills 

    Business Leadership Today states that there are seven traits a great leader exhibits. These skills help them inspire, empower, and influence others. 

    • Relationship Building

    Great leaders need strong relationship building skills to forge strong relations with stakeholders, management, and their employees. They need to invest their time in creating trust and building authentic bonds that will lead to long-term success. You are also more likely to be respected as a leader when you have strong relationships with your people. According to a meta study by Gallup, positive relationships increase employee engagement and productivity

    • Critical Thinking

    A leader often has to make difficult decisions, often under a lot of stress and pressure. A lot of times there is no clear cut answer to these decisions. Therefore, leaders need to be strategic – they need to conduct their research, anticipate challenges and potential outcomes, and use their past experience to come to a logical decision. Critical thinking involves both analytical and creative skills. 

    Leaders need to be logical, rational, and analytical. Critical thinking can be developed by asking more questions, challenging the status-quo, exploring different perspectives, and correctly framing the problem. 

    • Innovation and Creativity

    Innovation is a key leadership skill because nothing remains the same. In order to stand-out and stay ahead of the curve, one needs to innovate. Take a look at Nokia. Nokia was content with its mobile phone designs - they didn’t introduce new capabilities or features. Their struggle or failure to innovate cost them market share and led the company to its downfall. Steve Jobs took advantage of this and changed the game when it came to smartphones. 

    Consumers are also expecting consistent innovation and creativity. This demand is a driving force for leaders and can be the deciding factor between their success and failure. 

    • Adaptability 

    A 2022 study by Development Dimensions International stated that the most important leadership quality is adaptability. However, adaptability is acquired by having the right mindset and foundational skill-set of leadership, which is decisiveness, empathy, and self-awareness. 

    We know that the business world can change in the blink of an eye. Covid-19 is a recent example of how the world changed within a few days. Effective leaders need to be able to recognize the internal or external changes and then adapt to them. They also need to have a plan on how they will communicate and manage the change. 

    • Conflict and Change Management 

    Conflicts are inevitable, both in life and in the workplace. However, how a leader manages the conflict can significantly impact the results. Good conflict management fosters a positive and productive work culture. Leaders need to be able to identify and mitigate conflicts before they escalate or derail the vision. Good conflict management creates an environment where people can clearly voice their opinions and this open communication leads to more innovation and creativity. 

    Also, today’s organizational landscape is dynamic and constantly evolving due to internal and external factors. Leaders who understand and implement effective change management practices can guide their teams through transitions smoothly and productively. They can prevent conflict and resistance while maintaining morale. This will ensure success in the new environment.

    • Employee Motivation 

    The definition of a leader is someone who is able to influence and motivate others to work towards a vision. That is why driving employee motivation is an essential leadership skill. Motivation can drive long-term success because employees feel they are connected to a purpose, know their why, are satisfied with their jobs, and are engaged at work. 

    • Negotiation 

    Negotiation isn't just about getting what you want; it's also about building trust and relationships with the people you're negotiating with. When leaders are able to negotiate in a fair and respectful way, they can build strong relationships with others that can benefit the organization in the long run. Negotiation skills also help them resolve conflicts. 

    To be a good negotiator, one must 

    • Do their research
    • Be a good listener
    • Know your goals
    • Be patient and persistent 
    • Be willing to compromise 

    Management Skills

    These are 4 top management skills one must have. 

    1) Delegation Skills 

    A manager can’t do everything on their own. Therefore, he must be able to effectively delegate tasks to others. They need to know all the resources at their disposal, their strengths and weaknesses, and offload work accordingly.

    2) Technical Skills

    Managers might have stepped away from the day-to-day technical stuff, but they need to have a sound technical knowledge so they can help resolve an issue when required. Sound technical knowledge helps the manager make more informed decisions. It helps them thoroughly trouble-shoot problems.

    The level of technical skills required in a management position also comes down to the industry, company culture, and level of management. For instance a valve manufacturer might require that all departmental managers be engineers. In another company set-up, lower level managers might be involved in more day-to-day technical work, so they need a sound knowledge to perform their job.

    3) Organizational Skills

    Managers are all about getting things done and coming up with a plan to get the project accomplished. So it’s essential that they have strong organizational skills. Organizational skills are all about knowing which resources are there, scheduling work schedules, managing the budget, prioritizing tasks, and ensuring all supplies are in stock, etc.

    Organizational skills can be developed through practice. Here are a few tools that can help managers build their competence:

    • Time Management: Make use of scheduling tools like calendars and to-do lists to effectively allocate time, prioritize tasks, and set deadlines. Consider using time management apps like Trello, Toggl, and Clockify to keep yourself on track.
    • Workspace Management: Keep your physical and digital workspaces clean and organized. Create a folder system for documents, emails, and notes to avoid clutter and facilitate easy retrieval.
    • Information Management: Develop systems for capturing and storing information efficiently, such as using note-taking apps or mind maps. Regularly review and update information to ensure its accuracy and relevance.

    4) Attention to Detail

    As managers are executors, they need to pay great attention to detail. This skill is necessary for them to be able to reduce risks and stop projects from going over-budget. Managers need to be able to anticipate outcomes, issues, or flaws so they can have backups in place. 

    top management skills one must have

    Leadership and Management — Two Sides of the Same Coin 

    Even though leadership and management are fundamentally different, they do have overlaps and they are two sides of the same coin. When leadership and management work together effectively, it creates a powerful synergy that drives organizational success. Here's how they can complement each other:

    Leadership sets the direction, while management ensures execution:

    • Leadership envisions the future, defines the organization's mission and values, and inspires others to follow. They inspire, set direction, and create an empowering work environment.
    • Management, on the flip side, takes the leader's vision and gets the ball rolling. They plan, organize, implement processes and timelines, and control activities. All of this is done to ensure efficient resource allocation and task completion. 

    Leadership fosters innovation, while management drives efficiency:

    • Leadership encourages creativity, risk-taking, and thinking outside the box. As mentioned earlier, leaders are rule breakers and aren’t afraid of challenging the status quo. They constantly ask, “How can we do this better?” 
    • Management focuses on optimizing systems, processes, and procedures for maximum consistency and productivity. They are focused on the smooth day-to-day operations and want to reduce errors.

    Leadership builds relationships, while management creates structure:

    • Leadership cultivates trust, collaboration, and a sense of belonging within the team. They communicate effectively, actively listen, and value individual contributions.
    • Managers' responsibilities are to establish clear roles, responsibilities, and reporting lines that will help build these relationships. They will implement policies and procedures that will ensure everyone feels valued, comfortable, and accountable. 

    How to Effectively Combine Leadership and Management 

    When leaders and managers are in sync, the organization sets itself up for sustainable success. However, how to ensure that leaders and managers are communicating, respecting each other, and working towards a shared goal? Here are alternate ways to ensure effective collaboration between the two:

    • Regular communication: Frequent meetings, open dialogue, and transparent information sharing are crucial.
    • Shared goals and values: Both leaders and managers should be aligned with the organization's vision and mission.
    • Mutual respect and trust: A collaborative environment built on trust and respect allows both parties to contribute their best.
    • Clear roles and responsibilities: Defining each party's responsibilities avoids confusion and duplication of effort.
    • Feedback and continuous improvement: Encouraging open feedback and a culture of continuous improvement allows both leadership and management to adapt and grow.

    Leadership and management should not be in competition with each other; they should be complementary. Harmony between leadership and management creates a dynamic and successful organization where everyone thrives and works towards a singular goal. 

    Finding the perfect balance between leadership and management is hard. There is no fixed formula and you constantly have to evaluate the balance between the two. eRS, a resource management software is one tool that can help you whether you are a manager or leader. The data on productivity and resource utilization can help managers improve how work is assigned and tracked. Leaders can look at capacity plans and financial data to make strategic plans and adjustments. 

    So why not find the perfect combo of leadership and management for your company and power it with eRS? Talk to our team today.

    Maximize resource utilization now

    One place to schedule, plan and track all your resources