Leadership is crucial for business. Leadership is a starting point of strategy. It’s the magic elixir for achieving sustainable growth and value creation. Leadership is at the heart of engaged employees, innovation and vibrant cultures. It is what makes organizations thrive and prosper. Yet for all its importance, leadership is widely misunderstood because many people consider leadership and management to be the same. This confusion is evident as these two terms are routinely used as if they were interchangeable.
While they are both very important for a business, they are not the same. Management and leadership are different, though both are important. Most businesses will not be successful over time without the contributions of both management and leadership. But make no mistake, they are different.
The common misconception is that leadership and management are the same. Let’s look at three examples of this confusion and misconception:
- Leadership is determined by position, e.g., this person is a senior executive so therefore he/she must be a leader. Since leaders are at the top of the organization, the meaning of being a leader is seen as doing whatever senior executives do.
- Leadership only comes from people in management positions. In this case the term management positions include supervisors and mid-managers as well as executives. In reality, many of the best leaders in an organization are not in management positions.
- Leadership is a title. The use of the word leadership in titles for positions and teams has proliferated. Examples of position titles are sales leader and manufacturing leader. Examples of teams using the word leadership are “Executive Leadership Team”, “Regional Leadership Team” and “Plant Leadership Team.” In each of these cases the expectations of this team is heavily focused on management, not leadership.
Evidence of the Confusion Can Be Found in Conversations
Evidence for the confusion in the differences between leadership and management is widespread and easy to find. Try this little experiment. Ask people in the organization three questions:
Question #1: "Are management and leadership the same?"
Chances are high that you will get one of two responses to this question:
- Yes, management and leadership are the same. “Its two words we use to describe upper levels of management”, is a common response.
- “No, they are not the same”. If you ask for further explanation of the differences, the answers you hear will be muddled and unconvincing. It is likely that somewhere along the way this person has heard a discussion about the differences in management and leadership, but has not integrated the essence into their thinking.
Question #2: "Who are the leaders in your organization?"
The person answering this question will likely point toward incumbents in higher level management positions within that part of the organization. There is a common misperception that senior managers are leaders while those in middle management and supervisors are not.
Question #3: "Given who you identified as leaders in your organization, please describe what makes them a leader?"
The person will describe what makes them “leaders” by discussing their management roles and / or the level of their management position. Seldom is there an appreciation that a leader’s role is to make things happen that otherwise would not have happened. That is, leaders interrupt the status quo and redirect the business to a future which is much more compelling.
These questions also help to provide a line of thinking and reasoning for organizations to determine their thoughts on leadership and management. The answers received also provide feedback about the organization. As an example, it’s a good sign if:
- Those in the organization articulated that management and leadership are different AND both are important to the business.
- People were identified as leaders who are not in management positions.
Other less positive feedback about the organization would be if the responses were:
- We don’t have any leaders in this organization.
- We only have managers, as I am not sure our organization would tolerate actual “leaders”.
While these statements are seldom accurate, they are reflective of the negative views of leadership in the organization. Put another way, it's an example of “I know leadership when I see it, and I’m not seeing it”.
Differences in Management & Leadership
Given the confusion in how the two terms management and leadership are used, one might think it is a new conversation. That is, a recent set of conversations which has not yet reached executive and management ranks. Hardly. This conversation burst to the forefront of business management thinking in 1977 when Abraham Zaleznik published his classic article, Managers and Leaders: Are They Different? In this article, Zaleznik left little doubt that the two roles are quite different. This article was republished as part of the Best of HBR series in 2004 by Harvard Business Review. In the introduction to this classic article, the HBR editors wrote:
The traditional view of management, back in 1977 when Abraham Zaleznik wrote this article, centered on organizational structure and processes. Managerial development at the time focused exclusively on building competence, control, and the appropriate balance of power. That view, Zaleznik argued, omitted the essential leadership elements of inspiration, vision, and human passion—which drive corporate success.
Notice that inspiration was considered a key driver of corporate success in 1977. We are clearly not dealing with a new concept. The introduction goes on to say:
The difference between managers and leaders, he wrote, lies in the conceptions they hold, deep in their psyches, of chaos and order. Managers embrace process, seek stability and control, and instinctively try to resolve problems quickly—sometimes before they fully understand a problem’s significance. Leaders, in contrast, tolerate chaos and lack of structure and are willing to delay closure in order to understand the issues more fully.
Zaleznik makes clear that in his mind managers and leaders are quite different. He points out that the differences are fundamental in both their personalities and temperament. He highlights the differences in dealing with chaos and lack of order. Managers are prone to want to quickly reduce chaos and move to an answer. Leaders on the other hand appreciate the need for chaos and prefer to dwell in the chaos in order to understand it, rather than rushing to cut it off. Employees often live in the chaos. Consequently, they appreciate leaders who do not pretend it does not exist and rush to a premature conclusion in order to reduce the discomfort brought on by “disorder and not knowing”. Conversely, managers often appear to employees as being “out of touch” and “living in make believe world” given their rush to judgement. The irony of course is that managers pride themselves in being grounded in reality and accuse leaders of being out of touch and living in make believe world, when in fact, it is them who wear those labels.
Zaleznik drives the final nail in the differences by asserting that:
…business leaders have much more in common with artists, scientists, and other creative thinkers than they do with managers. Organizations need both managers and leaders to succeed, but developing both requires a reduced focus on logic and strategic exercises in favor of an environment where creativity and imagination are permitted to flourish.
As you can see from this introduction, Zaleznik launched a full-frontal attack on the notion that management and leadership were the same. To get the sense of impact it made, consider the description from the editors of HBR.
Zaleznik’s article “caused an uproar in business schools. It argued that the theoreticians of scientific management, with their organizational diagrams and time-and-motion studies, were missing half the picture—the half filled with inspiration, vision, and the full spectrum of human drives and desires. The study of leadership hasn’t been the same since”.
In 1985, Warren Bennis and Bert Nanus added weight to this conversation when they stated that management typically consists of a series of contractual exchanges. They add “leadership stands in the same relationship to empowerment that management does to compliance”. They summarized their views with the classic phrase:
Managers do things right
Leaders do the right things
John Kotter is one of the best known thinkers and writers on management, organizational change and transformation. He has had an illustrious career as professor at Harvard Business School and co-founder of a consulting firm which bears his name. In 1990, Kotter added fuel to the fire with his classic HBR article What Leaders Really Do. The opening narrative is:
Leadership is different from management, but not for the reasons most people think. Leadership isn’t mystical and mysterious. It has nothing to do with having “charisma” or other exotic personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than management or a replacement for it. Rather, leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment. Most U.S. corporations today are over-managed and under-led.
Over-Managed & Under-Led
In the quote in the previous paragraph, John Kotter asserted that North American organizations are over-managed and under-led. To be sure, Kotter was not being critical of the amazing skills of management, but instead was pointing to the lack of balance between leadership and management. Let’s look at how Kotter describes management and leadership:
Management is about coping with complexity. Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations. Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Good management brings a degree of order and consistency to key dimensions like the quality and profitability of products.
Leadership, by contrast, is about coping with change. Part of the reason it has become so important in recent years is that the business world has become more competitive and more volatile. Faster technological change, greater international competition, the deregulation of markets, overcapacity in capital-intensive industries, an unstable oil cartel, raiders with junk bonds, and the changing demographics of the work-force are among the many factors that have contributed to this shift. The net result is that doing what was done yesterday, or doing it 5% better, is no longer a formula for success. Major changes are more and more necessary to survive and compete effectively in this new environment. More change always demands more leadership.
In modern business it is clear that for influential business thinkers, management and leadership are different. Both are important, but are also quite different.
Given the magnitude of this risk of being over-managed and under-led, one would think that this would be taken very seriously. Sadly, it is not and is frequently overlooked.
Consider the example of the experience of an energy company which was reacting to a major environmental event. This event was triggered by employees’ behaviors caused by cognitive biases in interpreting data. This company was in full press recovery mode and had a team redesigning their corporate risk profile and programs. The group talked about many potential physical risks. Some seemed real and threatening. Others were more obscure and seemingly unlikely. However, the single biggest cause of the event was never addressed; the people element. Further, the overbearing on management on their people during the critical moments appeared to contribute to the problem. The biggest positive influence that could have occurred was if the company would have stood up and pointed out the organizational culture and the stifling level of being over-managed and under-led. Of course, this did not happen, with the predictable consequences.
Tangible Evidence of Leadership vs. Management
Vineet Nayar offers three tests to understand the differences in leadership vs. management:
Test #1: Counting Value vs. Creating Value
The first question is, are you counting value or creating value? Nayar asserts that leaders create value while managers count it. Leaders give clear guidance on how an employee can add value and then takes additional actions to add that value. This allows the leader to generate value above and beyond what team can achieve. Also, leaders set an example and assures people are in action. Nayar asserts that managers only count value at best and can reduce value by micromanaging those who are potentially creating value at worst.
Test #2: Circles of Influence vs. Circles of Power
Leaders have followers while managers have subordinates. Managers create circles of power while leaders create circles of influence. Nayar points out that the quickest way to assess which role you are playing is to ask, “How many people outside of my formal authority and reporting hierarchy come to me for advice?” Nayar asserts that the larger the number who come from outside, the more likely that you are perceived as being a leader.
Test #3: Leading People vs. Managing Work
Management is designed to control a group of people or entities to accomplish a specific goal. Leadership is the influencing, motivating and enabling others to contribute toward organizational success. Nayar writes “Influence and inspiration separate leaders from managers, not power and control.”
“Management Team” or “Leadership Team”?
Perhaps the confusion between management and leadership is most evident in the practice of renaming management teams as leadership teams. After observing the roles expected of the so-called leadership team, typically one would find that the actual purpose of the group is to manage. There is little, if any, intent to provide leadership nor is there any action which reflects leadership. As a consequence, many of these so called “leaders” aren’t leaders at all. They are managers. They have no interest in being leaders and offer little capability to lead. They are often capable managers, but not leaders.
Risks of Confusing Leadership & Management
The risks of confusing leadership and management are only as great as the risk of not identifying and adapting to challenges with customers and threats in the external environment. For most organizations that risk is huge. Yet in spite of this risk, management in these organizations is focused on maintaining the current approaches. Keeping the same approaches means that the trajectory of the business will remain the same. Of course, these managers look for ways to tweak the organization in order to increase the velocity. However, tweaking business approaches in the face of the need for large scale change is not likely to achieve the desired results. This tweaking could mean hurling the organization continuously faster toward a cliff or at least in the wrong direction. Leadership, in contrast, sees the oncoming challenges and enables those in the organization to explore other possibilities. This intense effort continues until a viable opportunity is determined.
Management Is Critically Important
In some organizations there is the belief that leadership is better and more important than management. This belief fails to appreciate the enormous contributions made by management to the modern business organization. We take global corporations for granted. We overlook that the sheer concept of a global corporation would not be possible were it not for the amazing advancements in management.
My grandfather worked on railroads as a conductor in the caboose. His view of the world was shaped by the view from the back of the train. His world experience was essentially one day’s train ride from Memphis, TN. If as a boy I tried to tell him about the emergence of the internet and new technologies, or how corporations would be able to effectively serve customers around the world … he would have thought me crazy. His response would have been akin to “Boy, you’ve been out in the sun for too long…”. Yet those remarkable accomplishments are possible due to advances in management practices. Of course, leadership was blended in to enable some of those advancements in what we today see as management practices.
The evidence for leadership being better than management can be found with an internet search. A Google search entered as “Are management and leadership the same?”, there are many sites which infer that leadership is better than management. This is inaccurate and unfortunate. Management is very much needed. The capabilities of companies to manage complex business on a global scale is truly amazing. This incredible capability is often taken for granted. It was not that long ago when managing a business with more than one location was thought difficult, if not impossible.
Reflect on this final analogy for the amazing contributions of management.
The American comedian Louis CK talks about how the general populous takes the amazing technology around them for granted. He gives example of being on an airplane when the person sitting next to him turns to complain about the speed of Wi-Fi on an airplane. Louis CK says we have no appreciation of the miracle of flying on airplane. He says “You are sitting in a chair in the sky!!!” Louis CK points out that rather than being in awe of this experience, people take it for granted and somehow assume that it is “their right”. He says the evidence for this is how frequently people come back from a flight with complaints about the slightest alteration in expectations and inconveniences.
This is a wonderful analogy for how people experience management. The advances in management capabilities are truly amazing. The importance of management must be acknowledged while at the same time recognizing that leadership is a different capability. Both are essential for business success!
Management and leadership are both very important. Yet they are different. To reiterate, management and leadership are NOT the same. Some individuals are capable of being effective both as a manager and a leader. Many are not.
Leadership is not given by the level of a person’s position in the organization. Being in an executive, management or supervisory position does NOT infer that one is a leader. Not being in a management or supervisory position does not mean that a person is not a leader. Some of the most inspiring leaders in an organization are not in management positions. These non-managerial employees bring heart to the organization and reinforce the culture.
Leadership and management are both important but are distinct capabilities. Many companies have well developed management capabilities and processes. Yet these came companies often do not have such well-developed leadership capabilities and processes. This shortage shows up when facing the need for growth and change.
Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story.
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