Leadership and Management explained: How their differences create strength

Are Leadership and Management the same?

The simple answer is no—leadership and management are different, yet both are crucial to a business's success. But what exactly sets them apart, and why are both important?

What is leadership?

Leadership is the process of influencing and guiding an organization or group members to achieve common goals. A leader is someone with a vision, who encourages and inspires others.

Here are some defining traits of leadership:

• Vision: Leaders focus on long-term goals and can communicate this direction to others clearly.
• Inspiration: Leaders motivate and encourage their teams to work with enthusiasm and energy.
• Innovation: Leaders welcome new ideas and changes to improve and grow.
• Influence: Leaders rely on their ability to inspire rather than just their authority.

What is management?

Management is the process of planning, organizing, coordinating, and controlling resources (human, financial, material) to achieve the specific objectives of an organization. A manager oversees the daily operations of the organization.

Key characteristics of management include:

• Planning: Managers set clear, achievable goals and create steps to reach them.
• Organizing: Managers assign tasks and arrange resources to meet objectives.
• Coordinating: Managers keep activities aligned and make sure they proceed smoothly.
• Controlling: Managers monitor and adjust operations to ensure goals are achieved.

How leadership and management work together

Leadership and management may be different, but they are complementary. Leaders provide the big picture and motivation, while managers handle the details that bring that vision to life. Sometimes, one person may need to perform both roles,

A successful organization typically needs both roles and sometimes, one person can fulfill both roles, but the skill sets required for each can be quite distinct. The challenge lies in how to balance and combine leadership and management to run a business efficiently.

The key difference in purpose: Management for stability, Leadership for change

Management is primarily about handling problems.

Management rules and methods were largely developed to address the disorder and chaos that could arise in large organizations during the 20th century. Good management can create order and consistency in terms of staffing, production, and revenue growth.

Leadership, on the other hand, is about navigating change.

As business environments change quickly and competition grows, leadership becomes more important. Companies can't stay the same in a world where technology is always advancing, resources are limited, and skilled workers have more job choices. Leaders must guide their companies in new directions to keep them successful.

This difference is like comparing peacetime and wartime in the military. In peacetime, only top leaders are essential, while good management and organization can handle most situations. But in wartime, leadership is needed at every level because simply "managing soldiers" isn't enough to win battles on the front lines.

The three main functions: How leaders and managers work differently

Both leaders and managers are responsible for three core tasks: setting goals, building teams, and ensuring team performance. But they approach these tasks in distinct ways, while each role enhancing the other.

Setting direction vs. Planning

Planning (a management task) focuses on laying out steps to reach specific goals in an orderly way. Managers create detailed plans that define how to accomplish tasks, often on a monthly, quarterly, or yearly basis.

Setting Direction (a leadership task) is about defining a vision and strategies for long-term success. 

A vision and strategy don't necessarily need to be groundbreaking or on a grand scale. Many effective business visions are based on widely known ideas, with a few new elements in content or approach.

For example, when CEO Jan Carlzon envisioned transforming Scandinavian Airlines (SAS) into the world's best airline for business travelers, his vision wasn’t entirely new to anyone in the airline industry. Business travelers were willing to pay premium prices for frequent flights. However, in an industry known for its bureaucracy, no company had ever committed to this idea. SAS became the first to do so, and they succeeded.

One great advantage of having a clear vision and strategy is that they actually support short-term planning. Without them, businesses would need to create plans for every possible scenario, leading to endless contingency plans. This would leave no time or energy for practical action.

Thus, a stable planning process becomes a useful tool to monitor the direction, while a solid vision and strategy provide focus, ensuring that plans stay grounded in reality and can be executed effectively.

Aligning people vs. Organizing personnel

Organizing (a management role) involves structuring teams, assigning roles, and creating an efficient work process. Managers ensure that the team structure supports the company’s objectives.

Aligning People is a leadership role focused on building support for the vision. Leaders align everyone across departments, ensuring that each person understands the vision and feels motivated to contribute.

The story of Chuck Trowbridge and the photocopy company Eastman Kodak is a prime example of the effectiveness of aligning people in leadership. When Chuck took over as general manager, the company was struggling, and the employees couldn’t agree on how to resolve the issues.

After presenting a clear and simple vision, Chuck dedicated significant time and effort to meeting with key personnel and used various methods to communicate his message to all 1,500 employees, with management organizing tasks to keep everyone on track. As the message gained more support, the company experienced rapid growth.

Motivating vs. Controlling

Controlling (a management function) ensures that tasks are completed as planned by monitoring performance, using reports, and making adjustments as needed. This keeps daily operations efficient and predictable.

Motivating (a leadership function) is about energizing people to reach beyond ordinary performance. Leaders tap into people’s personal goals and values, helping them stay engaged and enthusiastic even in challenging times.

Take the example of Richard Nicolosi and the success of Procter & Gamble’s (P&G) paper products division. When Nicolosi became general manager, he immediately set a new direction focused on teamwork and diverse leadership roles. Following the organizational vision that "each of us is a leader," he and his team established various "councils" and small "product teams" within the division. This empowered employees at all levels to be more creative and motivated, allowing even the lowest-ranking employees to contribute to the company’s success.

Leadership vs. Management: Which should a business prioritize?

The truth is, few people excel in both leadership and management. Some are more effective at setting visions and inspiring people, while others are skilled at planning and organizing. Smart businesses recognize this and build teams that include both strong leaders and effective managers.

The choice to emphasize one or the other depends on the company’s needs at the time. During rapid changes, leadership may be prioritized to help the company navigate new challenges. During stable times, management might take the lead to maintain consistency and order.

A business can choose to focus on one approach or find a balance between leadership and management, depending on the circumstances.