Leadership vs. Management

The terms ‘Leadership’ and ‘Management’, and the distinctions between them, have been subject to a bit of controversy for a long time. Many have wondered about the differences and whether or not they are mutually exclusive. 

Although the common assumption is that everyone in a management position is a leader, not all of them exercise leadership. While organizations usually task their managers with the authority to lead, there is no guarantee that they can do so effectively. Leadership involves providing direction to an organization and motivating people towards achieving a common goal, while management focuses more on controlling things and people to get the work done.

The current workplace setting is dynamic and calls for leaders to brave the status quo, instill inspiration, and influence throughout the organization. Strong leadership and strong management are essential for the optimal effectiveness of organizations. In fact, the best managers are also leaders. Therefore, managers need to take the time to harness their leadership skills in order to be most effective. 

What Do Managers Do?

Managers are responsible for carrying out the primary functions of management which include, planning, organizing, leading and controlling. Most managers also tend to be leaders, but only if they also effectively carry out the leadership responsibilities of management, which include communication, motivation, providing inspiration and guidance, and encouraging employees to perform at their highest level. 

As you may have guessed, not all managers are true leaders. Many managers have poor leadership qualities and employees follow orders from them solely because they are obligated to do so- not because they are influenced or inspired by them. In addition, these managers often have a hard time influencing or affecting change with anyone who doesn’t directly report to them. 

Important traits for managers include:

  1. The ability to execute a Vision
  2. The ability to Direct
  3. Process Management
  4. People Focused

What Do Leaders Do?

The key differentiating factor between management and leadership is that leaders don’t necessarily hold a formal management position. In other words, a leader doesn’t have to be an authority figure in the organization to lead effectively. A leader can be anyone.

Unlike managers, people generally follow leaders because of their credibility, behavior, and beliefs. James Kouzes and Barry Posner discuss the five practices of exemplary leadership in their highly acclaimed book, “The Leadership Challenge.” They espouse that the greatest leaders in the history of the world did these five things very well.

  1. Model the Way
  2. Inspire a Shared Vision
  3. Challenge the Status Quo
  4. Enable Others
  5. Encourage the Heart 

It is important to remember that just because someone is an exceptional leader, it does not necessarily guarantee that the person will be an outstanding manager, and vice versa. 

Some of the key differentiators are highlighted below:

  1. A leader invents or innovates while a manager organizes and executes
  2. A manager relies on control, whereas a leader inspires trust
  3. A leader asks the questions “what” and “why”, whereas a manager leans more towards the questions “how” and “when”

In 2007, Warren Bennis famously said,“Managers do things right, while leaders do the right things.” 

Vineet Nayar, the author of ‘Employees First, Customers Second’ devised three tests that a manager in the process of transitioning to a leader can consider.

Differences between Managers and Leaders

1. Counting Value vs. Creating Value

The priority of managers is to quantify or measure value. Tracking of results is their obsession as they seek to report on specific targets. A manager is not inherently wrong for such behavior. Furthermore, the ability to ascertain volume, costs, revenue, profit, and other things are crucial to being a good manager.

However, managers who focus too much on counting value can fail to see the bigger picture, which can be detrimental to an organization in the long run. Such managers tend to sacrifice the long term gains in order to achieve short term goals. For example, laying off the entire production team because of one bad quarter. 

On the other hand, leaders prioritize creating value. Although they still recognize that measuring performance is essential, it is only a basic practice for them. Real leaders create value through continuous thinking of how they can grow the top line or lower the cost structure. 

For instance, they may implement creative strategies and while, taking calculated risks may escalate short-term costs, these strategies can reap tremendous benefits in the long run. The challenge facing leaders is how to convince an organization to endure short-run risks and manage expectations for the long-term strategy to pay off.

2. Leading People vs. Managing Work

While leadership entails getting people to understand and believe in the company’s vision and working with you to achieve these goals, management is more about controlling a group in order to accomplish a specific goal and ensure the daily activities occur as they should. Leadership is the ability of an individual to motivate, influence, and enable other employees to make a contribution to the success of an organization. For a manager to be most effective, they have to be able to manage the workload, budget, schedule, product, inventory, etc. while leading their people. This is where we often see Managers trip up. When managers try to manage both their work and their people they don’t see as much productivity, engagement and commitment. You manage things but you lead people.

3. Circles of Influence vs. Circles of Power

The characteristic that draws a contrasting line between management and leadership is that managers have subordinates who work for them and leaders gain followers. This implies that managers create a circle of power while leaders create a circle of influence which are vastly different concepts. Nayar offers advice on how to identify which circle you have around you. He says, “The quickest way to figure out which of the two you’re doing is to count the number of people outside your reporting hierarchy who come to you for advice. The more that do, the more likely it is that you are perceived to be a leader.” 

Managers hold an authoritative position and have subordinates who work for them. Managers often leverage a transactional leadership style where the manager directs the subordinates on what to do and the subordinate obeys in order to receive their extrinsic reward (i.e. paycheck). 

Conversely, Leaders create a circle of influence through a transformational leadership style. They cast a vision, demonstrate honesty and integrity, inspire others, challenge the status quo and demonstrate to their followers that they will help them accomplish their shared goals. Their followers not only get extrinsic rewards but also, in a way, become better people. Leaders differ from managers, not because of power and control, but influence and inspiration.

Final Thoughts

Although management and leadership differ, they are both important and necessary in organizations. Even in the case of a small business, a successful owner must be both a good manager responsible for planning, organizing, and controlling as well as a good leader who communicates, motivates, inspires, and encourages employees to reach their highest potential. We like to call it effective management with a leadership mindset. 

Are you looking for ways to improve your leadership skills? Check out our online “Leadership is a Verb” Bootcamp! The next program is starting soon!

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