The words management and leadership are often used interchangeably in everyday conversations, and in publications.

For example, in the business section of a newspaper it was quoted that:  “the management of this company has turned a potential lackluster operation into a sure winner.  With a new management style, clear vision, outstanding service delivery, increased efficiencies, cost reductions and increased cash flow, the company’s goals are well on the way to being achieved”.

In the same newspaper, on the next page, I read the following: “the leadership of … [Company XYZ] has transformed the organization from a mediocre performer, to that of a rising star.

In the first quotation, it was said that the management of the company turned the company around. In the second, it was leadership that transformed the organization.  What’s the difference?

As a consultant, I often hear people say that, in today’s business environment, management must give way to leadership.  The former is outdated, the latter is the way to go.  Yet when I ask: “what is meant by leadership?” I receive a variety of very diverse, and sometimes very confusing, responses.

For instance, I once heard a well-known author tell his audience: “leadership is defined as the ability to get results through people, whereas management is process oriented”.  He continued by saying that we lead people, but manage processes, such as policies, procedures etc.  By his definition, even company directors were not leaders if they focused on fulfilling functions such as finance, strategy and the like.

I wondered how the dictionary differentiates between management and leadership, so I looked up the two terms.  My dictionary defines management as: “the judicious use of means to accomplish goals through human and other resources”.  I then looked up the word leadership. What I found was, “to guide someone or something along the way for achieving results”. What’s the difference?

The confusion between management and leadership is only exacerbated when we study the literature on the subject.  Over an eight-month period I read more than two hundred articles and papers on management and leadership to see if I could find common denominators that differentiated the two. I found very few in the articles I read.  It seems that there is no consistent understanding of how management and leadership differ from one another.

Even the word leadership is used in very diverse ways.  For example Paul Hersey and Kenneth Blanchard have written a best selling book entitled “Situational Leadership”.  In this book they say that leadership is “the interplay of guidance and direction a manager provides”.  They go on to say that managers must adapt their behaviours to situations.  “Managerial success is based on being able to adapt ones style to different work settings”.  The way this is done is to move between “telling”, “selling”, “participating” and “delegating” depending on the situation and circumstances.

In another popular work, Bernard Bass has promoted the idea of “Transformational Leadership”. At the heart of TL are four leadership traits, namely: Charisma, Inspirational Leadership, Individualized Consideration and Intellectual Stimulation. These are the bahaviours that, according to Bass, are characteristic of Transformational Leaders.

However, Bass says that Transformational Leadership must be built on a process called Transactional Leadership, the latter being another name for the traditional management practices of planning, organizing, controlling, etc.  Notice, however that Transactional and Transformational are both linked to the word “Leadership”.

It’s interesting to note that, in years gone by, almost everybody knew what managing was all about.  As I have already said, today there is little consensus as to what leading is. I think part of the problem is that many so-called gurus have jumped on the band-wagon and tried to create their own brand of leadership.  Here are some of the titles of books on leadership that I have in front of me: Principle Centered Leadership, Servant Leadership, Situational Leadership, Transformational Leadership, Primal Leadership, Strategic Leadership, People-based Leadership, New Age Leadership, Value-based Leadership, Heroic Leadership, Visionary Leadership, etc.

And it’s not just the titles.  Delve into these books and you’ll find that that most espouse very different practices.

In spite of the confusion that exists, I believe that there is a very clear and distinct difference between management and leadership.  But it has nothing to do with semantics, or separating people and processes.  Both involve making decisions, achieving objectives, motivating staff and working through people to achieve specified outcomes

The difference between managers and leaders is that they operate in different time frames. Management is about achieving relatively short-term objectives, between a month and two years.  Leadership concerns itself with the direction of the company and the attainment of long-term strategic objectives, typically three to five years ahead.  Management asks the question, “What now?” and takes immediate action.  Leadership asks the questions, “What if?” and formulates strategy.

Management is about achieving and maintaining standards in key areas such as quality, productivity and profitability.  Leadership is more concerned with movement and adaptive change, e.g. new or different services and products that need to be introduced to stay ahead of the competition, or the type of organization structure that will be more efficient in the future.

Having established that the manager’s focus is on short-term results, and a leader’s orientation is towards the future, we now need to examine the activities that differentiate one from the other.

The work of a manager

What we call management has evolved over the last hundred years or so in response to the need for more and better products.  Modern management evolved to bring products and services to the people in the street at a price they could afford.

With the invention of the steam engine, the automobile, the telephone, radio and countless other creations, came the need for organized business.  There was a market for these new products, and they needed to be mass-produced.

Mass production meant that hundreds of workers were employed in the production and distribution of goods, and the provision of services. This necessitated the implementation of procedures and systems.  Without management, organizations would not possess the means to organize and control, causing inconsistencies of quality and supply. Without management organizations would become chaotic, with everybody serving their vested interests. To prevent this untenable situation, the principles and practices of modern management came into being; principles designed to enable staff to work together in a cohesive, focussed and organized manner.

Summarized briefly, the work of a manager embraces the following:

• Operational planning and budgeting. This activity involves the setting of objectives that need to be achieved in the forthcoming year. Action plans are developed to map out the method of attainment, and due dates established. Thereafter budgets are set with clear income and expenditure targets.
• Selecting and developing people. Under this heading a manager recruits and appoints staff, communicates job requirements, delegates responsibilities, and empowers people to perform at the required level.
• Managing performance. After people know what is expected of them, their performance must be monitored, appraised and, where necessary, corrected.  This activity was previously known as controlling.
• Problem solving. Whether we like it or not, problems are an integral part of corporate life and they will come from any number of sources including suppliers, customers, staff, competitors etc.  One of the key activities of a manager is to deal with problems in order to achieve business objectives.

Remember that the activities of management are designed to ensure the attainment of short-term goals through people.  Managers who carry out the above activities in an efficient and effective manner will inevitably be successful.  Those who are ignorant of, or deficient in, the stated practices will never produce the full measure of outcomes that are possible only by applying proven management practices.

The work of a leader

Unlike a manager, a leader looks to the future.  This makes things a lot more difficult. While the future is laden with possibilities, it is also bedeviled with threats.

The leader needs to have a very clear idea about where the company is going, familiarize himself or herself with local and international trends in order to anticipate requirements, be proactive in introducing change, and take calculated risks to grow the business.

A leader also is required to build a distinct corporate culture, so that people know exactly what the company stands for.

To meet these requirements, a leader engages in five core activities:

• Creating a Vision and formulating Strategy. A Vision is a clearly articulated picture of where the company, department or division will be, and what it will look like, in 5-10 years time.  A Vision is supported by a documented, overall strategy that outlines the method or plan of achievement.

• Developing a Corporate Culture. The Corporate Culture of a company is its personality.  It reflects the very nature of the organization, including what the business stands for and how it is to be perceived by its stakeholders.  If no specific culture is created, the organization will acquire one by default arising from the actions, experiences and perceptions of staff and stakeholders.

In addition to an overall Corporate Culture, it is also essential that divisions and departments have their own supportive cultures. The reason is that each section of the company has a distinct and separate function, and therefore personality.  The Credit Control Department, for example, will usually be a much more conservative part of the organization than the Sales Department. Because they both perform very different functions, they will have separate characters.  Each should, however, be aligned with the overall culture of the organization as a whole.

• Transforming the organization. Nothing stands still. Companies are either progressing or deteriorating. To remain competitive, relevant and growing, organizations must be in a state of continuous transformation.  Leaders understand this and minimize the disruption of reactive change by constantly improving the products, services and delivery systems of the organization, in a planned and structured manner.

• Making Strategic Decisions. One of the crucial differences between a successful and an unsuccessful leader is found in the quality of decisions taken. After all is said and done, great leaders make good decisions, poor leaders make bad decisions.  The interesting thing about decision-making is that we only know whether a decision is good or bad with hindsight. That is why most great leaders involve others whenever strategic decisions need to be made.  By so doing great leaders harness the power of synergy, the mind-power of many people who explore issues from different angles and come up with the best possible alternative from a number of possibilities.

• Building high performance, interdependent teams. Outstanding leaders build teams: teams that place the interests of the company above self-centred, vested concerns.  Leaders align people and positions for individuals to operate as part of a larger, interdependent organism.  Staff know that they function within a department with clearly defined jobs, yet, they also feel part of the entire organization, and feel significant in that they make a meaningful contribution, not just in their positions, but to the overall results of the company as a whole.

Who manages and who leads?

Having established that a manager’s focus is relatively short-term, with leaders taking a longer-term view, we can conclude that most people in management positions are both managers and leaders.  Exceptions occur, however, at the two extremes of the corporate hierarchy.

Thus a Supervisor, or person occupying the bottom level of a management position, will probably have no leadership responsibilities.  He or she will attend to everyday practices to achieve quick, tangible and observable outcomes.

At the other end of the scale we have Executive Directors and Chairmen, whose function is to provide governance, ensure that the company is operating efficiently, and is on-track towards achieving it’s strategic intent. Executive Director’s, therefore, usually practice no hands-on management at all.

Between Supervisors and Executive Directors/Chairman, we have varying combinations of management and leadership practices.  Generally, more leadership and less management are required as we move up the corporate ladder.  Conversely, more management and less leadership are needed as we move down from Managing Director to first-line Manager.  This situation is illustrated in the chart that follows.

As the above diagram shows, a Senior Manager is more or less required to apply equal amounts of both management and leadership practices.  As we move up the ladder, more leadership than management is required. Conversely, lower management positions require less leadership and more management.

Conclusion

Both management and leadership have to do with getting results through people. Yet these functions are qualitatively different in that the one is tactical and the other strategic.

Management is concerned with concrete short-term outcomes.  Leadership addresses long-term factors that are much more ambiguous, uncertain and even paradoxical.

It is a myth to think that leadership has replaced management.  Leadership is practiced in varying degrees as one moves up the corporate structure.  Companies that achieve outstanding, sustainable results have managers that manage, leaders that lead, and many people who do both in varying degrees.