Management and Leadership: More Than a Semantic Difference!

It is very often asked: “what is the difference between management and leadership?” One established concept has been that managers are found up to certain midrange hierarchy levels and leaders are found at the levels of heading functions, locations, businesses and organizations. This question has become even more confounding with a liberal use of the term leadership in organizations. Many times such organizations use the terms manager and leader interchangeably. The concept of grassroots leadership which implies that leadership can be found even amongst the frontline employees or public at large adds an intellectual red herring in the debate. On the other hand, the law usually considers officers, managers and directors as legally and operationally relevant terms. Leader is not a legally or administratively practical term.

For all the extensive, often liberal use of leadership as a term, even corporate organizations do not accord a formal recognition to leadership as a title. Organizational nomenclature includes titles such as executive, manager, president and director (with all the prefixes such as junior, senior, general, vice and a few others as applicable) but never a title that has the term leader in it. Even the acknowledged leader of a corporation is called the chief executive officer, managing director or chairman but not the chief leader, so to speak! Does that mean that leadership is a qualitative and ubiquitous concept that cannot be formally assigned? Or, does it mean that leadership has such deep undertones and person-to-person variations that the concept cannot be adequately framed in a formal title? If so, why does so much rhetorical debate exist around the terms management and leadership and why does the term leadership get used (or misused so much)?

Semantics of differences

According to the Oxford Advanced Learner’s Dictionary, management is the act of running and controlling a business or similar organization, and a manager is a person who is in charge of running a business or a similar organization, or a part of one. The dictionary also defines a leader as a person who leads a group of people, especially the head of a country or an organization, and leadership as the state or position of being a leader. The definitions are semantically similar in terms of the domain of operation, that is, a business, organization or a part of it. The fundamental difference is that a manager is expected to “run and control” while a leader is expected to “lead”. The former gives a profile of acting within a boundary while the latter provides a flavor of defining a boundary. In a simple but elegant manner, the behavior with reference to a boundary sets the tone for the qualitative difference between a manager and a leader.

Much has been said by management experts to delineate the differences. In his 1989 book “On Becoming a Leader,” Warren Bennis composed a list of the differences. Some of these are: the manager administers while the leader innovates; the manager maintains while the leader develops; the manager focuses on systems and structure while the leader focuses on people; the manager relies on control while the leader inspires trust; the manager has a short-range view while the leader has a long-range perspective; the manager has his or her eye always on the bottom line while the leader’s eye is on the horizon; the manager accepts the status quo while the leader challenges it; the manager is the classic good soldier while the leader is his or her own person; and the manager does things right while the leader does the right thing. Other viewpoints are that management is all about efficiency while leadership is all about effectiveness, and management is about planning, executing and controlling activities while leadership is about inspiring, motivating and leading people.

Beyond semantics

Leadership and management must go hand in hand. While they are not the same thing, they are necessarily linked, and complementary. Not all efficient managers can be effective leaders while a leader cannot be effective unless he is an efficient manager too. Clearly, leadership has a wider canvas than management. Every manager has the opportunity and challenge to demonstrate leadership while every leader has the responsibility not to disown his or her managerial legacy. While the concept of “born leader” reflects a hypothesis that leadership characteristics tend to be intrinsic to an individual, an overwhelming proportion of leaders would perforce have to take the managerial route to becoming a leader. This is true to the core with professional leaders. On the other hand, entrepreneurial leaders who forget their managerial basics create a shaky short term that fails to support the distant long term vision, however appropriate it is.

Leadership and management are not necessarily hierarchical even though the way businesses and organizations are run allows for only a few leaders while it requires scores of managers. This is also the reason why corporations and groups which design their strategies and structures to facilitate many leaders are visibly more expansive and successful than those which have unitary and constraining organizational strategies and structures. A leader’s role is primarily transformative in that he or she constantly makes change happen; discovering and actualizing new boundaries is a critical aspect of leadership. A manager’s role is primarily focuses on execution in that he or she constantly converts plans into reality; that said, planning and controlling are a critical aspect of management. An effective manager demonstrates a potential for leadership every time he or she encounters a challenge or an opportunity. An efficient leader demonstrates a flair for management every time he or she seeks to convert his vision into strategy, and then to execution.

Measure and listen

It is often stated that what is not measured cannot be managed. It is not surprising, therefore, that managerial performance is often linked to measurement. Whether it is physical or financial performance, metrics are the key to management. Meaningful metrics which are benchmarked with internal and external best practices help demystify performance. At the same time, metrics that are not perceptive and are not benchmarked provide an illusory feel of management, in terms of planning, execution and controlling. An ability to understand the lead and lag effects of a metric is an essential component of managerial competence. A diligence to recognize the story behind the behavior of a metric is, however, reflective of managerial maturity. An organization which has a managerial bench that appreciates and implements a forward looking metrics based paradigm is likely to be efficient and effective, relative to its peers in the industry.

If metrics are the bedrock of management, listening is the hallmark of leadership. A leader’s communication skills help the leader to present his vision to the people he or she leads, inspiring them to execution. A leader’s real communication skills are, however, rooted in the complementary arm of communication, namely listening. A true leader listens as much as he or she is listened to. There have been exceptional leaders who listened to their inner voice and developed industry leading products, be it Henry Ford in the case of automobiles or Steve Jobs in the case of consumer electronics. Most successful leaders stay tuned to developments in the marketplace, customer feedback, employee expressions and stakeholder expectations to work proactively on industry leading concepts. The successful leader, therefore, creates an organizational ecosystem by which not only the leader but also employees stay connected to the external environment and with internal customers for transformative performance.

Development options

Given the importance of efficient (and effective) management as well as effective (and efficient) leadership, the development of a robust managerial and leadership talent pool with the right attributes is a key talent task. Education and experience need to be synergized to achieve expertise that can lead to superior managerial efficiency and effectiveness. Connectivity and communication need to be institutionalized to achieve an ambience that can lead to superior leadership effectiveness and efficiency. Each organization would need to develop its own talent models that would meet the twin objectives. Leadership is a qualitative and ambient motivational drive of an organization while management is a tangible and visible dimension of performance of an organization. In virtuous organizations both leadership and management work as institutionalized concepts enabling the organizations to achieve sustainable competitive advantage.

Posted by Dr CB Rao on August 12, 2012