Leadership vs Management: what's the difference?

It’s important to remember that leadership and management are two different things. They can share similar characteristics and some people might undertake both roles in a business. It’s also possible to be one and not the other, and different characteristics are needed from both to be a successful leader or manager.

Some of the key differences between a leader and manager are:

• Management is often focused on tasks and processes, while leadership is focused on vision and strategy.
• Management is often about directing and controlling while leadership is about inspiring and empowering.
• Management tends to be more transactional, while leadership is more transformational.
• Managers typically operate within the established system, while leaders often challenge the status quo and drive change.

The overarching theme to think about when defining the two is that managers tend to be responsible for day-to-day, short-term factors of running a business (people, processes, tasks), while leaders are more long-term focused – being idea based, setting the overall direction, and inspiring the workforce.

Think about the life cycle of a business as a journey on a ship.

The manager is like the captain – they keep the ship on course, ensure the crew is doing their jobs properly, and makes sure everyone is safe and comfortable.

The leader on the other hand is like a navigator – they chart the course of the journey, plot out the best way to reach the destination and make sure everyone is motivated and inspired to keep going.

Both roles are important, but they are responsible for different things. The manager keeps the ship running smoothly, while the leader makes sure the ship is heading in the right direction.

In business, governance refers to the structures, processes and practices that are put in place to ensure the company is run in a responsible and ethical way (charting the course). This can include things like policies and procedures that guide decision-making, oversight of the business’ activities, and mechanisms for accountability and transparency.

There are three main types of governance which leaders should be aware of:

Strategic – a focus on setting the overall direction of the business and making sure the company stays aligned with its mission and values.

This is about asking questions like “where are we going?” and “how are we going to get there?” to help create a roadmap for the business to ensure it stays on track to achieve its goals.

Operational – ensuring the business is run efficiently and effectively, as well as resources being used wisely.

This is about asking questions like “how well are we doing?” and “how can we do better?” to make sure the company is functioning at its best and that it’s meeting the needs of its stakeholders.

Risk – helping to identify, plan for and deal with any potential risks that could impact the business.

This can include things such as cybersecurity, financial and reputational risks, and is about asking questions like “what are our weak/vulnerable points and how can we mitigate them?”.

By focusing on these things leaders can help to protect the business and its stakeholders from harm. Something which is particularly important in today’s business landscape where risks facing companies are constantly evolving.

While a leader is responsible for governance, which will have an impact on the day-to-day activities of a business, it is the role of a manager to see that the actions are carried out in order to meet those targets.

Everyone will have a different approach to managing people. There are several categories you might fall into, each with strengths and weaknesses.

No style is right or wrong, it’s about what works best for you, your team, and the business. Sometimes it might even be necessary to switch styles depending on the circumstances – for example when faced with a crisis.

Democratic – the manager involves others in the decision-making and values input from the team.

This management style can lead to a greater motivation and commitment within the team as members feel valued and can see how their decisions work towards the organisation’s goals. Feeling valued can also generate more creative ideas, making it easier to problem-solve and innovate.

However, this approach can be time-consuming, as there is more input required to make decisions. This also makes it impractical in a crisis when quick decisions are needed.

Autocratic – the manager holds absolute authority, making decisions without input from others and expects them to simply comply. Within this style alignment isn’t a preference, it’s non-negotiable.

This approach can bring about a greater clarity for employees. They know exactly what they need to do, what is expected from them, and understand who is accountable for what. It also makes for quick decisions, with those at the top not having to seek input from others, making it particularly effective in a crisis.

While the autocratic style may be efficient from a manager’s point of view, it can be detrimental to employees. Deviation from the grand plan can be met with criticism and frustration which will leave employees feeling threatened and demoralised.

Laissez-faire – also known as ‘hands-off’ leadership, the manager gives the team a lot of autonomy and freedom to make decisions.

A hands-off approach can empower the team by allowing them to take a greater ownership of their work. Less micromanagement can also make them feel more motivated and inspired by a greater flexibility to complete work however it is most efficient for them.

This can, however, lead to a lack of direction and confusion among employees, as the manager doesn’t give much guidance. For this style to be effective, the team will need to be driven, self-sufficient and trusted by management, so it helps if there is a strong level of understanding built into the onboarding process.

Transformational – the manager takes on a mentoring role to inspire, motivate and develop the team to achieve a shared vision.

This style is fuelled by a culture of trust and collaboration. Transformational managers are often highly charismatic and visionary, encouraging the team to think creatively and take risks. This can be very effective for businesses going through a period of change or have a need to innovate.

It can prove difficult for managers to maintain a balance between providing direction and giving employees the freedom needed to take initiative.

Servant – the manager focuses on meeting the needs of the team and helping them grow and develop.

In this style, the needs of the team are prioritised. This usually comes from a manager that is approachable and leads by example, therefore resulting in a greater trust, honesty, and integrity among the team.

Being a servant leader can take a lot of time and energy as it’s important to be highly engaged and truly listen to and understand the team’s needs. There is also a balance to be met between providing the guidance necessary to lead a team effectively and being passive enough to allow freedom.

As we’ve established, there is no one way to go about being an effective manager. However, there are some common themes that are useful for everyone in a position of manager to take on board.

Effective communication – being clear and providing consistent communication with the team. It needn’t be too overbearing, but enough to keep people informed and not guessing what is required from them.

Empathy – understanding and considering the perspectives of team members. Everyone is different, so the ability to see things from other’s points of view is a great way to ensure individuals feel heard, respected, and ultimately results in healthier interactions and greater alignment.

Accountability – holding themselves and others accountable for their actions and results. Accountable manager are more likely to make sound decisions, as well as inspire transparency within their team. We’re all human, so we all make mistakes and it’s important everyone owns that to create a culture of continuous improvement.

Decisiveness – making decisions in a timely and informed manner. This helps managers to seize opportunities and overcome challenges, especially when those decisions can have a significant impact on the bottom line or create bottlenecks in workflows.

Delegation – empowering the team to take on responsibilities and develop their own skills. As a manager, you have a team for a reason, so it’s important to use them. By delegating tasks you can identify and leverage the unique strengths of each team member, as well as relieving your own workload to avoid burnout.

Continual learning – actively seeking out opportunities to learn and grow as a manager. In today’s business landscape, the pace of change is rapid, and the skills needed to be successful are constantly evolving. It’s important to stay relevant and up-to-date to avoid falling behind competition and being unable to lead effectively.

Like all things in business, the world of leadership and management is constantly evolving. It’s important to move with it and stay up-to-date with trends to avoid falling behind. Here are some ways it is developing:

1. A shift towards remote work and virtual teams, requiring leaders and managers to adapt their communication and management styles.
2. An increased focus on diversity, equality and inclusion which is driving a need for managers to develop cultural competence and humility.
3. Emphasis on emotional intelligence and the importance of creating a positive work culture.
4. A greater emphasis on data-driven decision-making and analytics.
5. Growing importance of ethical leadership, with a focus on sustainability and social responsibility.