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Leadership vs. Management – How the Difference Matters for Your Company

A lot of the breakdowns in management processes – and failures of managers in general – can be attributed to mistaken the notion that management is synonymous with leadership.

While both managers and leaders are placed in decision-making positions, the similarity largely ends there. Managing a business or a team and actually leading it require very different skill sets and objectives, and this distinction can make a massive difference to your organization’s success.

It’s vital to treat leadership and leadership development as a separate program from management training if you are to gain the maximum benefits from your high-level executives and decision-making roles. For example, if you look at the managerial traits that were the most highly valued by employees during the COVID-19 crisis, you will notice that they have more to do with leadership than only maintaining business processes/productivity. 78% of employees appreciated crisis response, 80% cited proactive action, and 77% were satisfied with the information dissemination during this time. For managers to step up to the occasion, they need to become leaders.

What is the Difference Between Leadership and Management?

Management refers to a set of titular designations that are assigned to decision-making roles in a company. Managers are provided with an overarching set of principles and objectives and must figure out how to best maneuver them with the available resources. Managers could bring vertical-specific certifications, and typically have one or multiple teams reporting to them.

Leadership is a very different ball game.

Rather than a designation, it refers to a professional quality that makes an employee suited to progressive and effective decision-making. Technically, a non-manager position can also emerge as a leader (this is frequently the case in large teams, with smaller micro-employee groups).

An organization’s leadership is responsible for the larger vision directing day-to-day operations. To take a simple example, a leader establishes clear work hours and prioritizes work-life balance. A manager is responsible for executing this vision through four-day workweeks, mandatory leaves, etc. Further, leaders are charged with defining the managerial style to be applied for workforce mobilization. They define the strategy, while a manager takes care of tactical execution.

But despite these major differences, most organizations will have an overlap between management and leadership. That is because the high-level leadership at the CXO or board level has little day-to-day interactions with the workforce. The management, therefore, has to act as both enforcers of policy requirements as well as direct leaders to employees and teams.The problem arises because most managers are not trained for leadership – according to research, nearly 50% of management candidates lack leadership skills, while 18% lack planning skills, and 14% are missing the ability to communicate effectively. This divide between management training and leadership development can cost your organization heavily over time.

4 Reasons Why the Difference Matters

It isn’t enough to only know what the difference is between leadership and management. Organizations must recognize how this distinction plays out in the workplace and shapes business outcomes.

4 key reasons are:

  1. Traditional managerial roles may not respond well to a crisis
  2. Managers can overlook team optimization opportunities
  3. Not knowing (and acting on) the difference can impede succession planning
  4. Team members could be missing the mentorship and direction they sorely need

1. Traditional managerial roles may not respond well to a crisis

As the management’s primary responsibility is to maintain and ensure existing business continuity, there may be ill-equipped for crisis response. During any disruption, you will need to think outside of the box, embrace a certain degree of risk, and boldly steer the organization towards positive outcomes. For example, a traditional manager would hesitate to switch to WFH overnight, while leadership development would equip them to weigh the pros and cons, gauge risks, and make an informed yet non-risk averse decision.

2. Managers can overlook team optimization opportunities

The need to maintain a stable, as-is state can drive managers to overlook opportunities for change, improvements, and optimization. Current team dynamics may be working perfectly well, but it may just be possible to achieve better outcomes by onboarding a third-party consultant, dramatically rearranging schedules, etc.

A leader would be able to spot these opportunities – which is why leadership development is so important for managerial roles. It would allow managers to combine their on-ground understanding of risk, resource availability, gaps, and objectives with key leadership traits to make the best decisions.

3. Not knowing (and acting on) the difference can impede succession planning

Internal hiring and promotions were always a popular way to find and appoint leaders, and research suggests that this trend is on the rise. According to LinkedIn’s Global talent Trends 2020 report, there has been a 10% increase in internal hires over the last five years. But the notion that management is synonymous with leadership will lead to erroneous hiring decisions and the appointment of individuals who aren’t really prepared for key roles. For a truly robust and effective succession planning program, companies must recognize and act on the difference between leadership and management, bridging the gap through intentional development techniques.

4. Team members could be missing the mentorship and direction they sorely need

When team managers do not have sufficient leadership capabilities, a vacuum emerges in terms of mentorship, direction, and guidance. Remember, the workplace experience is more than just work – it encompasses culture, psychological safety, purpose, motivation, and belonging. When these non-work factors are missing due to a lack of capable leadership, team members get frustrated and disengage (even if they do stay productive on paper). The ongoing WFH environment reveals how chronic this challenge is – 54% of employees are overworked and 39% exhausted, even as 61% of those in managerial roles say they are thriving.

Without the ability to lead with empathy, managers become disconnected and risk large-scale team turnover.

Not Taking the Correlation Between Leadership and Management for Granted

Managers are often expected to be leaders, but that doesn’t mean the correlation is inherent. It is because of this very expectation that companies must ask themselves “what is the difference between leadership and management?” Are we investing enough in leadership development for roles that may be managerial in designation, but require leadership traits to perform really well? Raising these questions is the first step towards building a strong middle-management bulwark that can drive your company through the best and worst of times.


This post was originally published on the AceUp blog

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