The Difference Between Management and Leadership

What’s more effective for achieving organisational goals: great management or great leadership? 

If you are looking to build a high-performing leadership team, the short answer is both. They are two sides of the same role, and while good managers are not necessarily good leaders, truly great leaders must have sound management skills. So, while we want to get to the bottom of their differences, we must understand that there is considerable overlap too.

In general, management focuses on executing organisational functions and ensuring things run smoothly. Managers are typically responsible for maintaining the status quo, optimising processes, and making decisions based on established guidelines and procedures. They are detail-oriented, dealing with day-to-day operations and allocating resources efficiently. 

On the other hand, leadership is about inspiring and motivating people. Leaders take a more visionary approach, focusing on long-term goals and strategic direction. They build trust, engage team members, and guide them towards a shared purpose. A vital aspect of leadership is rallying employees around the company's vision and mission, and connecting them with the bigger picture. 

The question can be interpreted a few ways. However, in this article, we will explore them as two different ways of approaching a C-suite or director position – with a management or leadership mindset. To be clear, we are treating “leaders” and “managers” as those in roles at the very top of an organisation (rather than, say, a team leader or a line manager). But we are also treating them as aspects of a single person, one who displays both leadership and management skills, rather than simply one or the other.

This article runs through the similarities and the key differences between leadership and management, and how to graduate from a great manager to a great leader.

Similarities between leadership and management

First, let’s understand where the overlaps lie. 

It’s fair to say that most people would prefer to see themselves as a great leader rather than as a great manager. The words conjure completely different ideas of a personality. A leader inspires and empowers; a manager drives efficiency. 

However, while we would argue that leadership elevates senior executives beyond simply managing an organisation; being an effective manager is the basic prerequisite of becoming a good leader. Both involve working with people to achieve common goals and both are about mobilising and coordinating teams and resources to drive the organisation forward.

Dave Ulrich’s Leadership Code is a good illustration of how “leadership and “management” can overlap and work together.

Dave Ulrich’s Leadership Code: where different kinds of leaders place their focus and time

Leaders and managers both need to spend much of their time and focus on the near-term “management” quadrants – talent management and execution – in order to get things done. But if they are to excel at leadership, they also need to look at the long-term as human capital developers and strategists. It’s important to note that “leader” and “manager” are not separate people or functions, but a spectrum of skill sets within each individual. 

Managers and leaders must be able to: 

• Plan, delegate and coordinate projects

• Communicate effectively with team members and employees

• Employ decision making skills

• Solve problems

Leaders and managers often possess strong interpersonal skills, communication capabilities, which requires emotional intelligence characteristics such as self-awareness and empathy. Effective communication, decision making and problem solving are all essential for both good management and good leadership. 

The key differences between leadership and management

By acknowledging the key differences below, we can better understand the unique roles and responsibilities of management and leadership. Both are essential for the success and growth of an organisation, each contributing their own set of expertise and direction.

Focus and approach

• Management: focus on the organisation first, reaching business goals by overseeing the process of delivering tasks and activities. 

• Leadership: focus on people first, influencing them to be high performers by effectively communicating a vision and aligning them with the organisation’s goals.

Leaders and managers both need to be able to conduct the day to day operations of a business, but it’s how they think about success that sets them apart. 

Goals and objectives

• Management: focuses on organising and staffing, ensuring tasks are completed and processes are followed. 

• Leadership: aims to align people with the vision and mission of the organisation, inspiring and motivating them to achieve higher levels of performance.`

• Management: pursue goals through coordinated actions and tactical processes, working to maintain the established systems and structures. 

• Leadership: achieve them by directing people’s attention to long-term strategies and objectives.

Hard and soft skills

• Management: skills are typically hard or technical, such as planning, budgeting, and task allocation. 

• Leadership: skills build upon shared skills. They are often soft or interpersonal, encompassing decision-making, communication, relationship building, and strategic thinking.

Emotional intelligence

Both require emotional intelligence in order to get the best out of their people; but the reasons are different.

• Leadership: using emotional intelligence to connect emotionally with employees to understand what makes them tick and therefore align them with a vision or goal.

• Management: using emotional intelligence to respond to team needs constructively and navigate conflict in order to achieve a task.

Read more about the role of emotional intelligence in leadership.

Delivering value creation

The differences in method and purpose detailed above are most critically evident when it comes to value creation.

Both management and leadership skills are needed to deliver value, but the way they identify and deliver it is different. At the very least, leaders must set the strategy for value creation and use their leadership skills to gain buy-in from employees with their charisma and an inspirational vision. But for it to become a reality, leaders need to use their management skills to execute.

For example, when a leadership team must deliver on a value creation plan that involves digitising operational processes to reduce costs and increase profits, both leadership and management comes into play. The leader builds relationships across the team and the departments and communicates the vision to get people behind the project, while the manager makes the business case for the organisation, allocates the tasks and budgets the project. 

How to graduate from manager to leader

Focus more on people and you’re leading, more on results and you’re managing. If you identify the behaviours of a leader vs a manager, you can understand how a great leader acts in certain situations, and get a deeper insight into future performance than personality and work history.

At Leadership Dynamics, we have found that companies that build a team of people who are naturally aligned with an organisation’s goals and culture are more successful than those who hire only on the basis of competencies and performance history. If leaders find they have to spend time managing people to ensure the work is done, it could mean the hiring criteria needs an update.

Our behavioural assessment model, PACE, objectively measures leaders and leadership teams. Based on data from some of the highest performing leadership teams in private capital-backed businesses from the past 10 years. PACE measures a candidate’s overarching Pragmatism, Agility, Curiosity and Execution and scores them against the several sub-behaviours within them.

If you want to graduate from management to leadership, you can build awareness of your current behaviours for free with PACE. It is the only behavioural analytics tool designed for and benchmarked against leaders who work in the high-pressure environment of private-equity backed businesses.

An example PACE report showing the spread across the four overarching behaviours required for high-performing executives.

Leadership and management are not mutually exclusive

Leadership and management are two essential aspects of any organisation. Although they are often used interchangeably, they represent distinct concepts and roles with different functions and goals. A harmonious blend of both leadership and management is crucial for an organisation's success.

The relationship between leadership and management is complementary rather than mutually exclusive. Both are necessary for an organisation to thrive, and they often overlap in practice. The key is to strike a balance between the two to ensure that an organisation remains both stable and adaptive, with strong structural foundations and the flexibility to innovate.

Organisations that prioritise leadership without effective management may struggle with operational inefficiencies and resource allocation. Those that focus solely on management without strong leadership may stagnate and fail to adapt to market changes and evolving industry trends. Ultimately, the ideal blend of leadership and management not only ensures a smooth interaction between vision and execution but also fosters a healthy organisational culture that empowers employees and drives growth.