Much modern business theory now focuses upon ‘hair-splitting’ distinctions between the roles, responsibilities, skills and capabilities of management and leadership in the business context. These theoretical specifications can often cloud the fact that a successful business needs both strong, innovative and visionary leadership and also diligent, effective managers. For the company to remain operationally serviceable, to progress, to learn, to change (when required), to evolve and to remain competitive within the market-place, both are needed.
In simplistic terms, “Google” (on their landing page for this topic), states – “The main difference between leaders and managers is that leaders have people follow them while managers have people who work for them”. More controversially they say also “The difference between being a manager and being a leader is simple. Management is a career. Leadership is a calling. A leader is someone who people naturally follow through their own choice, whereas a manager must be mostly obeyed”.
We agree with these statements only in part. … So what would Corporate Alchemy say about management and leadership?
In overview summary
Management is a set of processes that can keep a complicated system of people and business processes operating smoothly. Some of the most important elements of management include detailed planning, budgeting, organising, staffing, controlling and problem solving.
Whereas Leadership is a set of processes that creates organisations in the first instance or adapts them to significantly changing circumstances (both internally and driven by factors external to the organisation, such as market forces and pressures). Leadership defines what the future of the organisation could or should look like, aligns people with that vision of the future and inspires them to make it happen, despite obstacles.
In more detail about the important elements of management and leadership, where…
Management focuses upon:
1. Planning and budgeting aspects – managing is about planning, implementing and establishing the detailed steps, detailed financial budgets and timelines for achieving needed results, that includes allocating the required resources to reach the objectives.
2. Organising and staffing – management establishes the optimum structure (both process and people) for accomplishing the plan (see above). This includes ‘staffing’ that structure with employees (or external persons), then delegating authority and responsibility for enacting the plan. This includes the operational aspects of providing policies and procedures to assist and guide employees and creating repeatable methods or systems to monitor the implementation of the plan.
3. Monitoring, controlling and problem solving – managers monitor the results. They identify any deviations from the plan (and / or detailed budget) or other problems (ie. obstacles to success) and then they tactically plan and organise to solve these problems or obstacles.
4. What does this produce? Varying degrees of predictability, order and operational stability that has the consistency to produce the short-term results expected by various stakeholders. Whether the stakeholders be customers (meeting quality expectations and ‘being on time’) or stockholders (for publicly listed organisations) and chief financial officers (being on budget or within planned budget).
Leaders are compelled into:
1. Creating organisations – a leader (often termed an entrepreneur) or group of leaders sets-up or creates a new company or organisation allowing new or innovative products to be bought into being, produced or manufactured, often with high financial risk involved. Then they steer these products or services into a marketplace for sale to customers for financial profit.
2. Establishing organisational direction – leaders develop a vision of the future, which can often be a distant future. They produce the new and often unconventional strategic overview, identifying the specific direction and the ‘first pass overview’ for the interlined actions in the chain to accomplishing the vision.
3. Aligning people – leaders communicate their organisation’s vision and direction whether in deeds or words, so as to positively influence those parties (whose cooperation is needed), into agreement with the vision and to lend their support and commitment to achieve the vision’s realisation.
4. Motivating and inspiring – energising people, staff and employees to overcome major bureaucratic, political, regional, cultural and resource barriers and potential obstacles to change, to progress and to radically improve by satisfying their peoples’ basic and sometimes unfilled human needs (refer to Maslow’s hierarchy of needs, especially ‘achieving one’s full potential’ and ‘feelings of accomplishment’ and ‘security’).
5. What does this produce? Conceiving new opportunities leading to Change, often to a dramatic degree, and that has the potential to produce extremely useful change. This can be in such areas as new products that customers want or in new approaches to personnel and employee relationships that help employees’ performance improvement, improve productivity or to make a company more competitive.
In working with thousands of people, we have encountered natural managers and natural leaders, where their personal profile and innate talents make them suited to take up either one or the other position. But we have also learned that the respective skills of managers and leaders can be learnt, adopted and practised. It’s a matter of preference which activities you choose to do, though the path of least resistance is always what aligns with your natural talents and strengths.
8 May 2019