Business Leadership & Entrepreneurship

Management vs Leadership – Understanding The Differences

Jul 11, 2021
Reading Time: 5minutes

Is a good manager naturally a good leader? What are the differences between management vs leadership?

The main difference between leaders and managers is that leaders have people follow them whilst managers have people who work for them.

Even small businesses that are largely self-operated or staffed by friends and family members will require some level of staff management, and simultaneously, some level of leadership.

In this article you’ll:

●      Understand the differences between management and leadership

●      What is the definition of management?

●      What is the definition of leadership?

●      Why you need to be both in modern business


One of the main challenges of running a business is knowing how to actually manage it. I don’t mean on an administrative level either, but on a personal level: how you interact and manage those in your pay. After all it’s one thing to balance budgets and work out company logistics, it’s another entirely to try and effectively manage people; that most HR specialists will probably liken to herding a small cluster of highly independent, contrarian kittens.

Yes, that’s right. If you haven’t figured it out already yourself, management and leadership are two different things entirely, even if they float towards similar goals. Ultimately the difference lies in how the two approach similar challenges.

Understanding the differences between management and leadership can enable you to begin grappling with the worst aspects of managing a company by recognising when to employ and combine the two. For example, a recent Gallup study found that only 60-70% of employees were working at full capacity, decreasing the company’s productivity, and costing them millions because of poor management and leadership.

People don’t leave companies, they leave managers and leaders.

What is Management?

As a manager, you’re responsible for the actual running and administration of the business and its workforce. This role emphasises ensuring that the infrastructure for operations running smoothly is in place and that everything is exactly where it needs to be – when it needs to be, and that the work is documented where necessary.

Management frequently tends to be rational problem solvers, with a head for numbers and excitement for flow charts. In an ideal situation, a successful manager is very rarely seen, they don’t micromanage yet their influence is widely felt throughout the company. Ultimately they work behind the scenes to ensure that the business operates as smoothly as possible.

In this way managers are necessary for making sure your business knows what needs to be done, and setting out clear objectives in order to meet those goals. This can be anything from increasing profit margins, to improving customer feedback.

In addition, managers are responsible for top-down perspectives on businesses. They’re often the eyes and ears for the company as a business and are sensitive to certain situations like drops in income, customer complaints, and kinks in the broader system. Such early warnings are imperative to keep the business functioning as a commercial enterprise, and should never be dismissed. After all the devil is always in the details.

Of course, this also means that managers tend to be somewhat removed from the day-to-day concerns that the business faces, and several have difficulty seeing the bigger picture. Small details get lost or ignored, unable to recognise the toxic personalities in their teams; resulting in managers making decisions that may look good on paper, but just don’t work in practice because they fail to take into account small but vital realities.

The tendency of managers to focus on procedures and routines also makes them poor in terms of human resource management. Remember that people aren’t numbers, they’re people, and expecting them to simply adhere to plans as dictated by the head office isn’t likely to work as expected.

Managers should always look to provide a happy working environment.

Management vs Leadership - Understanding The Differences

What is Leadership?

When you adopt a more leadership-oriented role, you’re dealing more from the frontlines as it were, and getting into the action up close. Whereas managers tend to direct, leaders will often inspire by example. To this end, they are very active and very adaptable, capable of making snap decisions as and when the situation demands. They’re also very people orientated. Whereas managers are better with numbers and schedules, leaders are the driving force behind workforces and teams. If managers provide the goals, it’s the leaders who help the company meet them.

Naturally, it follows that leadership is used when you want to keep a company moving forward, and to keep it mindful of the people who form it. Whereas managers can sometimes lose sight of the employees in the pursuit of goals, leaders remain connected to the task force and will often bring any issues relating to staff performance or morale to the management’s attention. They’re also usually responsible for details including staff hiring, training, rotas and orientation. Leaders set the tone for the type of company they wish to attract more talent to.

Of course, leadership has its shortcomings too. Leaders tend to miss how their businesses will function due to being involved in the company’s vision, and thus may have ideas that whilst brilliant, aren’t workable given broader limitations of the company.

Leaders can also be a little disorganised and undirected – sometimes labeled as the “flawed genius” of the company, where they have clear objectives for where the business should go, but lack the capacity or methods on how they can be achieved or improved.

The desire to innovate and constantly change things around can also be disruptive to business practice, creating situations whereby unnecessary tweaking institutions that previously worked may become suddenly broken, or bring up new and previously unseen complications. It can also cause them to butt heads with more team members who prefer stability over change. Leaders and leadership tend to display revolutionary as opposed to evolutionary qualities.

The Nature of Modern Business Practice – Management AND Leadership

As with all facets of a business, management and leadership has their own strengths and weaknesses. However whereas in the past the two could have been kept separate, in today’s economy business owners can no longer afford to be one or the other. In order to truly get the most out of your company, knowing how and when to employ both can be instrumental in your business’s success.

Hence why many brands are turning to brand journalism to tell the story of the company they are, to attract the right talent to follow their vision.

Think of the two as follows – management is the head of the operation, but leadership is the heart. A successful business owner needs to be both a strong leader and manager to get their team on board to follow them towards their vision of success.Management vs Leadership - Understanding The Differences 1

Read our CEO’s personal, frank and no-nonsense story on leadership here.

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