Recently, I was contacted by an organizational administrator who said that he needed to talk to me about leadership development. I went to his office at the appointed time. He began to ask me questions about issues related to dealing with managing and appraising employee performance and making the organization run more effectively and efficiently.
I responded, “Those aren’t leadership issues. Those are management issues.”
I wish I had a nickel for every time during the years I have spent studying organizations, leading and managing organizations and in serving as an organizational consultant that I heard someone use the words “management” and “leadership” interchangeably.
I had begun to think that maybe there was something wrong with me because the confusion between the two bothered me so much. Then I chanced upon an article entitled “Management Is (Still) Not Leadership” by Leadership guru John Kotter, the former Professor of Leadership at Harvard Business School and current Chief Innovation Officer at Kotter International.
In the article, Kotter shared a story similar to what I had just experienced, then added:

In more than four decades of studying businesses and consulting to organizations on how to implement new strategies, I can’t tell you how many times I’ve heard people use the words “leadership” and “management” synonymously, and it drives me crazy every time.

The interview reminded me once again that the confusion around these two terms is massive, and that misunderstanding gets in the way of any reasonable discussion about how to build a company, position it for success and win in the twenty-first century.

He pointed out that the mistakes people make on the issue are threefold:

Mistake #1: People use the terms “management” and “leadership” interchangeably. This shows that they don’t see the crucial difference between the two and the vital functions that each role plays.

Mistake #2: People use the term “leadership” to refer to the people at the very top of hierarchies. They then call the people in the layers below them in the organization “management.” And then all the rest are workers, specialists, and individual contributors. This is also a mistake and very misleading.

Mistake #3: People often think of “leadership” in terms of personality characteristics, usually as something they call charisma. Since few people have great charisma, this leads logically to the conclusion that few people can provide leadership, which gets us into increasing trouble.

What are the Differences Between Leadership and Management?

For many people, that raises the question, “If ‘leadership’ and ‘management’ are different, what are the differences between the two?”

Management includes those processes that make systems of people and technology work well in running the organization on a daily basis. Those processes include

  • Planning,
  • Organizing,
  • Staffing,
  • Directing,
  • Coordinating,
  • Reporting,
  • Budgeting, and
  • Problem solving.

Leadership is creating systems that managers can manage and transforming systems in fundamental ways, when needed, to take advantage of opportunities for growth, evolution, and hazard avoidance. Leadership processes include

  • Creating systems,
  • Creating vision and strategy,
  • Communicating,
  • Setting direction,
  • Motivating action, and
  • Aligning people

A second question that often arises out of a discussion of management and leadership is “Is it more important for an organization to have strong leadership or strong management?”

That is not a simple question to answer. What we know is that when organizations have high competencies in both management and leadership, they are able to meet challenges now as well as in the future. What we also know is that most organizations are usually lacking one or the other. When management exists without leadership, the organization is often unable to change. When leadership exists without management, the company is only as strong as its charismatic leader.

Newly formed organizations usually have an abundance of leadership and a lack of management. The savvy organizations gradually add management capabilities while maintaining the inspiration of leadership that initially resulted in the creation and rapid growth of the organization. However, inevitably what happens is the leader tends to move on to something else and management fills the void. The result is the organization gradually transitions into a state of complacency where, as Kotter says, “management reigns supreme and leadership is in short supply.” As a result, most organizations are overstaffed with managers, but lack enough leadership to help them deal with constant change.

For an organization to sustain optimum performance, administrators who are strong leaders need to surround themselves with enough managers to ensure that the day-to-day operations of the organization run effectively and efficiently and administrators who are strong mangers need to surround themselves with enough leaders to ensure that the organization is able to avoid stagnation, adjust to constant change and remain relevant.

The Need for Balance Between Leadership and Management