One of the most enduring trends in business writing over the last few decades as been the tendency to draw sharp distinctions between “leaders” and “managers.” Unfortunately, many writers fall into the trap of characterizing “leaders” as universally good and “managers” as universally bad. While there are certainly differences between them, the reality is more complex. Successful organizations need a good balance of leaders and managers in order to be effective.
Here are a few key differences between leaders and managers, along with some insight into why a healthy organization should have plenty of both.
People: Followers or Employees?
Leaders Have Followers
Leaders have a way of inspiring others that earns them the respect and trust of others. Integrity and credibility are among their most important qualities. People follow a leader because they want to, not because they have to. The most successful leaders use their ability to communicate effectively to build strong relationships, which makes them more effective at building teams and improving accountability. They don’t rely on holding a position of authority to influence others. Instead, they strive to forge genuine connections with people and find out what truly motivates them.
Managers Have Employees
Managers are more closely defined by their position of responsibility within an organization. They have clearly defined authority over their direct reports. While good managers usually have strong leadership skills, their relationship with their teams is often fundamentally different. As employees, team members often have little choice about whether or not to follow their manager’s guidance. Their interactions are primarily transactional, with the manager making a request and the employee carrying it out. If a manager also happens to possess the necessary soft skills to build trust and strengthen relationships within their team, they can boost engagement and create a healthy work environment. On the other hand, if the manager is an overbearing taskmaster who relies on their authority to compel their employees, they will struggle to retain talent.
Innovation: Change Agents or Status Quo?
Leaders Are Change Agents
In today’s fast-paced business environment, companies have a lot in common with that oft-repeated (and sometimes true) saying about sharks: if they stop swimming, they’ll die. When an organization fails to innovate, it can quickly find itself falling behind competitors, missing out on the latest technology trend, or losing sight of what its customers want. Effective leaders excel at identifying opportunities and taking risks that can transform a business. They understand that the strategy and processes that built a company might prevent it from scaling beyond a certain point, so they’re not afraid to question whether the tried and true methods that got results in the past make sense for the future.
Managers Preserve the Status Quo
Of course, there’s something to be said for stability. Managers are often tasked with implementing processes, which makes them far more averse to risks and disruptions. While they may be less willing to take chances, that’s not necessarily a bad thing if the organization is already running smoothly. Good managers can bring a measure of predictability that gives people the space to work without the anxiety associated with constant change. When an organization does undergo radical change, having effective managers in place who are committed to making that change a success is absolutely critical.
Vision: Long Term or Short Term?
Leaders Focus on the Long Term
Leaders have a different time horizon than most people. They don’t just think about where a company is today or where it could be tomorrow, but also what it could look like five or ten years from now. This ability to think long term is critically important for an organization’s growth and success. That’s because the seeds of future success need to be planted in the present. Much like a great chess player, good leaders can think multiple moves ahead. This allows them to play out a variety of scenarios and formulate solutions to future challenges long before they present themselves. Whether it’s investing in researching new products, making strategic acquisitions, or taking precautions against potential risks, successful leaders work hard to make sure they know what’s over the horizon.
Managers Focus on the Short Term
Thinking ahead is important to building long term success, but an organization that neglects day-to-day business demands isn’t going to survive long enough to reach that promising future. Managers are essential to meeting short term objectives, which can often be quite complex. Handling the logistics of immediate business needs requires a degree of focus and attention to mundane detail that doesn’t come easily to future-oriented leaders. On the other hand, a preoccupation with short term needs can leave a company unprepared for future changes, so it’s vital that the short term incentives of managers don’t become the dominant mode of organizational thought.
Development: Potential or Skills?
Leaders Develop Potential
The best leaders recognize good talent when they see it and understand that helping others reach their potential is hugely beneficial to an organization. They are often natural teachers, providing guidance and advice that allows people to develop their skills and take advantage of new opportunities. Since leaders tend to have a comprehensive view of an organization, they see the benefit of building competencies and handing high-potential candidates new responsibilities and challenges that allow them to grow.
Managers Develop Skills
Managers are often evaluated on the performance of their direct reports, so they have a strong incentive to only encourage development that helps people do their jobs more effectively. While this can help to build high-performing teams, it’s also likely to frustrate high-potential employees looking to grow beyond their current position. They may also see the time employees devote to developing new skills as time they’re not using to fulfill tasks. This narrow view of development might help managers to meet the organization’s short term objectives, but it will likely result in increased burnout and turnover as employees feel like they have to leave in order to find new opportunities.
A strong and versatile organization should have a healthy balance of leaders and managers. While leaders can provide inspiration and strategic vision, managers are essential for building and maintaining the solid foundation that leaders need to excel. In small to medium-sized organizations, many people will often be called upon to provide both leadership and management expertise, which requires a special combination of skills. As a company grows, there are more growth opportunities that allow high-potential leaders to move into more strategic positions while increasingly proficient managers handle day-to-day business demands.
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A lifelong serial entrepreneur and community leader, Mark Stagen, Founder of XLN, started his first company at age 15 and hasn't looked back. Since then, he’s founded, and later sold, several successful companies, including Telecore and Emerald Health Services, which have generated over $1 billion in combined revenues. Mark also founded the Youth Business Alliance, a non-profit organization that works with High Schools in economically challenged areas to educate, motivate and inspire the students on business, entrepreneurship and career development.
Mark has received numerous business and community awards including: EY Entrepreneur of the Year and Inc. 500. He is actively involved in YPO and has served in many leadership roles including Chapter Chair and Regional Chair. Mark received his BA in three years from Yale University, was a member of the Yale Football Team and is an Adjunct Professor of Entrepreneurship at the USC Marshall School of Business.