Leadership vs. Management: What type of CEO are you?

Leadership and management are like two circles on a Venn Diagram. Each requires a different focus, skill set, and priorities, with some overlap in the middle.

How much an executive needs to inhabit that in-between space depends on the size and direction of the company, the skills and competencies of the individual and team, and many other factors. Knowing when to lead and when to manage is essential for a CEO’s success.

How can CEOs authentically navigate the grey area between leadership and management? Let’s explore.

Leadership vs. Management: What’s the difference?

Carolyn Strauss, a former CEO and now a Vistage speaker, contrasts leadership and management like this: ‘Leadership decides how and why your company exists and where you want it to be in the future. Management takes the vision, mission, and purpose developed by leadership and asks, ‘How do I support this vision through the processes and people under me to accomplish our work effectively and move the organisation forward?’

The differences between leadership and management don’t end there. A good leader isn’t always the best manager, and vice versa.

What does a good leader do?

According to Scott Beebe, owner of My Business on Purpose, leaders are often less involved in day-to-day tasks. Leadership sets the direction for a company and ensures ‘that meaning gets embedded into the tasks and systems.’

To do this well, leaders must communicate in ways that inspire and motivate people inside and outside the company. ‘My favourite definition of a good leader is someone who’s got a vision that’s so compelling, other people want to follow them,’ says Strauss.

A good leader will set clear expectations, delegate tasks and help team members develop the skills necessary to reach full potential. Additionally, leaders make tough decisions and shoulder more responsibility for overall performance.

Self-aware leaders who remain calm and composed during challenging situations and are willing to learn from others will be both highly respected and influential.

What does a good manager do?

Management requires developing, organising, and overseeing predictable and repeatable systems and processes.
Good managers plan, organise, lead and maintain tasks effectively to meet specific objectives with the help of employees under their supervision.

‘Managers ensure that the right things get done at the right times by the right people,’ says Beede. A good manager must possess both hard and soft skills.

Like good leaders, good managers must foster open communication with their teams. ‘Managers have to be okay communicating the needs of the work under their purview in the company and support the initiatives set forth by leadership,’ says Strauss.

How is leadership different from management? 

Leadership is about creating a path; management is about following that path. Leaders must develop goals, drive change and empower people to make the company’s vision a reality. The work of management is often systematic as managers primarily oversee day-to-day activities, planning, and staff coordination.

The more significant human element to leadership means that the role is often less predictable than that of a manager. Beebe compares it to living by the ocean instead of a lake.

‘In leadership, there is much more volatility possible on any given day. When you walk into the world of leadership and out of the predictable world of management, you have to learn how to bring that level of predictability to the people world, and it’s really tough,’ he says.

Understanding the Roles of Leadership and Management

Each day, leaders and managers work to answer different questions. Strauss explains that leaders must figure out ‘why you do what you do, why you exist and where you exist going into the future.’

It’s the manager’s responsibility, on the other hand, to determine the how and the when. A good manager is more task-focused than a leader because they must organise resources, processes and people. Leaders focus more on creating purpose, meaning and alignment.

The positions also carry differing amounts of accountability. Beebe believes that ‘leadership should be fundamentally shouldering the burden of the organisation.’ When something goes wrong, the responsibility falls on top leadership. Managers carry less results-oriented pressure because they are located lower in the hierarchy.

While ‘manager’ implies a specific role and set of responsibilities, ‘leadership’ is a quality that can be developed. ‘Managers can and need to be leaders, but leaders do not always need to be managers,’ says Strauss. How much a leader manages varies depending on factors such as company size and vision, as well as individual strengths.

As CEO or owner, do you need to be a leader or a manager?

Each person brings their own skills and experience to a company. One may naturally gravitate toward the qualities of a manager and another toward leadership.

In small and midsize businesses (SMBs), the CEO must frequently encompass both skill sets. This is why CEOs often find themselves in the centre of the leadership vs. management Venn Diagram.

CEOs at SMBs are often the founders and owners, with strong personal ties to the company’s vision, success, and employees. These CEOs can uniquely inspire and motivate employees but must also manage business resources and operations.

‘As a CEO of a small or midsize business, you’re not able to divorce leadership and management because there are always things within your local sphere that require management,’ says Beede. One moment a CEO must lean on leadership skills to inspire their sales team to reach their goals; the next, they may need to decide which software to purchase.

Developing leadership and management skills, along with the awareness of which skills are needed in which context, will help maximise a CEO’s effectiveness and impact.

Best of both worlds

Is the CEO a leader or a manager? The answer is yes, and the good news is that both skill sets can be learned.

Leaders and managers are both critical to an organisation. Leaders must inspire others to believe in a company’s mission, objectives, and values. A manager needs to supervise the tasks required to ensure goals are met.

CEOs are uniquely positioned to leverage the qualities that make a great leader and a great manager. They can motivate and instruct employees to hit targets and realise the company’s vision while creating happier, more productive workplaces.

This article was originally featured in the Vistage Research Centre.