Management and Leadership – Which is Better?

Do you manage your business or do you lead it?  Management and leadership are both necessary; if you’re the owner, chances are you do both.



What’s the difference between management and leadership?


Managing involves things like budgets, cutting expenses, and forecasting people and equipment needs. Leading is setting vision, articulating the vision to everyone, influencing employees, and monitoring external factors namely competition and the economy.


Check out the chart below and enter the percentage of time you spend in each area.



Worksheet: From Manager to Leader


Estimate the time you spend in each of the 6 management and leadership activities below. The boxes should total 100%.





Planning: _____%


  • Creating and managing to a budget
  • Establishing goals, quotas, & action plans
  • Forecasting people, resource, & equipment needs
  • Communicating implementation plans


Organizing: _____%


  • Determining how people & resources should be structured
  • Creating roles & job descriptions
  • Delegating projects & tasks
  • Establishing standards of performance
  • Monitoring & tracking errors/error rates
  • Providing technical training


Controlling: _____%


  • Monitoring & observing performance, sales figures
  • Cost control, expense cutting
  • Creating accountability, followup, inspecting
  • Rewarding or disciplining performance




Setting Direction: _____%


  • Determining goals & direction of unit
  • Deeply understanding economics, competition, customers, & environment
  • Creating & articulating a clear vision
  • Influencing employees
  • Leading by example


Aligning: ______%


  • Representing the organization to suppliers, management, peers, etc.
  • Getting people to believe the message; involves talking to a lot of people
  • Regular meetings, newsletters, charts in the breakroom, etc.
  • Fostering cooperation between work groups
  • Negotiating the resolution of conflicts


Motivating: _____%


  • Articulating the vision
  • Regularly involving employees
  • Building commitment, identity, pride, & spirit in the organization
  • Developing employees’ abilities
  • Coaching, providing feedback
  • Recognizing & rewarding





What’s the right mix of management and leadership functions?


If you want to grow your company, you’ll want to be spending most of your time in the leadership side. If you’re like most business owners I work with, you probably engage in more management activities than leadership activities. It’s difficult to let go of the management side but if you spend most or all of your time there, you’ll effectively halt your company’s growth.



Depends on your company’s size


When your company’s smaller, you’re more likely to do more managing. As you get to a certain size you should put a plan in place to start developing a management team (see my blogpost on this). Beginning to delegate the management functions will help you break free from the day-to-day. Over time you’ll be able to delegate more management functions and move yourself into mostly leadership functions.



The mix of management and leadership also depends on complexity


If your business is more complex, it’ll be more important for you as the business owner to operate on the leadership side. If you’ve got multiple locations, employees operating in different geographic areas, B2B/complex businesses as clients, multiple complex processes such as those in manufacturing, or high-value materials, it’s critical to your company’s growth that you stay dialed in to the external environment—the economy and the competition, and the internal workplace—inspiring employees and insuring they’re on board with the vision.


Someone said “The main difference between leaders and managers is that leaders have people who follow them while managers have people who work for them.”  I think the more profound, practical difference is whether you want your company to grow.



Management and leadership—the difference between growth and no growth


Only doing management functions could maintain your company at its current profit level (and it may not even do that).  If you want your company to grow, you absolutely must engage in plenty of leadership functions.



Inspire Results Business Coaching

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