Many aspire to be a leader or regard themselves as a leader. But in reality, these leaders are spending more time managing than leading. Change management expert John Kotter observes that most companies are over-managed and underled. Why such a comment? Kotter lists out three significant differences between a leader and a manager. They are:

Leader

Manager

Setting Direction Planning and Budgeting
Aligning People Organizing and Staffing
Motivating People Controlling and Problem Solving

Setting a Direction vs. Planning and Budgeting: a leader sets the direction of his company. These visions or directions do not need to be brilliantly innovative. Instead, it has to serve the interests of its constituencies and that which can be translated into a real competitive strategy. On the other hand, the managing aspect of it will be to create plans and budgets that will bring the company towards that vision or goal. Both are critically important.

Aligning People vs. Organizing and Staffing: a leader needs to communicate effectively and engage people of all levels in the company to the proposed vision. In the process, the leader has to convince his partners and followers in what ways they can be empowered. A manager steps in to provide efficient ways to execute the vision. Sample management questions would be: what structure is necessary to accomplish the mission? How to staff these structures with competent individuals? These are questions for a good manager.

Motivating People vs. Controlling and Problem Solving: achieving a vision requires inspired and energized people. Leaders do that by “satisfying basic human needs for achievement, giving a sense of belonging, recognition, self-esteem, a feeling of control over one’s life, and the ability to live up to one’s ideals.” While motivation is necessary, a company needs processes that are as fail-safe and risk-free as possible. A good manager needs to successfully set up and implement these processes.

For many startups today, co-founders or the CEO need to wear both hats. However, knowing the differences between the two roles will help him prioritize what’s required of him at that particular stage of the company’s growth. It’ll also help him evaluate what strengths he has, and how to leverage help or resources if either leadership or management is not his forte.


Content extracted from John Kotter’s article “What Leaders Really Do” in HBR’s 10 Must-Read on Leadership.

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