Leader vs. Manager: Is There a Difference?

Many aspire to be a leader. Others regard themselves as a leader. But in reality, many of 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:

Setting DirectionPlanning and Budgeting
Aligning PeopleOrganizing and Staffing
Motivating PeopleControlling and Problem Solving

Setting a Direction vs. Planning and Budgeting: a leader sets the direction of his company. The direction does not need to be brilliantly innovative. Instead, it has to serve its constituencies’ interests. The leader needs to translate them into a real competitive strategy. On the other hand, the managing aspect will be to create plans and budgets to 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 to be empowered while 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 some 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 set up and implement these processes successfully.

For many startups today, the co-founder or the CEO needs to wear both hats. However, knowing the differences between the two roles will help him prioritize the most critical tasks at that particular stage of the company’s growth. It’ll also help him evaluate his strengths and leverage help or resources in areas that need help.