The words ‘leadership’ and ‘management’ are often interchangeably used but they actually mean different things and its important to understand the distinction.

Here are definitions of these two words:

Leadership is the creation of a vision about a desired future state which seeks to enmesh all members of an organisation in its net.

Management, tends to involve a pre-occupation with the here and now of achieving goals. Goals follow vision and never the other way round.

To understand whether you are a leader or not, think about your role in terms of a metaphorical sheet of paper. If your role involves working with a blank sheet of paper and you have to create new ideas, then you are likely to be creating a vision. That is leadership.

On the other hand, if you have been given that metaphorical sheet of paper and it is already filled with instructions, outcomes, parameters, goals, constraints, conditions, etc and your role is to work on the ‘here-and-now’, then its quite likely that you have been asked to manage the completion of a task. That is management.

Its easy to confuse the two terms and its natural to use them together. In an organisation, a manager is defined as somebody who has people allocated to report to them. That is true if you are a line manager, a project manager or a program manager.

So by definition, a manager can be defined as somebody who is assigned a position of leadership in an organisation and most definitions of management incorporate a notion of leadership. Its obvious that the two concepts are difficult to entangle.

Take a look at your CV or LinkedIn profile. I expect that you may have used ‘leadership’ where ‘management’ would be more appropriate; ‘leader’ where ‘manager’ would be more appropriate; and ‘lead’ where ‘manage’ would have been more accurate. Don’t feel bad about this – the job specifications put out by recruiters also tend to mix things up.

In many organisations, tasks have been designed to be standardised, routine and controlled. That is how we achieve operational efficiency. But this means that the dynamic, visionary, inspirational aspects of leadership may become redundant. In this situation, you just have to ‘manage’, make sure tasks are completed and I hate to use this phrase, but ‘tick-the-box’ once the task is done.

You might have a role like this – for example, you may have the responsibility to ensure that your team calculates the end of day credit risk and then report the numbers. Then you do the same the next day, and the day after that, and every day after that forever. That is management – not leadership, certainly not in the visionary sense of the word.

So leadership is clearly more than the execution of administrative functions.

For those of you who are familiar with the work of Simon Sinek, leadership exists in the area that he calls the ‘WHY’, whereas management is more appropriately placed in his ‘WHAT’ and ‘HOW’ areas.

Managers do not automatically become leaders. Managers do not become leaders just because they have job titles such as ‘team leader’.

An organisation needs to have leaders and managers. An organisation needs to have both leadership and management. An organisation with no management and only visionary leaders won’t be able to get things done – it will result in a commune rather than a sustainable business.

Be content if you are a manager – your role is very important. You are there to ensure that the vision comes to life and a strategy is executed. By the same token, if you truly are a leader, then be sure to step up and create the vision and not just be a senior administrator.

In my coaching of with high achievers from the investment banking industry, highlighting this distinction has been a game-changer for most of them.

A simplistic model would suggest that ‘leadership’ (with vision) happens at the top, ‘management’ happens in the middle and ‘doing’ happens’ everywhere else. Although its true that you get to be a visionary at a micro level wherever you sit in an organisation.

In fact, its more important than ever to be a leader; to be a visionary whatever your grade. If you think about the standardised tasks that you do, you’ll eventually get them automated, or you’ll get bored, or you’ll get overwhelmed. As soon as either of these happen, then your days are numbered doing that. You’ll have to move onto something new. Conversely, if you are able to think about a different perspective, then you get to create something new. Even creating a new process can be thought of as visionary.

Leading, and by that I mean creating a vision is exciting – because you are creating. It’s fresh and dynamic and energising.

There is sometimes a negative connotation with the word ‘managing’. If you ask somebody who appears to be downbeat, “how are you?” – they might reply with, “I am managing” as in coping. I think that is often true in the workplace – people are just about ‘coping’ when they put their manager hat on.

I’ll finish off with two phrases used when people in an organisation complain. They may say “we need effective management” and they may say “we need great leadership”. They are clearly different. Leadership and management are different.

What do you think?

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A little bit of info about me..

I am a professional coach and some of my clients call me their ‘trusted adviser’. I mentor and guide leaders from the investment banking and FinTech industries so that they are able to make an impact and create a legacy.

I started my career within the investment banking industry during the mid-1990s. I have been fortunate to have worked in some of the top firms and with many amazing high-achievers.

My clients have already achieved conventional success and they always inspire me. That’s my pre-condition to work with them. In return, I draw the best out of them and inspire them to achieve success beyond conventional success – exponential success – so that they can create an extraordinary impact.

And they will always get there faster and easier than they thought possible!