Some questions have easy answers and some do not. One of the most difficult questions in business is ‘what is the difference between leadership and management?’

It is clear that they are different things. It is also clear that businesses need both. There is no successful business that I know of that got there by concentrating only on management or only on leadership. It is also apparent to me that most leaders are also managers and that most managers need to be leaders at some stages (though many are not).

One widely agreed distinction is that leaders generally concern themselves with where the business needs to go whilst managers are more concerned with how the business will get there. To put it another way, leaders create the map and managers follow it. Of course, things are never that simple.

Leadership may be a choice and an attitude of mind. Leaders are not necessarily appointed into management structures – they exist everywhere. Steven Covey suggests (http://www.stephencovey.com/blog/?p=6) that the ability to become such a leader is a choice that any person can make; any parent or grandparent, any teacher, any coach, any co-worker, and friend.

He suggests four qualities of a good leader –

• To inspire trust.

• To clarify purpose.

• To align systems.

• The fourth, he says, is the fruit of the other three—unleashed talent.

When we talk about Business Leaders, we may be talking about people who have both leadership and management skills. In order to be ready to lead a growing company, you need to have the foundations in place. Just as a house or a factory needs to be built on solid foundations, so do business leaders. Business leaders seldom arrive fully formed.

They learn that leadership has three levels –

Leadership of self

Personal leadership comes from taking responsibility for your own development and behaviour and, most importantly, from taking action. Action is the step that achievers take and dreamers do not.

Leadership of teams

Teams are an essential element of leadership in business. Without them, little that is worthwhile can be done. So, armed with your own direction and goals, you can begin to build your extended team, finding the right people to perform roles that complement your own skills and, thus, extending the capability of the unit over the individual. Not everyone in your team will be a direct employee, indeed, in today’s business, very few may be. Thus communication and motivation are important elements in creating a high performance team. Getting the most out of the team needs clarity of goals, acceptance of input and clear decision-making.

Leadership of businesses

When an entrepreneur sets up a business, the team may be small and easy to control. As the business grows, there will be a time when the team becomes too large to manage as a single entity and the business becomes a team of teams. The bigger it grows, the more teams there are within the business. They may become divisions and even business entities in themselves. The business now has many leaders at many levels within it. Someone, however, carries the responsibility for leading the whole business and is accountable to shareholders, to staff and to customers for the performance and ethics of the business.

Leadership is about effectiveness – about doing the right thing, even when it might appear that there are easier choices. Once the right thing is identified, managers can be asked to do it right – to get there in as efficient a way as possible.

Leaders and managers must exist in the same body. Without both sets of skills and attributes, businesses will not develop properly and the right balance of effectiveness and efficiency will not be struck.

Business leaders therefore need to know when to lead themselves and when to let others do that.

By Brian Chernett
May 2009

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This article first appeared in Freshbusinessthinking.com’s Virtual Director Newsletter.
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