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The Difference Between Leadership and Management

14 February 2017

Many an analytical mind has been put to the test to clearly define the difference between leadership and management. In its simplest form, their key function is held within their names: managers manage, while leaders lead.

Managers establish and maintain structure, processes and systems. Leaders—in many ways—think outside the realm of these parameters. Managers have a group of people that they oversee. Leaders have a group of people who are inspired to follow them.

With these definitions, sometimes the manager comes across as a dull, mechanical character, while the leader takes the charismatic and charming role that people aspire to be. The truth is, both functions are essential to the successful running of a business.

In terms of synergy, leaders can go a long way by understanding just how important the role of a manager is and learning to work alongside them. For managers, adopting some key elements of leadership can help improve their skills as a manager.

One key difference between managers and leaders?

According to the Harvard Business Review, a key difference between leaders and managers lies within their circles. Managers tend to create circles of power from their subordinates, whereas leaders create circles of influence. One way to ascertain whether an individual is perceived as a manager or a leader is by the amount of people who don’t report directly to them that seek advice. A leader will inspire people outside of their circle to approach them for guidance and advice, based on their traits and actions within certain situations.

“People ask the difference between a leader and a boss. The leader works in the open, and the boss in the covert. The leader leads, and the boss drive.” —Theodore Roosevelt

What key leadership skills can a manager adopt?

People Focused

In a way, managers often view their employees as cogs in a machine, working harmoniously to achieve a specific goal. This makes things more difficult to manage, particularly when a part of that ‘machine’ decides to resign and needs to be replaced.

A leader doesn’t tend to have this outlook, viewing people as an important resource. Good leaders are often found checking in on satisfaction and welfare of employees and encouraging them to make their role into their own.

Managers who adopt this same line of thinking are guaranteed to experience a higher level of productivity from their workers, which naturally contributes to a company’s overall success.


An authoritarian manager-worker relationship can result in a ‘do as I say and don’t question it’ environment, while true leaders operate in the opposite way.

Leaders depend on their employee’s knowledge and, as such, don’t believe they have all of the answers. They are often eager to encourage employees to work in a way that suits them, adopting a ‘you know your job best’ attitude. Acknowledging that each employee has their own unique skillset and enabling them to succeed will create an equal and respectful working culture.

There is commonly a fear among managers that admitting to not know everything is a sign of weakness, which will result in disrespect—but that’s simply untrue. Managers will do well to maintain a level of humility, without losing their position of power and authority.


A manager’s role can often be focussed on the short-term goals or completing the project in hand, ensuring it runs smoothly, but not always taking the ‘bigger picture’ into account. Whilst this is undoubtedly an integral part of the role of a manager, a leader will be focussed on making strategic decisions that correlate with future business goals.

Managers can often be stifled by budgets restraints and not see the value in an investment that doesn’t deliver immediate returns. On a strategic level, a leader will understand the Return on Investment (ROI) journey and the future rewards that a strategic investment can bring a business.


Managers can tend to go along with the status quo and take an ‘If it’s not broken don’t fix it’ stance, and for a business to successfully grow and remain competitive, there needs to be constant innovation. A leader will strive to challenge the status quo and question if current processes are the most effective solution, and if not, implement change.

Introducing new technology and processes can be met with apprehension as it will often mean additional training and an element of risk. Leaders will not only strive for business innovation but also cultivate a culture of innovation within their team, inspiring others to seek innovative business solutions.

Leaders Inspire and Cultivate Growth

One key difference that sets leaders apart is their ability to inspire. It draws people to them. A manager doesn’t necessarily have to be the next creative genius, bursting with entrepreneurial ideas that will change the world, but they should recognise they have the resources at their fingertips to do so—their team.

If they are able to tap into this talent and encourage and inspire growth within their team members, they may find themselves rising up the next generation of leaders. A leader will not be threatened by another influential individual and would encourage a strong, talented team for the success of the business.

Leaders and managers, although different, are both quintessential roles within a business. Whether your skills naturally lend themselves to managing or leading people, you will do your role best by learning and/or understanding skills of the other.

Now that you know the difference between leadership and management, what next?

Become a better manager AND leader

Southern Cross University Online’s Master of Business Administration and MBA in Managing and Leading People provides students with the theory behind what it takes to both lead and manage within a business environment, and strategies to help implement that theory. Units like The Positive Leader, Organisational Behaviour and Corporate Governance for Managers offers learnings that will help bolster your skills for future management and leadership roles.

Find out more about SCU's MBA Program

Speak to an expert Student Enrolment Advisor on 1300 589 882 for more information about our Master's programs.