The Similarities and Differences Between Leadership and Management

Every business needs strong leaders and managers. While effective leadership and management are vital for an organisation’s success, these roles are not always understood. The terms ‘leadership’ and ‘management’ are often seen as synonymous, but leaders and managers have different roles.

Are you keen to pursue a leadership or management career? Then, you’ll need to understand the differences between the two.

Taryn Pontifex, Chief Operating Officer at MOVE Bank, has more than 25 years of experience in finance and has worked her way into leadership roles. In this article, she helps us answer the questions: what is leadership and what is management? We explore the differences between leadership and management, their similarities and how to discover which role is most suitable for you.

What is the difference between leadership and management?

“Leadership and management are often used interchangeably, but they have distinct roles and functions in an organisation,” says Pontifex.

“Leadership is more aligned to setting a vision, inspiring and motivating people to achieve it and providing direction. It involves guiding others towards a common goal. Management is primarily concerned with implementing that vision, organising resources, delegating tasks and ensuring that day-to-day operations run smoothly. It involves planning, coordinating and controlling processes to achieve specific goals efficiently.”

Here are some key differences between leadership and management:

Vision and execution

Leaders: Focus on setting a vision, inspiring others and driving change. They are often strategic thinkers who anticipate trends and guide the organisation towards long-term goals.

Managers: Are concerned with executing plans and organising resources. They are more operationally focused, ensuring tasks are completed efficiently and effectively.

Innovation and stability

Leaders: Embrace innovation, take calculated risks and encourage creative thinking. They seek opportunities for growth and improvement.

Managers: Maintain stability and consistency in operations. They are concerned with risk management and adherence to policies and procedures.

Focus

Leaders: Value building relationships, developing talent and fostering a positive culture. They empower and motivate employees.

Managers: Concentrate on assigning tasks, monitoring performance and ensuring deadlines are met. They provide direction and feedback.

Long-term versus short-term

Leaders: Take a long-term view, considering the organisation’s future sustainability, growth and competitive advantage. They adapt to changing environments.

Managers: Operate with a short-term perspective, focusing on immediate goals, deadlines and operational efficiency.

Communication style

Leaders: Communicate a compelling vision, values and strategic direction. They inspire and persuade through tools such as storytelling.

Managers: Communicate operational plans, expectations and performance metrics. They focus on clarity and accuracy and on ensuring tasks are understood and executed efficiently.

Similarities between leadership and management

While there are key differences, leaders and managers share many similarities. “Leadership and management roles are similar in that they both involve guiding and/or directing individuals and teams towards specific goals and objectives,” says Pontifex.

Let’s explore some of those similarities:

1. Goal-oriented: Both leaders and managers work towards achieving organisational goals and objectives, aligning their efforts with the organisation’s vision.
2. Good decision-makers: Both leaders and managers are decision-makers. Leaders make decisions regarding the organisation’s strategic direction and managers make decisions regarding operational matters.
3. Strong communicators: Both roles call for professionals who communicate expectations, feedback and information clearly.
4. Team developers: Managers and leaders are responsible for developing and supporting their teams. They provide guidance, mentorship, training and opportunities for growth.
5. Problem-solvers: Leaders and managers must be proficient problem-solvers to address challenges and capitalise on opportunities.
6. Ethical professionals: Leaders and managers uphold ethical standards and promote integrity in their organisation. They demonstrate ethical behaviour and hold themselves and others accountable.
7. Adaptable: In any business environment, leaders and managers must be able to adapt and respond to change.
8. Customer-focused: Leaders and managers understand the importance of customer satisfaction and strive to meet customer needs and expectations.

What skills should leaders and managers have?

Pontifex says both roles are incredibly important to the success of an organisation. “Managers require skills that focus on planning, organising and coordinating, while leaders require skills that focus on influencing, motivating and the ability to develop long term strategies.”

Let’s take a deeper look at the skills required for each role.

Leadership skills

An effective leader must be able to envision the future, set a compelling vision and then help develop a strategic plan to achieve those goals. As mentioned, these professionals are skilled communicators who can inspire and motivate others. Empathy and strong interpersonal skills are also essential for leaders.

Navigating change is inevitable in any business setting, so leaders must be able to make strong decisions and adapt to change. Flexibility and resilience in the face of uncertainty are also key. Coaching and mentoring others to support their professional development is also an important skill for business leaders.

Management skills

Managers must be organised and efficient with their time as well as be able to execute their plans to achieve operational goals. An effective manager will be skilled at identifying, refining and optimising processes to increase efficiency and be able to manage budgets, people and other resources.

Communication is key for managers, who are responsible for delegating tasks and ensuring they hold themselves and others accountable for the outcomes. As skilled problem-solvers, managers identify and solve operational challenges, manage conflict and provide feedback to staff.

Who should become a leader or manager?

Are you a future leader? Or is management your calling? Your suitability for either leadership or management depends on your strengths, preferences and aspirations.

Leaders thrive in environments that call for visionary thinking, strategic planning and the ability to inspire and motivate others towards an organisation’s shared vision. Leaders love to be involved in innovation and creativity. Their change management skills are sought after to help lead a new product development team or drive organisational transformation.

On the other hand, managers excel in operational roles where their skills in planning, organisation and executing tasks are essential. They thrive in environments where strong processes exist. They love performance management and resource allocation, such as managing a project team or overseeing daily operations in a department.

Understanding your natural talents, communication style, problem-solving approach and career goals is a good idea to determine whether you are better suited to a leadership or management role.

How a postgraduate business degree can improve your leadership and management skills

Whether you aspire to be an inspiring leader or a highly competent manager, a postgraduate business course with leadership and management units will give you the expertise to lead an organisation or a team and help you achieve your career goals in today’s dynamic business world. Some key skills that you can develop include decision-making, team management, communication and business strategy.

With a relevant qualification, you can work towards becoming an authentic leader while learning and applying different leadership styles. As a student, you can graduate well-equipped for contemporary management and leadership roles.

Below are some postgraduate courses in leadership and management from Australian institutions.

Take the first step in your leadership or management career

Studying for a postgraduate leadership or management degree can equip professionals with the skills and knowledge to become high-performing leaders and managers. If you're ready to elevate your career, explore a wide variety of courses offered by top universities in Australia.