Understanding the Difference Between Leadership and Management

While managers can keep teams and departments in line and on budget, true leaders have the potential to propel a business to much greater success. Innovative business leaders steer companies toward profits, achieve stretch goals and encourage employee happiness.

To learn more, see the infographic below created by Brandeis University’s Online Master of Science in Project and Program Management.

leadership

Responsibilities of Today’s Leaders and Managers

What Do Managers Do?

Managers have a multifaceted job description, and they must be able to juggle a number of tasks simultaneously to keep their business running smoothly. Establishing objectives, goals and strategies for each achievement is especially essential. An effective manager should also organize and allocate work into manageable segments while delegating tasks to employees, manage teams and communicate decisions and analyze and appraise the performance of teams and employees.

What Do Leaders Do?

True leaders move beyond managing people. Leaders are loyal to doing what is right for the organization and the customer, and they encourage communication and collaboration from all levels. They also set and achieve high goals, create a trusting work environment and motivate employees through actions.

How Do Managers and Leaders Differ?

Managers and true leaders differ in numerous ways. Some managerial and leadership traits can overlap, but leaders tend to be more open-minded and innovative.

Managers focus critical evaluation only on employees, but leaders are more self-aware. They turn that lens on themselves on a regular basis.

Managers take little to no suggestions from employees, while leaders allow their employees to introduce and collaborate on new ideas.

Managers follow bureaucratic rules without exception, whereas leaders innovate to remove obstacles.

Managers assume all responsibility for their teams. However, leaders trust their teams to grow and shine. That’s why leaders take risks on giving workers new projects.

Managers react negatively to failure, but leaders understand that failure is common and see it as a learning experience.

Impact of Good Leadership vs. Poor Leadership

How Leadership Skills Pay Off

Effective leaders engage their workforce and reap the benefits. High employee engagement is linked to better financial performance. Earnings (EBIT) in companies with high engagement are a full percentage point more than they are in companies with low engagement. Total assets are often higher in companies with high engagement as well.

Engaged workers are also associated with higher earnings per share. Approximately 71 percent of employees who believe their managers could identify their personal strengths report feeling engaged and energized at work. And organizations averaging 9.3 engaged employees for every actively disengaged employee experience 147 percent higher earnings per share (EPS) compared to their competition.

Traits of Innovative Leaders and Managers

There are several major differences in what C-suite executives and workers rank as the most important leadership qualities. Executives rank transparency, accessibility and competitiveness higher, whereas workers rank decisiveness as a more essential quality. However, fairness and integrity scored top marks for both. And innovative leaders scored 25 percent higher than non-innovative leaders in managing risk.

How Poor Leadership Costs Businesses

Managers can have a huge impact on employee engagement levels. In fact, managers can account for up to 70 percent of the variance in employee engagement skills, but only 35 percent are actively engaged in their jobs. And only 33 percent of all American employees are engaged in their jobs as well.

Disengaged, unhappy and unmotivated employees can be costly. Organizations with the lowest levels of employee engagement have 48 percent more safety incidents, 41 percent more quality defects, 37 percent more absenteeism, 22 percent lower profitability, 21 percent lower productivity and 10 percent lower customer ratings.

Management issues can also play a major role in employee retention. Several common reasons why Americans leave their jobs include receiving a low salary with low benefits, having apathetic or unlikeable employers, feeling overworked and noticing a lack of recognition.

Up to 30 percent of American workers consider their managers to be lacking in diplomacy, leadership or strategic thinking.

Less than 20 percent of U.S. business leaders report confidence in having the leadership capabilities to execute their strategies. And only 18 percent are confident that their leadership teams display the behaviors needed to successfully deliver on strategic business priorities.

Leadership Development Strategies

The Most Important Leadership Development Priorities for Business Leaders Today

Almost two-thirds of business leaders rank developing leaders to drive strategic change as a top priority. Over half rank filling gaps in the leadership pipeline as equally important. And 45 percent rank driving organizational culture change as a top leadership development priority for their business.

The Best Practices to Improve Leadership and Develop a Talent Pipeline

Effective leadership involves aligning leadership strategy with business strategy while creating and documenting strategies for recruiting, retaining and developing leadership talent. Other leadership development strategies include empowering and encouraging the workforce at all levels, accepting change and engaging the entire workforce in new initiatives and incorporating social responsibility into business and leadership strategy.

An estimated 90 percent of companies worldwide have a leadership development training program but only characterize theirs as best in class. However, 31 percent of companies rate theirs as inconsistent and 12 percent rate theirs as underperforming.

After implementing leadership development training programs, many organizations noticed a positive impact, including a 114-percent sales increase, a 90-percent drop in absenteeism and a 71-percent increase in customer satisfaction.

Leadership training programs also improve critical skills. Approximately 95 percent of participants increased trust-building skills, 89 percent increased effective communication skills and 84 percent increased performance management skills.

Look through this infographic to learn more about the qualities that true leaders exhibit, the cost of poor leadership and the best practices for developing leadership talent.

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