Leadership vs management: how do you tell the difference?
Leadership and management have some overlapping qualities, so sometimes the differences between them are blurred.
Whether you are a CEO, a business owner or a line manager, you will need to apply both management and leadership.
What are the differences between the two?
The fast and clean way to tell the difference between management and leadership is to examine how and why each deploys leadership.
Management is a functional leadership role. It is process oriented, and concerned with managing the productivity of a department or departments.
Managers apply leadership, but mostly as a tool to maintain functional processes of their team, including:
- Hard skills
- Technical skills
- Operational skills
Managers are typically present oriented and manage short term forecasting.
Leadership is an executive role. A leader centers their efforts on building shareholder value by advancing the interests of the entire enterprise, tribe or team.
Leaders are tasked with both the short term and the long term health of their organization or enterprise.
Leaders apply more abstract and intangible skills to lead, including:
- Emotional intelligence and soft skills
- Critical thinking
- Taking charge
- Vision
- Brand development
- Foresight and forecasting towards future
- Building business goodwill
Let’s look at the difference between how leadership roles and management roles are structured for deeper insights. First a bit about my background and credentials.
About the Author and Course Creator
Larry LaFata is a talent development specialist and the founder of modernleadershipcenter.com and defineyourcareer.com.
He has a unique ability to synthesize research and innovation into organized, usable concepts. This provides clients with streamlined leadership skills training and employee development solutions they can implement quickly.
After 30 years experience working with Fortune 500 companies, Larry turned to his passion: leadership development and talent development. The core of his course creation approach is customized self-assessment and skills development templates. No psychometric tests or psychology assessments are ever used.
Larry has authored: Employee Development Plans, Employee Rewards Programs, Career Planning, and a new Leadership Development Program.
His mission at The Leadership Development Center is to better humanity through innovative talent development strategies. His continuing efforts in this field keeps him in the forefront of thought leadership in the industry.
The two kinds of leadership roles: functional and executive
There are two kinds of leadership roles in any business, team or organization: functional leadership and executive leadership.
The differences of leadership between management and executives are explained visually in the Venn diagram below.
You’ll note how functional skills are centered in employee and overlap to management. Executive leadership and emotional intelligence are centered in executive leaders and to some extent management.
How functional leadership, management leadership and executive leadership overlap
This Venn diagram gives you a visualization of how functional leadership and executive leadership overlap.
- Higher levels of executive leadership require more intangible skills, such as vision, branding and emotional intelligence maturity
- Management overlaps both the functional leadership and the executive leadership skills, and can benefit from soft skills, leadership and mentoring.
Best practices for leadership training should reflect these differences between functional and executive management.
You can find out more about these 3 phases of leadership training and development here:
Functional leadership roles
Functional leadership roles are typically department managers, supervisors and lead employees. They employ leadership to carry out specific functional tasks for one audience, line of business or task set.
Managers are functional leaders who do use leadership skills, mostly as a tool to maintain the smooth operation of their functional processes.
Functional leadership roles typically interface with specific individual audience silos, for example:
- Customer service department managers
- Sales managers
- Credit and collections manager
- Guitarist in a band
- Offensive coordinators
- Foreman
- Nurse
- Sergeant
- Court clerk
- Pitching coach etc.
Because they only address one primary function or audience, functional roles are not always considered leadership roles. However many of them are.
Sales managers, customer service reps and HR for example. All involve leading their audience.
For minor functional leadership roles, you or your organization may be missing a huge opportunity for value creation if you are not developing these single silo leadership roles.
Developing the leadership skills of these first line and mid-level operational roles can literally raise the asset value of an entire organization.
Executive leadership roles
Executive leadership roles typically manage functional leaders to build organizational value.
Their primary responsibility is to build shareowner and stakeholder value. Their every action, decision, and hiring move is centered around building the value of the entire organization.
They apply leadership to govern, oversee and bring together multiple managers, divisions, silos and departments.
Note: The Chief Executive leadership role may overlap with some functional leadership roles such as hiring and deal making. However the difference is they must deploy leadership skills to be the prime vanguard of an organization’s vision, culture and brand.
In some C-Level roles, such as Chief Financial Officer (CFO) or Chief Information Officer (CIO) though they work in individual functional silos, their function affects across the entire organization.
Effective executive leaders use the 4 components of leadership skills to manage and lead multiple audience silos.
Executive leadership roles include:
Chief Executive Officer
President and Vice President
Directors
Captain
Business Owner
Hospital administrator
Mayor
Head Coach
Chief executive leaders in smaller companies and small to medium sized business owners may need to manage their own functional roles, such purchasing, hiring and selling.
Leadership vs. management: avoiding leadership vacuums
A managers priority is to maintain productivity and output. They use leadership as a tool to better manage that process.
However they need to be careful to not get too far in the weeds of production, where they neglect or mistreat their employees. This can lead to a leadership vacuum.
Many executive leaders and CEO’s falter by spending too much energy on their functional roles, while neglecting the intangible vision and branding components of executive leadership.
This can result in leadership vacuum. An example is Boeing.
They neglected their workers and unions and quality control suffered, causing airplane malfunctions. The Fortune 500 company’s stock lost 30% of its value in 2024.
Avoiding leadership vacuums requires vigilance on the part of any leader, whether a manager or an executive.
Developing your functional and executive leadership roles
Leadership roles are the most powerful and effective vehicle you have to deliver both management and executive leadership.
Craft the roles as simply as possible so as a leader you can maintain high standards while being unencumbered by ‘red tape.’
Developing strong roles are one of the key components of management leadership training and development.
“Leadership development is the expansion of audience influence skills through a functional or executive leadership role.”
Developing effective functional and executive leadership roles is the key to your own success and that of your organization as an executive leader or manager.
Summary of the differences between leadership vs management
The differences between management and leadership can be summed up in two concepts:
- Function: Managers have more of a functional role to maintain productivity, while leadership has more of a softs skills and emotional intelligent role to develop intangibles such as vision, brand and company image.
- Responsibility: Managers are typically tasked with a department or silo, while leadership is concerned with the well being and building of value for the entire enterprise.
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