Career progression in most firms often involves promoting employees into managerial positions. But does that make them automatically eligible for leadership positions? What is the difference? This piece in the Economist attempts to answer:
“Managers, according to an influential article by Abraham Zaleznik in the Harvard Business Review in 1977, value order; leaders are tolerant of chaos. A later article in the same publication, by John Kotter, described management as a problem-solving discipline, in which planning and budgeting creates predictability. Leadership, in contrast, is about the embrace of change and inspiring people to brave the unknown. Warren Bennis, an American academic who made leadership studies respectable, reckoned that a manager administers and a leader innovates.
.. The difference between managing and leading is not just a matter of semantics. Research by Oriana Bandiera of the London School of Economics and her co-authors looked at the diaries of 1,114 ceos in six countries, and categorised their behaviours into two types.
On their definitions, “leaders” have more meetings with other c-suite executives, and more interactions with multiple people inside and outside the company. “Managers” spend more time with employees involved in operational activities and have more one-to-one meetings. Leaders communicate and co-ordinate; managers drill downwards and focus on individuals. The research suggested that firms that are run by leaders perform better than those run by managers.”
Whilst often leadership roles seem sexier, the article notes the importance of both, especially depending on the context and often requires a balance of both skills in the same individual:
“The capacity to inspire others and to head into uncharted waters does become more salient the higher you rise. But management skill does not become less important. Dr Bandiera and her co-authors concluded that although CEOs who displayed the behaviour of leaders were associated with better firm performance overall, different firms may require different types of bosses. Some would be better off with “manager” CEOs. And firm performance is independently correlated with other things, too, including the quality of management practices.
The second unhelpful by-product of the debate about managers and leaders is that it tends to separate people into one camp or the other. In fact, bosses must combine the qualities of leader and manager. Just as it is hard to motivate people if you are highly efficient but have the inspirational qualities of feta cheese, so it is not much use laying out ambitious visions for the future if you don’t have a clue how to make them reality. You need to turn the dial back and forth—from strategy to execution, change to order, passion to process, leader to manager.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.
