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Management v leadership: know the difference for survival

Release Date

10 December 2013

Some people wrongly regard the terms ‘management’ and ‘leadership’ as interchangeable ... but they’re not. Because both are necessary for an organisation’s success and sustainability, it is important to understand the difference. The roles of both were explained at a seminar conducted by the Australian Institute of Management (AIM) in Sydney on 18 September 2013.

What is the difference between them?
Professor Emeritus Roger Collins, from the Australian Graduate School of Management, described management as using technical skills and convergent and linear thinking to analyse and solve problems, or in other words ‘dealing with today’. Good managers ‘know all the answers’ and thrive on continuity.

Leaders, however, use adaptive strategies and divergent and associative thinking to assess their organisation’s position and take it in new directions when required. They acknowledge that they don’t have all the answers, but by identifying the correct important issues they can frame the right questions to obtain them. They see discontinuity as creating opportunities and possibilities.

Collins said that both good management and good leadership are essential, with the need to find the right balance between them. Some executives are great managers but poor leaders, and vice versa.

Requirements of effective management
Management relies on structural role influence, via policies, job descriptions, procedures, rewards and feedback. Its most important requirements are:
  • clarity of purpose, strategy, role, contribution, systems and processes
  • planning and allocating resources, funding, information, etc
  • commitment to quality and excellence
  • external coordination, monitoring and representing
  • accountability for individual, team and business unit performance, and providing feedback to each of them.
Requirements of effective leadership
In contrast, leadership relies on personal behavioural influence, via conversations, images, inspiration, engagement, caring and providing ‘futures’. It is much more of a psychological contract than management. Its most important requirements are:
  • task-oriented clarifying, by setting and communicating direction
  • relations-oriented support, by developing, recognising and empowering
  • communicating and living agreed values
  • external monitoring, networking, sensing and influencing.
Another distinction between management and leadership is that good managers have the ability to lift employees’ job performance from unsatisfactory to satisfactory (which Collins described as ‘the compliance zone’). Good leaders, however, can move employees’ performance from satisfactory to outstanding (‘the volunteer zone’, or as described in other studies, discretionary effort). Collins illustrated this point with an analogy with depression — medical treatment can cure its symptoms and move people from a depressed to a neutral state, but the real goal should be to move further towards a state of wellbeing and happiness, which medication alone cannot achieve.
Another analogy was the role of lawyers. Early in their careers they need to have a pessimistic outlook, in order to identify what is wrong with situations, but later in their careers this may hold them back and they need to become more optimistic and see opportunities.

From competency to capability
Collins said that ‘capability’ has become a management buzzword since first emerging in the 1980s, but is set to become far more important in future. It is sometimes confused with another buzzword, ‘competency’. The latter refers to possession of skills and knowledge, but corporate capability is more broadly defined as the capacity of a group of people, supported by systems and processes, to make a contribution that ensures both high performance and potential competitive advantage for their organisation

For example, in an airline, safety is a capability, because it depends on relationships between everyone in the organisation to achieve it.

Leadership therefore needs to move beyond individual contributions towards collective, team-oriented behaviour. Collins described this as ‘distributed leadership’, which he defined as having ‘sufficient alignment in the thinking and behaviour of the organisation’s corporate and team leaders that results in aligned self-leadership’.

Tips for accelerating the growth of leaders
Collins offered the following advice for developing leaders:
  • Approach them when they are at a career transition stage. This is when they are most receptive to development and ready to learn.
  • Encourage them to become involved with a not-for-profit organisation as a volunteer or board member. There is evidence that organisations that actively encourage such involvement by employees perform better as a result. It anchors people in reality, when sometimes they have become consumed by their own success — a reality check. This step also aligns with the principle of ‘grow others in order to grow yourself’.
  • Use real business issues involving both performance and renewal challenges as development tools. This is more effective than artificial ‘case studies’ and similar.
The ‘round table’ approach
As a practical illustration of how distributed leadership can work, Collins described a case study of an organisation that alternated between the use of long tables and round ones in management meetings. The CEO would hold the first part of each meeting at a traditional long table, because each manager would arrive preoccupied with his/her own parochial ‘silo’ issues. After these issues were dealt with, the meeting would move to a round table to discuss ‘whole organisation’ issues that required teamwork and collaboration. The symbolism provided by the tables proved to be effective.

Current state of play: Australian Management Capability Index
Collins’ presentation also discussed the results of the 2013 Australian Management Capability Index (AMCI), released earlier this year by AIM. The AMCI comprised an assessment by managers of their organisation’s capabilities across a range of ten management functions. Different weightings were applied to each of the ten functions before calculating an overall score. The results were then compared with those for similar surveys in New Zealand, Malaysia, Singapore and India.

The AMCI report found that Australian managers were rated better for their technical and management skills (such as governance) than they were for leadership skills (most notably people management, which rated lowest of the ten factors). Collins claimed that this result provided evidence that developing leadership skills requires more attention, which coincided with the theme of his presentation. He argued that data from reports such as the AMCI heightens awareness of the need to act, and if conducted regularly, the study can provide benchmark data to review the progress of actions taken.
The AMCI results were discussed in detail in a previous article.
Further information
More information about this seminar is available from AIM NSW.
Download the full AMCI report (PDF).

About the Author

Mike Toten

Mike Toten is a freelance writer and editor who specialises in research and writing about HR best practices, industrial relations, equal employment opportunity and related areas.
Mike has over 30 years' writing experience, including writing and editing Human Resources Management (CCH Australia) for many years and many other CCH publications. More recently, he has been a regular contributor to WorkplaceInfo.

For more information on Workplace relations, issues and best practice head to www.workplaceinfo.com.au


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