There is a lot of confusion about the differences between management and leadership. They both involve deciding what needs to be done, creating a network of people to accomplish goals and ensuring that the work actually gets done. Management and leadership complement each other, but they do so in a very different way.

So what is the difference?

John P. Kotter differentiates management from leadership in his book, What Leaders Really Do. He claims that management copes with complexity but leadership copes with rapid change. Kotter has discovered three major differences between management and leadership:

Management involves setting goals, planning, budgeting and allocating resources. Leadership involves setting direction and developing a vision of the future, along with strategies to achieve this vision.

Management involves organizing, staffing, and setting-up job descriptions, recruiting qualified individuals, delegating responsibilities and devising systems to monitor execution. Leadership involves aligning people, communicating the vision and getting a commitment to achieve it.

Management provides control, solves problems, monitors results versus objectives and takes corrective actions to resolve deviations. Leadership provides motivation and inspiration. It keeps people moving in the right direction despite challenges, by appealing to their values and emotions.

Most organizations are over-managed and under-led because they focus mainly on formal long-term planning and budgeting rather than on setting a direction. Long-term planning is a deductive process while setting direction is an inductive process. Long-term planning worked well in the 20th century when the markets did not change rapidly. In the 21st century, markets are characterized by rapid change and we must adapt to volatile market dynamics. Therefore rapid change is essential to be able to compete in the new dynamic business environment.

But here is the problem…

Managers try forcing change through formal organizational systems, structures and incentives. They fail to drive change because they don’t involve informal stakeholders (like customers or suppliers). Managers communicate short-term plans effectively through the formal organization, but when it comes to communicating a whole new future – you need a leader.

Communicating a new vision successfully depends solely on leadership – not management. Leaders tend to go beyond the mechanical structure of the organization. While managers count on the power of their titles, leaders count on rapport, integrity and trustworthiness to drive change.

Well-managed organizations are not necessarily well-led organizations. The employees of well-managed organizations are effective within the Standard Operating Procedures (SOP). The same employees are powerless when they try to initiate change outside the SOP. When they attempt to initiate change, they receive responses like, “That’s against our policy” or “We cannot afford it” or “Shut-up and do as you are told.”

Strong leaders resolve these challenges by providing a strong alignment and drive change beyond SOP. While managers focus on “best practices,” leaders create “new practices.” While managers adapt to the culture; leaders create a new culture. Leaders align employees with the new direction and ensure that they are not reprimanded, even when they do not comply with the policy.

For example, managing a factory requires an effective control system to respond immediately to deviations from the plan. This factory requires well organized, trained and disciplined employees to run the plant efficiently. But achieving a bold vision requires the kind of energy that only motivated, empowered and inspired employees can achieve. Control systems will not drive employees toward a new direction. Leaders, not managers, will evoke feelings of achievement, a sense of belonging, recognition, self-esteem, and a valuable purpose. Such feelings will prompt powerful responses.

Leaders, rather than managers, will motivate their people by articulating the business vision, involving people in how to achieve the vision, providing coaching, empowering and enhancing self-esteem and rewarding success. This not only gives people a sense of accomplishment but also makes them feel like they are part of the company. They feel that the organization really cares about them. The more change characterizes the business, the more the business needs leadership over management.

While managers tend to develop a depth of expertise in their professional discipline, leaders must develop width of experience beyond their professional disciplines. These leaders are finance professionals that assume operational responsibilities or operational managers that assume sales positions. Creating multidisciplinary task forces or small business units are great ways to develop new leaders.

Promotion to a management position is a milestone in your career. There is no promotion to leadership. Becoming a leader is a personal decision and a milestone in personal development rather than career development. The leadership milestone requires to focus on three areas. First, set vision and direction toward change. Second, align people by communicating through an informal network of relationships. Third, motivate and inspire people to “buy-in” to the vision by evoking feelings, emotions and inner values.

Here is a three-step process that will accelerate your transformation from manager to leader:

Decide to become a Leader 

If you have leadership traits but have not decided to lead, no matter how much you attempt to scale the corporate pinnacle, you won’t reach the top. It is a decision based on desire. It is a life mission, not a job description. 

Believe You are a Leader

If you do not believe in your capability to lead, you will continue to act as a manager. Imagine you are managing a department of 50 employees. You are addressing them in order to summarize the year-end report and state your expectations for the upcoming year. You can either stand there as a manager drowning in a list of Key Performance Indicators (KPIs) of employees; or you can speak to the dreams, wishes and personal expectations of the people listening to you. Believe me when I say there is a big difference!

Change from Management Behavior to Leadership Behavior

An important milestone for change is when your thoughts and actions about your supporters take more time than your thoughts and actions about yourself. A leader’s mind is busy with his supporter’s lives. A manager’s mind is busy with his own performance. 

Have you noticed that leaders are dealing with supporters and not subordinates, employees or staff? Leadership is 360°. You manage employees who report to you but you lead supporters who are colleagues, managers, customers, distributors, business partners and even the Board. There is a saying that goes: “As much as the Board manages the CEO, it is the CEO who manages the Board.”

The lesson is that you must see leadership beyond your reporting relationships. The 360° leader continuously inspires, motivates and influences listeners, no matter where he or she is in the corporate hierarchy.  

The first thought that often comes to mind when considering change is, “What will people say?” or “How will I look?” and even, “Won’t people disapprove of my new behavior?” It is most likely that they will not disapprove. However, approval or disapproval does not matter as long as your behavior is congruent with your values. 

Let’s wake up today to a new reality. Decide, Believe and Change. Influence the people you touch.