“My job was to make everyone understand that the impossible was possible. That’s the difference between leadership and management,” reads the back cover of Alex Ferguson’s new book, Leading.
It’s hard to think of a business idea that has had more sticking power than the distinction between leadership and management. And, as with most simple but powerful notions, the dichotomy is part caricature, part resonant truth. We have come to use it as a shorthand to distinguish the noble from the slavish, the outstanding from the ordinary, the good from the bad. “The manager is a copy; the leader is an original,” said Warren Bennis, the business scholar.
Archetypes persist because they convey valuable lessons, but they are myths nonetheless and it’s instructive to trace this one back to its origins.
It started with sociologist Max Weber, who distinguished between forms of authority. ‘Rational-legal authority’ is impersonal, based on rules and hierarchical relations that limit personal discretion. ‘Charismatic authority’ is personal, based on exceptional individual qualities, insight or accomplishments, which inspire followers.
In the 1970s, Abraham Zaleznik, a Harvard Business School professor who was also a psychoanalyst, personalised the distinction. Leaders and managers, he argued, are different sorts of people, driven by different anima. Leaders thrive on risk, think long term and dislike structure; they provoke strong emotions in followers: love and hate, admiration and resentment. Managers thrive on process; they seek order, control and rapid resolution. Zaleznik worried that too many companies favoured collaboration, stifling ‘the aggressiveness and initiative that fuel leadership’.
The next generation of business scholars, who blamed the competitive decline of US industry on an insularity bred of over-management, repurposed the distinction. Among the most influential, John Kotter saw management and leadership as different kinds of work, not different kinds of people. Management aims to ensure efficiency through routine planning, organising and co-ordinating; leadership aims to create change by envisioning a better future, aligning those who can make it happen, or block it, and inspiring them to do it.
Most organisations, Prof. Kotter, require a mix of both, the right dose depending on context: the more complexity — more products, geographies, units — the more management is needed; the more volatile the environment, the more leadership is required. He brought the concepts back in line with Weber by focusing on the levers available to executives rather than on their personalities.
When managing, one works within one’s sphere of formal authority; when leading, one influences and motivates outside and beyond, since many crucial stakeholders are external.
Unfortunately, Prof Kotter’s blockbuster case studies of a day in the life of two contrasting Xerox managers — ‘Fred’ and ‘Renn’ — immortalised the less-nuanced notion of manager and leader as personality types with one clearly less attractive than the other.
“The distinction is crude,” Patrick Cescau, former Unilever chief executive and InterContinental Hotels Group chairman, told me as he prepared for a recent talk at Insead.
“Take any five leading firms and look at their strategies,” he said, “they are all the same. It’s putting the strategy into action, embedding it in the fabric of the organisation and making it happen that is hard. For that you also need managerial qualities.”
Sir Alex’s co-author, Michael Moritz of Sequoia Capital, has also told me, “Leaders do what they think is right…the ability to resist [doing what others expect of them] is the difference between being a manager and being a leader.”
But organisations succeed when large numbers of people, not only the top brass, do what they think is right. That is why ultimately the only way to change an organisation is by institutionalising desired behaviours in processes, systems and structures. Look closely inside any high performing company led by even the most ‘Zaleznikian’ of CEOs and you will find leaders who manage and managers who lead.