When you're in a management position, most people would say you're a leader. But there are important differences between a manager and a leader. Just because you're one doesn't mean you're the other. Do you know the distinction?
According to these executives, here is the #1 difference between a manager and a leader:
Bonnie Patrick Mattalian, Multi-Unit Business Operations Executive
It's a matter of trust.
As consumers, we make choices every day on what products to purchase, as well as where and when we purchase. Typically, that is based on an end-user experience. Yes, some of this has changed from brick-and-mortar to virtual since we were hit with the pandemic. However, I believe that premise is still the same. As businesses begin to reopen, we will be even more particular about where, when and why we chose to make purchases.
While brand image and social media can color our perceptions, it is usually some sort of person-to-person connection that creates the experience which can be memorable or forgettable.
Each employee creates the experience based on how they are treated within an organization.
Leaders create a culture of trust. While they are transparent with their teams, they are risk takers and empower employees to do the same. An environment built on strength, innovation, and trust is one where employees thrive.
On the other hand, most managers direct processes, describe exactly how to do things, and may also frequently point out and try to correct deficiencies.
Where would most people thrive? Under a good leader, who chooses a team to balance his or her strengths and to also ensure congruity around vision.
As a result, you can imagine the customer experience under a leader is quite different than that of a very direct-style manager.
There are two large coffee chains and I tell you, I can palpably feel the difference in how they are led and in their cultures every time I walk into each. Now, I have a preference based on my experiences. The staff know me, and I have a relationship with the business which withstood their closure during the pandemic. They are back—and so am I.
Bonnie Patrick Mattalian builds high-performing teams and businesses in both the private and not-for-profit sectors. An engaging and collaborative leader of multi-unit operations, Mattalian has improved EBITDA by 3-12% annually with proven solutions for customer experience delivery success, financial profitability analytics, strategic planning, and team leadership development. She has facilitated the successful launch of more than 60 businesses throughout her career, turnarounds for another 20 locations, and was most recently responsible for a book of business for a global company of more than $25M in revenues and 1200+ employees.
Rosanne Mao, CFO/Finance Director
The #1 difference between a manager and a leader is that leaders promote change, but managers react to the change. Taking the lead to drive change is essential for success. Leaders embrace change and work towards a better way through innovation. They understand and accept systematic changes. Leaders take the power to make change, grab it, and create a culture where change is expected. Managers stick with what works, refining systems, structures, and processes to make them better. Peter Drucker states, "Management is doing things right; leadership is doing the right things."
The role of leadership in change management requires care, communication, and commitment. Leaders are the bridge between the organization and the envisioned change. Leaders should clarify the vision, communicate effectively, and be accountable throughout the change process. Leaders with change-capable leadership can successfully navigate even the most disruptive change. Managers use a set of basic tools or structures and intend to keep any change effort under control. The goal is often to minimize the distractions and impacts of the change.
Leaders are willing to try new things, as they know that failure is often a step on the path to success. Managers work to minimize risk, and seek to avoid or control problems rather than embrace them. A crucial part of scaling any business is managing the changes of financial strategy. Cloud-based finance applications, social tools, and increasing artificial intelligence drive the technology-enabled change and set a roadmap for continued growth. The digital transformation of planning and budgeting improves performance. Leaders revamp all internal workflows to increase productivity, lower costs, improve controls, and gain the ability to generate revenue by applying technology as a key enabler of business growth. Finance leaders develop the skills, experience, and a wider, strategic view of the business that can help these projects be successful.
Maintain open, honest, and timely communication. Change is the only constant. Digital technologies, from blockchain to big data, are transforming financial services. Innovation creates the transformative potential of harnessing the digital revolution to support sustainable business development. Robotic process automation (RPA) can quickly and efficiently perform a specific task within given parameters and at a very high volume. The applications of AI and RPA support financial management with greater convenience, efficiency, and accuracy. Leaders willing to explain the purpose of the change and create the added value to the organization generate stronger buy-in during the change process.
Change leadership concerns the driving forces, visions, and processes that fuel large-scale transformation. The technologies driving financial services innovation are offering winning solutions for companies. Change is difficult, but the resilient and persistent leaders negotiate it successfully. Leaders should control the whole change process within the budget, and make it go faster, smarter, more efficiently.
Rosanne Mao is a CFO/finance director with more than 20 years of financial management experience in a multinational company. She's helped the company enhance cash flow, maximize corporate profitability, improve investor relationship, and reduce risk. Her leadership strategy has successfully driven company EBIT to increase by 15%. She has strategically led the enterprise digital transformation with 37% improvement in financial productivity.
Amy Hinderer, Business Management & Operations Executive
Have you ever wondered what the differences are between a leader and a manager? Can an individual be both a leader and a manager? We often hear these terms used interchangeably, but did you know there are distinct differences?
Let's first start with the Merriam-Webster definitions: a leader is a person who has commanding authority or influence, and a manager is someone who is in charge of a business, department, etc.
Keeping these definitions in mind, the most common response given for the differences between a leader and a manager is that leaders establish the strategic vision and direction of the organization while managers oversee the tactical/operational actions that support the vision and direction.
Sounds good, right? However, there are many other differences beyond the strategic and tactical. I'd like to share a few other key differences that I believe are worthy of mention. Leaders see opportunities and managers see challenges. Leaders take risks and managers minimize risks. Leaders have followers and managers have subordinates. Leaders coach and managers direct. Take a moment and see what other differences you can add to this list. I welcome your thoughts.
Let me end with a quote from Peter Drucker, management consultant, "Management is doing things right; leadership is doing the right things."
Amy Hinderer is a business management & operations executive with 18+ years of experience in global enterprise and start-up businesses. She has managed teams ranging in size from 10 up through ~35K supporting revenues between $2M - $9B.
There are some clear differences between a manager and a leader. If you want to be a good leader, we recommend thinking about the words the executives have written above. Leadership is more than a title!
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