It’s time to put an end to a decades-long debate.
For years, leadership consultants have discussed the differences between leadership and management and which approach is more effective.
Some contend managing and leading are mutually exclusive roles that require different values and traits. This conventional way of thinking says managers value stability, control, and efficiency, whereas leaders value flexibility, innovation, and adaptation. Managers are practical, analytical, and rational, whereas leaders are visionary, creative, and emotional.
Another perspective is that leading and managing are distinct roles, but both roles can be enacted by the same person. Managing seeks to produce predictability and order, whereas leading seeks to produce organizational change.
Both roles are necessary, but problems can occur when one role is overemphasized. Strong management alone can discourage risk taking and create a bureaucracy without a clear purpose. Strong leadership alone can disrupt order and create change that is impractical.
The importance of leading and managing depends in part on the situation. As an organization becomes larger and more complex, the importance of managing increases. As the external environment becomes more dynamic and uncertain, the importance of leadership increases. Both roles are important for executives in large organizations with a dynamic environment. Unfortunately, it appears that few executives are effective at both leading and managing.
The idea that leading and managing are both important is not new, but there is not a clear explanation of how the two roles are interrelated and how they jointly affect organizational performance. The flexible leadership model provides a helpful way to understand the leading versus managing controversy, and it points the way to a resolution.
The Flexible Leadership Model
The flexible leadership model identifies three distinct determinants of organizational performance:
- Efficiency and process reliability
- Innovation and adaptation
- Human resources and relations
A business organization is more likely to prosper and survive if it has efficient and reliable operations, provides products and services customers want at prices they are willing to pay, and has a high level of skill, commitment, trust, and cooperation among members. The three performance determinants are interrelated in complex ways, and they jointly determine organizational effectiveness.
The relative importance of each performance determinant at any given time depends on the situation. Innovation is more important when the competitive strategy is to provide differentiated products or services and there are rapid, unpredictable changes in technology, customer preferences, and the products of competitors. As the pace of global competition and technological change increases, rapid innovation is becoming more important for successful adaptation by most types of organizations.
Efficiency leads to low operating costs, and it is especially important for companies that have undifferentiated products or services and must maintain low prices to retain customers. It’s also important when a company has a few large customers that can demand cost reductions.
Human resources and relations are especially important when a company needs highly motivated and skilled employees who are not easily replaced. There is growing evidence that the development and retention of “human capital” has a stronger impact on business results than previously thought. A study of 3,000 companies conducted by researchers at the University of Pennsylvania found that spending 10 percent of revenue on capital improvements boosted productivity by 3.9 percent, while a similar investment in human capital increased productivity by 8.5 percent.
Reframing the Controversy
The scholars who debate the importance of leading and managing have usually defined the two roles in a very narrow way. These definitions place the roles at opposite ends of a continuum, with order and stability at one end and innovation and change at the other end.
In terms of the performance determinants, the usual definition of managing emphasizes efficiency and process reliability. The usual definition of leading emphasizes innovation and adaptation. These overly narrow definitions make it more difficult to understand how the two roles can be integrated.
Overemphasizing one role will have undesirable results, but finding the right balance is only part of the answer. How the roles are enacted is as important as how much they are emphasized.
Guidelines for Integrating the Leader and Manager Roles
Despite the hundreds of books published in recent years on leadership and management, there is no magic formula that will guarantee success. Nevertheless, the following guidelines can help achieve a better integration of the manager and leader roles in companies with a dynamic environment.
1. Increase Situational Awareness
Situational awareness means understanding external factors that can impact the effectiveness of an organization and what strategies are likely to succeed given the company’s internal processes and resources.
For instance, it would be difficult for a top executive to diagnose the causes of a problem, initiate changes, and inspire commitment without a clear understanding of:
- The shared values and beliefs that make up the organization’s culture
- Prior events and decisions that determine how the organization got to where it is now
- The impact proposed changes could have on work processes and customers
- The political processes that affect major decisions
To maintain a high level of situational awareness, leaders need to obtain accurate, timely information about the organization, its members, and the external environment. It’s essential to measure key variables and how they change over time. Leaders can obtain additional insights by visiting facilities, observing operations firsthand, and meeting with employees, customers, and suppliers.
2. Embrace Systems Thinking
Understanding the various factors that impact performance and the implications of changing situations requires the use of “systems thinking.”
When making decisions or diagnosing the cause of problems, it is essential to understand how the different parts of the organization are interrelated and how a change that is specific to one area could potentially have other, unforeseen consequences on other areas.
While strategic thinking about these issues may be more important for high-level managers, it is relevant at all levels.
3. Coordinate Leadership Across Levels and Subunits
The performance of the organization depends not only on the decisions and actions of the chief executive, but on commitment, cooperation, and coordination among all managers in the organization. The decisions made by managers at different levels must be compatible with each other and with the company’s overall strategy.
It is difficult to achieve seamless coordination across different parts of an organization, especially when the subunits have different functions, markets, or subcultures. Formal plans and objectives are helpful, but effective coordination is unlikely unless the managers also have shared ideals and values to anchor judgments and guide decisions. Companies with strong shared values and beliefs about the primary mission and purpose of the organization, the desirable qualities of its products and services, and how members should be treated are more likely to survive and be successful over a long period of time. A primary responsibility of top management is to ensure that the organization has a relevant core ideology, but leaders at all levels must build support for the core ideology and ensure it is understood and used to guide daily actions.
4. Lead By Example
When top executives act in highly visible ways that emphasize the importance of efficiency, innovation, or human relations, the effects can cascade down through the organization.
Setting a bad example can be as powerful as setting a good example, and it is essential to keep decisions and actions consistent with espoused values and the core ideology for the organization. Unethical behavior and decisions guided by self-interest can undermine the trust and commitment of employees.
Tying It All Together
Although there is no simple formula for success, the flexible leadership model reminds us to consider all relevant factors when making decisions or implementing organizational change. The managing versus leading controversy has continued so long because the roles are defined in a narrow way that makes it difficult to understand how they jointly affect organizational performance and how they can be integrated.
Rather than asking whether they need leadership or management to achieve success, organizations should consider how they can incorporate elements of both when the situation calls for it. Applying the principles of flexible leadership can help leaders at all levels make better decisions, respond to a crisis and prepare for the challenges that come with new positions and opportunities.
To learn more about the principles of flexible leadership and how to apply them, read my book, Flexible Leadership: Creating Value by Balancing Multiple Challenges and Choices.