Leadership versus management: The differences CEOs-in-waiting need to know

Leadership and management are often used interchangeably, but they are not the same.

Although managers must exhibit leadership skills, and top-level leaders have management duties, the breadth of a CEO's responsibilities extends far beyond oversight. As senior leaders move up the ranks, understanding the differences — however subtle — between managerial and leadership duties is important.

Andrew Chastain, managing partner and chairman of executive search firm Witt/Kieffer's healthcare practice, put it simply: "Leaders set direction and managers make it happen." However, leadership and management competencies are not mutually exclusive. Bosses must flex both muscles, but at the executive level, leadership is more critical.

"The CEO is really responsible for leading the organization's actualization of its vision," says Mr. Chastain. "He or she must be driven to create a strategic plan that leverage's all of the organization's assets — its intellectual assets, technology, facilities, relational and human assets — to maximize this vision."

How do CEOs do this effectively? There are several fundamental leadership competencies at play. 

First, CEOs must be "capstone careerists" constantly seeking professional development, according to Mr. Chastain. At the same time, his or her personal values and goals must align with those of the organization.

Second, CEOs need strategic minds. They must appreciate how the organization's functions influence one another instead of treating each as discrete silos.

Third, senior executives must be expert communicators. Indeed, 91 percent of employees say communication issues can lower an executive's standing, according to an online Interact/Harris Poll of roughly 1,000 U.S. workers. CEOs must be ready to communicate more often and deeply than they did in managerial roles, according to Mr. Chastain. This includes communication with co-executives, managers, employees, patients, families and even outside business leaders.

Linda Knodel, RN, senior vice president and CNO at Mercy, St. Louis, is the recipient of the American College of Healthcare Executives' 2016 Gold Medal Award. The award is ACHE's highest honor bestowed upon outstanding leaders who "best exemplify leadership at the organizational, local, state/provincial and national levels," and "who go beyond the confines of their own organization to continually contribute to the improvement of healthcare services and community health." She says the strong intrinsic drive to lead is a critical element that empowers certain people to rise from manager to leader. She cited a lesson she learned in graduate school when studying management and business guru Peter Drucker: Management is about doing things right and leadership is about doing the right thing.

According to Ms. Knodel, doing things right means fulfilling a set of expectations and crossing items off of a checklist. This important managerial capability is but a precursor to leadership.

"Leadership, on the other hand, is about creating congruence between who you truly are and what you're working toward every day," says Ms. Knodel. "I come to work every day wanting to make a difference and make sure the patients have the greatest experience and outcomes."

When an individual is intrinsically motivated to lead, the path to success is much clearer. He or she is more resilient and motivated, which is passed on to the rest of the organization.

Another important criterion for leaders is emotional intelligence. John D. Mayer, PhD, a psychology professor at Durham-based University of New Hampshire, defined emotional intelligence in the Harvard Business Review as "the ability to accurately perceive your own and others' emotions; to understand the signals that emotions send about relationships; and to manage your own and others' emotions. It doesn't necessarily include the qualities (like optimism, initiative and self-confidence) that some popular definitions ascribe to it."

Interestingly, according to Travis Bradberry, co-author of Emotional Intelligence 2.0, EQ scores increase up the corporate ladder from individual contributor to manager, but steeply decline beyond middle management. CEOs, on average, have the lowest emotional intelligence.

However, according to the article, for every title, the top performers are those with the highest EQ scores. So, while CEOs typically have the lowest EQ scores, the best-performing CEOs are those with the highest EQs.

As Rutgers psychologist Daniel Goleman, PhD, states in his article "What makes a leader": "Without emotional intelligence, a person can have the best training in the world, an incisive, analytical mind and an endless supply of smart ideas, but he still won't make a great leader."

"We're seeing that being brought forth," says Ms. Knodel. "Executives bring these soft skills into play — self-awareness, regulation, motivation, empathy. These social skills can really make a difference."

How Does One Acquire Leadership Skills Versus Management Skills?

One of the biggest differences between leadership and management is the way each respective skill set is learned. Business schools and books help instill important management lessons and proficiencies, but learning leadership in a school setting, many would argue, is impossible.

"Education does provide a context and framework for management, but a leader cannot be created in the classroom," says Ms. Knodel. "Learning from case studies is OK, but it's much more powerful to learn from your own experience."

Self-awareness and emotional intelligence also come with experience, according to Ms. Knodel. While individuals start with varying levels of each, as they ascend the rungs of the corporate ladder, the most effective leaders assess their experiences to learn more about their own emotions, tendencies and leadership biases.

"When you first enter the workforce, you want to be the best you can be," she says. "It takes time to reflect back on yourself in terms of, 'How authentic am I?' or 'What contribution do I bring to the table?' It's those soft skills that require a strong sense of self-awareness."

Many argue the intrinsic drive to lead cannot be taught, but may develop naturally over time. A manager may be terrific at overseeing a specific function and small cadre of workers, and find this satisfying. If he or she does not aspire to take on greater responsibility but is promoted, it is more likely he or she will flounder in that higher position, according to Ms. Knodel.

The Shifting Demands on Leaders, Today and in the Future

The constant evolution of technology, the need to adhere to ever-changing regulation and policies and the growing presence of millennials in the workforce are changing demands on leaders.

The pace of change occurring across all industries places greater need on CEOs to make decisions quickly, according to Mr. Chastain. They must also create an environment where innovation thrives.

"Even though they aren't innovation officers, CEOs must be able to build relationships and collaborate to breed new ideas," says Mr. Chastain.

On a similar note, Ms. Knodel says individuals filling top leadership roles must be nimble, scalable and consumer-centric, and they must know how to leverage the new technological tools available to them. "In today's environment, with all of the big data, there is an even greater level of knowledge around analytics and using it to predict and prevent mistakes," says Ms. Knodel. "These active insights are used to enhance decision-making."

However, some skill sets are timelessly critical to strong leadership, according to Mr. Chastain. CEOs must have a strategic mindset, strong financial acumen and inspire their workforce.

Ms. Knodel says seeing the workforce as any organization's greatest asset is essential. This is especially pertinent in healthcare, where the hospital staff are intimately involved in patients' lives. As more millennials permeate the population of working people, communicating effectively and satisfying their demands is increasingly important for leaders.

Leadership and management, though not one in the same, intersect in many ways. A leader will fail if he or she lacks managerial skills, and a manager will fail if he or she does not know how to lead. At the executive level, however, an effective leader strives for more than positive numbers. Years of experience, an intrinsic drive, strategic mindset and authentically exhibiting the organization's mission and values set leaders apart. 

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