Leaders Or Managers: What’s The Difference?

We hear so many calls for ‘leadership skills’ these days. I am not quite sure how we are supposed to produce infinite leaders, nor what the consequences would be if we succeeded. It seems to me there would be a real danger of complete anarchy.

In fact, I worked in one company early in my career that I would say had an abundance of leaders. Many of its management staff went on to fill very senior roles in other companies and others became successful entrepreneurs. One consequence of all this leadership  talent was that many managers believed they knew better than their colleagues and senior executives. So every mandate from on high was altered on its way down. The company was British Leyland. It does not exist any more.

But on the wider question of what distinguishes a leader from a manager, I like the distinction made by Jeffrey Fox in his book ‘How to be a Fierce Competitor: What Winning Companies and Great Managers Do In Tough Times‘. Fox asserts that the biggest difference between leaders and managers is ‘the tolerance for ambiguity’. Now that is really interesting, because recent research findings have shown that one of the key challenges for contract management today is …. ambiguity. It is the uncertainty over precise requirements, or the difficulty of anticipating the nature and scale of change. Of course, contracts can be designed to deal with this – but it seems the people who negotiate and manage them cannot in general cope with such uncertainty or imprecision. That has been identified as one of the major reasons why contracts fail – and presumably leads to the conclusion that most contracts, commercial and legal experts are not natural leaders.

‘Leaders make decisions, big decisions, mid-crisis decisions, without certainty of the outcome,’ says Fox. Managers, on the other hand, ‘may have the best MBA education possible, but they measure metrics, analyze, maintain the status quo ….’. But in the end, do they decide? Are they empowered to decide? Does a leader in fact need ’empowerment’?

Executive management keeps calling out for more leadership. Yet at the same time they keep piling on more performance metrics. Is that because they just don’t see leaders emerging, or because in their hearts they don’t really want them to emerge? Whatever the answer, the challenge of dealing with increasing ambiguity in our contracts and commercial judgments will not go away. So we will have plenty of chances as a community and as individuals to decide what we want to be – leader or manager.