How Leadership Differs From Management
January 21, 2020
The relationship between leadership and management is more nuanced than many people realize. While managers should meet the definition of leaders, not all do.
The leadership literature divides leaders into two broad classes, based on the work of authors like Bill George. The first is transactional leaders. These are people who offer their followers rewards in exchange for hard work or dedication to the cause. Their negotiations go something like this:
"I'll give you a $10,000 bonus if you achieve these targets that I've set."
"If you stay with the company for another two years, I'll consider giving you a promotion."
The second is transformational leaders. Instead of offering carrots to their employees (such as bonuses), they try to get them to internalize their desire to achieve the company goals. A transformational leader, for instance, might say something like:
"Now that you're a member of this team, you have the opportunity to work towards something important to you."
"This company offers you a mission that aligns with your values."
From these examples, you can immediately see how leadership and management are two different things. Management is often just telling people what to do and organizing production. Leadership, on the other hand, is aligning the values of employees with those of the company for mutual satisfaction. Under this paradigm, massive bonuses are nice, but not necessary.
Transformational leadership is something that many women have deployed in the workplace. Take the example of Roz Brewer of Starbucks. Before Brewer joined the organization, the stock price of the coffee company was languishing, performing well below the S&P 500, and some analysts thought that its best days were behind it. Following her arrival, however, the company share price ballooned by more than 65 percent, reversing the poor performance of the prior years.
From the start, Brewer's strategy was to change the culture at Starbucks. She saw her role as transitioning the organization away from a growth company to an "enduring" one. This would mean bringing wholesale change to the culture of the organization, focusing on quality instead of growth for the first time in its history. Brewer spent the first 90 days in her position studying the business. She realized that one of the problems was the way the company led the staff. Many managers had them doing pointless jobs that detracted from their ability to serve customers, like counting milk bottles.
Brewer eliminated these practices and set out a new vision for the company, one in which the staff worked alongside customers to deliver better experiences for both. The move saw significant changes. Brewer automated tasks around the shop floor so that she could free up the human talent of the organization for customer interaction. She also focused on improving the barista experience, focusing less on efficiency and more on quality customer interactions.
Her vision succeeded and employees became much happier in their roles. Productivity and worker engagement increased, proving that leadership styles can make a difference. Female leadership at Starbucks effectively turned the organization around and forced the organization to rethink its management strategies.
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