Leadership and management are terms frequently interchanged within the workplace. Both concepts are connected, but they do not have the same meaning. Understand the differences between the two and you will learn the importance of leadership in management and how leadership development will allow you to be a better manager overall.

This quote from John C. Maxwell, an author and expert on leadership, highlights the difference: “A manager says, ‘Go.’ A leader says, ‘Let’s go.’ ”

As a dealership principal, the role of management is handed to you along with your job title. A manager’s job is to plan, organize and coordinate. Leadership, however, is a responsibility that calls for managers to innovate, challenge and inspire their employees. You manage processes and lead people. This table gives examples of the differences between the two.

Requiring Both Roles

Within a business, we need both leaders and managers. Leaders inspire people to take action. Managers hold people accountable for those actions. For example, if you are responsible for a sales team, you need to ensure they are focused and taking the right actions by identifying key performance indicators that will be measured weekly, such as number of contacts, closing ratios, average dollar sale, etc. This is management. Now that you have the numbers, you need to inspire, guide, encourage, share successes, train and model — and have fun with it. This is leadership.

Anyone in the organization has the potential to become a leader, but managers must be leaders. A leader who cannot manage has a vision of where they want to go, but no idea how to get there. A manager who cannot lead is not able to build trust and create engagement within an organization to get to where they need to be.

Comparing Leadership vs. Management
Leadership Management
Creates Future Oversees Current Processes
Thinks ideas Thinks execution
People focus System focus
Asks what and why Asks how and when
Challenges the status quo Works with the status quo

Behind every innovative company lies a charismatic leader who pushes and inspires employees to be their best. As Steve Jobs was to Apple and Jack Welch to GE, great CEOs are known for more than their management skills. They offer a different approach and motivate their employees to execute their vision to reach their business goals.

Executive leaders instill a corporate culture in their organization that encourages employees to stay engaged in their work. Our culture is developed by intentional actions. These intentional actions, or core values, must be clearly defined, reinforced during training and used as a basis for hiring and during job performance reviews.

Employees should then be rewarded through public and private recognition. If you focus on both your employees and the overall big picture, you can help your team to play to their strengths, which will help you achieve your dealership’s goals.

Becoming a Leader

This quote from leadership expert Verne Harnish in his book Scaling Up shows the drawback from ineffective leadership: “People join companies, they leave managers.”

Harnish identifies that good managers (without leadership) discover what is different about people and capitalize on it. However, great managers who are leaders discover what is universal, build a common vision for a better future around it and then rally people behind it. If we are top down in our direction and focus only on numbers, we are focused only on management. Leadership helps us focus on our people — their needs, desires, development and engagement — and work together to achieve our common goal.

The good news is leadership can be learned. When you think of your dealership as a training company as well as a company that sells equipment, you’ll see growth. For instance, every person in your organization should have a personal development plan, including you. By understanding how leadership plays into the four business decisions you make as an executive (strategy, execution, people and cash), you’ll have a clear grasp on your role as a manager and leader.