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The Key Differences Between Leadership and Management

We often see the terms “leadership” and “management” used interchangeably. While there are parallels between them, there are also distinct differences.

Regardless of how much business experience you have, it’s important to have a strong understanding of the difference between leadership and management. Throughout your career, you’ll need to effectively practice both – knowing when and how is the key.

In this article, you’ll learn how leadership and management differ, common challenges associated with each and when you’re more likely to need each skillset.

First, how are leadership and management different? 

Before we dive into the challenges associated with each, let’s align on what both of these terms mean, and the activities that they entail. This will not only help you understand the points made later in this article but will help you assess your challenges and identify what skillset you need to bring to the table.


As defined by Merriam-Webster, to lead is to “direct the operations, activity or performance.”

Leading requires you to provide clear direction for your team by painting a picture of where your organization is headed and how and when you’re going to get there.


Conversely, managing refers to the act of aligning people to work on the right things. According to Merriam-Webster, to manage involves “directing and carrying on business or affairs.” This includes organizing your team, determining the right priorities and holding your team accountable.


Common challenges associated with leadership and management  

Leading and managing a team require two different skillsets, and each present unique challenges.

Common leadership challenges

Even the greatest leaders face challenges. A few of the most common leadership challenges we hear (and know firsthand) include:

  • Motivating people
  • Identifying opportunities for your organization
  • Encouraging opportunities for your team
  • Personally, and continually refocusing your team on those opportunities


Common management challenges

Management often presents challenges that involve working “in” the business. This includes:

  • Adapting to a new business model
  • Effectively communicating with direct reports
  • Maintaining a schedule with your remote workforce
  • Organizing and staffing

Examples of when to lead vs. manage

Reliance on your management and leadership skills can shift at various points throughout your career and in your organization’s development. Here are three examples of when to lean into each skillset.

1. Starting a new business

When starting a new business, motivating and inspiring others to pursue the vision requires strong leadership. When I was starting up Mahoney Performance Institute, strong leadership helped guide my decision making, especially when it came to the strategic direction and growth of the organization.

All the while, business owners and founders’ leadership helps to  foster hope and inspire their team to achieve something great, even with the uncertainty that comes with the early years of business.

2. Growing your business

As the business grows, the focus shifts to scalability and organizing people around processes and systems. While leadership is still important, management is key in this phase. This is where hiring the right people, with experience you can draw on, can set you apart from the competition. Oftentimes, business owners create additional roles such as COO or CFO to be the “organizer” – someone to work in the business while they work on it.

3. Times of turnaround or transformation

Turnaround and transformation within an organization can be caused by a number of factors including an economic downturn, health crisis and changes and trends within your industry. From my experience working in turnarounds, I’ve found that having both strong leadership and management skills will enable you to rethink opportunities and build systems and processes for your organization. It is also important to infuse your organization with fresh perspective and see these times as an opportunity for positive change.

Similar to startups, as you’re transforming, you need to create hope for your team and a positive attitude that you will figure it out.


Depending on your personality type, one of these skillsets may come more naturally than the other. It’s important to know the difference between leadership and management so you can figure out the challenge that you’re up against and identify which skillset your role requires at the time.

While it’s rarely clear-cut, think back to this framework and activities list when faced with a challenge to best determine whether your team needs you to lead them through, or manage the situation.

How do you balance leadership and management? Drop us a note in the comments below – we want to hear from you!

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