6 Key Differences Between Small Business Leaders and Managers

You have heard me say that leaders motivate and inspire others. They look into the future and see the big picture of the company. At this point, you may be thinking, “That sounds like a manager to me.” Well, that’s not exactly correct. Management guru, Peter Drucker talked about the distinction between managers and leaders. Specifically, he said, “Management is doing things right. Leadership is doing the right things.” I realize that there is little difference between managers and leaders in Drucker’s play on words. However, there are distinct differences between small business leaders and managers.

Podcast Time Index for “Ways Great Leadership Adds Value to Your Company”

00:25 – Using Leadership to improve the value of Your Company
01:11 – How does Leadership drive the company’s value?
02:32 – Managers vs. Leaders
07:14 – Leadership & Planning
07:51 – Where does Leadership bring the value to Your Company?
10:40 – Summary

Many times, small business owners will say, “I have managers. I can leave my business in their hands. Therefore, I’m driving up the value of my business.” Ultimately, yes, you want to build a business that can produce revenue without you being involved. Yet, chances are that you’ll always have to be involved at some point. Therefore, you go out and hire managers to take care of the company for you. But as I’ve said in previous articles, managers are not always good leaders, and good leaders are not always managers. Therefore, let’s take a look at the difference between managers and leaders.

6 Differences Between Leaders and Managers in Business

#1 Managers have policies and procedures. Leaders have visions and strategies.

Oftentimes, managers are not visionaries, and they are not strategists. They are trained and paid to follow orders from the top, not to think through processes strategically. But friends, if you’re trying to build leaders within your organization, you want to train them to think globally and strategically so they can catch the company’s vision and help you take it where you want it to go.

#2 Managers take orders and direct people. Leaders motivate and inspire people.

You may say, “Well, I’ve got managers in my company because they can direct and control situations.” True, that’s what managers do. They direct an army; they’re very good generals. Managers take orders and move and manage people as they see fit to accomplish their directives. However, leaders don’t direct or control, they motivate and inspire people. Leaders aren’t trying to micro-manage. Instead of directing and telling people what to do, they are casting visions for people to follow willingly. You see, a leader can motivate people to see a cause bigger than themselves.

#3 Managers think about what the company has to do. Leaders think about where the company’s going.

Managers often ask, “What do we have to do?” Yet, leaders ask, “Where is this company going?” Managers try to deal with each problem as it comes up, whereas leaders think about problems in a global, long-term context. In order to increase the value of your company, you want to develop leaders who can think contextually and long-term. You don’t want “managers” stuck in the immediacy of problems. Instead, you want leaders who can solve short-term problems based on the company’s long-term goals.

#4 Managers give directions. Leaders ask questions.

Just as managers are given directions, they give directions and orders to employees “beneath” them. They expect employees to listen to what they say and then follow their instructions. However, leaders inspire action by asking their team members questions. Rather than saying, “Do this,” leaders ask, “Is there a better way to do this? How would you accomplish this?”

#5 Managers are bottom-line oriented. Leaders are big-picture oriented.

So many times, managers focus on the bottom line. They’re worried about whether or not they made enough profit, products, or revenue for the company. I’ve got to tell you. I fall into this category too many times myself. Yes, we business owners have to focus on the bottom line. Yet, if we can teach our team members to be big-picture oriented, we’ll add value to our company. Then, instead of asking what profits and revenue are, your leaders will be asking how the revenue or profits affect the future of the company.

#6 Managers worry about projects. Leaders worry about people.

Finally, managers tend to worry about projects, while leaders tend to worry about people. Now, caring about your team members doesn’t mean you don’t demand high output or perfection. It just means that you care about others more than you do yourself. Yet, don’t lose sight of your company’s overarching values and goals for one person. Sometimes, you have to think about the good of the whole rather than the good of the one.

Create Visionary Leaders

You know, many of us business owners are so busy working in our companies that we are not even leaders within our own organizations. We’re managers. We deal with what we have to do today. We don’t even worry about where we are going until a business planner makes us sit down and write out our objectives. Yet, if you are going to improve all areas of your business, you must create visionary leaders who can strategically plan your business’s future with you. You must recognize the difference between your business’s leaders and managers.

Be sure to join me in my next article where I’ll be discussing the qualities needed by your people that make them great leaders.