A leader vs manager: Are they the same? What is the better way to head up a business? In this, we explore.
Although they share many traits, leaders and managers are not identical in practice. There are clear differences which set the two roles apart from one another. Learning to manage might be important, but learning to lead is crucial.
What is the difference leader vs a manager?
There are several major variances between leading and managing in business; most of which stem from one fundamental difference:
-A manager oversees the team that works. -A leader heads up and looks after the individuals in the team.
From here, the differences in characteristics and practical ways of running the company or supervising the individuals in a team appear:
Leaders look to inspire while managers focus on implementation
“A No. 2 pencil and a dream can take you anywhere.” – Joyce Meyer
When a team has an effective leader in place, you’ll often see that the individuals are inspired to do their work to the best of their ability. This is because the leader knows how important it is to help the team see that what they do is part of a bigger picture and that every task is important to achieve that.
If a manager is in place and there is an absence of leadership skills, you will often see a task force completing the work, but the drive to do it well is generally lacking. The manager might desire the success of the company, but they are missing the ability to rally the team to desire it too.
Leader vs Manager: Innovation vs Traditional
“Innovation is the new competitive advantage.” – Julia Sweet
While something in business might work well, it might not offer the best possible system or solution. A leader takes pride in finding the best, most effective method of solving a problem. This often results in change – which can be considered risky – but can drive performance and efficiency. Managers often consider the “if it isn’t broken, it doesn’t need fixing” axiom and look for ways to keep things the same, making minor improvements on the systems in place. While a manager sees disruption as dangerous, a leader sees it as crucial.
Leaders are risk-taking while managers want to control risk
“Failure is success in progress.” – Albert Einstein
In the same way that leaders see innovation as a way to move forward, they see risks as a potential for major success. Leaders also understand that something failing is not an end-game, but rather an important part of learning towards success.
Managers, on the other hand, look to control risks and keep them to a minimum.
Leaders want their people to succeed while managers want to fulfil their objectives
The happiness of an individual in a team is hugely important to a leader. A good leader understands that individual success will equate to a team success because successful individuals are inspired, and inspired individuals want to succeed in all areas of life. A leader also knows that success can mean anything from a personal, professional, and relational level and they will try to put things in place to help the individual meet goals.
A manager might understand how important success is but won’t put anything in place to help individuals achieve it. Instead, the focus is put on output and driving work objectives to completion.
To maximise both business and relational requirements in a company, finding a person who can satisfy both leadership and management needs is key. An individual or team who can supervise staff members, giving guidance while keeping their eye on the prize. Finding an excellent combination of a business manager who can lead a team well can be a game-changer in business within no time.
One of the best ways to hone business leader skills is to practice consistently; displaying leadership characteristics in each interaction. Taking a short course at the same time can also snowball results.
Yesterday we saw individuals giving their 67 minutes to valuable causes across the nation. The demonstration of kindness we see on 18th July is something which we can – and should – incorporate into our daily lives to see change consistently take place. Not only was Mandela a humanitarian, but he was also a leader in action. Madiba had the type of leadership qualities we should consider and from which we can learn.
“It is not where you start but how high you aim that matters for success.” – Nelson Mandela
Mandela knew how important it was to understand the background and context of a person to comprehend them as a person. He also knew that excelling was not out of reach for anyone. As a leader, it is critical to identify the true potential in a person rather than judging them from an impression. Anyone can get anywhere with the right attitude and the right guidance.
“Remember to celebrate milestones as you prepare for the road ahead.” – Nelson Mandela
Revelling in victories is a huge component of enjoying success. It also helps motivate us to move from one point to the next. Doing small – or big – things to acknowledge and celebrate each milestone is the best way to move forward to achieve the next one. Being passionate in each success is contagious and a good attitude can spread quickly.
“I learned that courage was not the absence of fear, but the triumph over it.” – Nelson Mandela
Being courageous can mean different things for different people – but all courage takes is taking a risk and backing yourself with it. Some decisions in business or leadership might have no guarantee of success but are still worth making. It just takes courage to go through with it. Having courage is important in leadership because it results in the ability to execute small tasks to implement big projects.
“It always seems impossible until it’s done.” – Nelson Mandela
Before striving to achieve something, it is important to put goals in place. Once goals and objectives are set, it is important to keep your eye on the prize and push forward to achieve it. This is especially important in big, seemingly impossible projects and tasks. Once you have succeeded, you’ll notice that you did more than you thought possible. One of the biggest challenges a leader might face is finding a way to show employees or a team that they can achieve the impossible too. Showing an attitude of endurance will help motivate a team to achieve amazing things.
“Lead from the back, and let others believe they are in front.” – Nelson Mandela
Nothing rallies a person like knowing that they are doing something important. A good leader knows how to inspire a team so that they know that they are doing important work which is making a difference. This could be in the form of delegating big enough projects, giving responsibilities around the office, or giving consistent support or encouragement. This also includes the ability to listen to any suggestions so that the team know that their input – as well as their feedback – is important.
Eager to learn
“Education is the most powerful weapon, which you can use to change the world.” – Nelson Mandela
The desire to learn more is fundamental in succeeding and maintaining excellence in any area. A leader should want to learn more about their field, whether through by taking a short course or by reading articles related. The skill to learn should also go hand-in-hand with the skills to teach. A leader should be able to provide instruction to a team with clarity; giving the reason as well as the good explanation so that they can learn new skills while at work.
Leading effectively requires more skill than simply being able to give instruction. To lead a team into success with excellent, essential skills are needed to inspire, cast a vision, and motivate. With the right leadership, staff members are inclined to work harder because they feel as though they want to achieve. Learning leadership skills takes time and practice but makes the world’s difference in managing and looking after a team.
“Self-confidence is the memory of success.” – David Storey
If you are confident as a leader, your team is much more likely to want to follow your instructions. This means being decisive and self-assured in the decisions you make. Showing confidence can start by being assertive without being pushy. Fundamentally, it means respecting your decisions enough to stand by them.
Don’t mistake arrogance for confidence. Rather than showing off, simply show that you back yourself in what you have said and your team will want to back you too.
“Innovation distinguishes between a leader and a follower.” – Steve Jobs
Standing out from the crowd means doing something different. Being creative and striving to find innovation despite the patterns of everyday life is a key part of leadership. It requires creativity to inspire others to think differently which leads to achieving goals in more effective – and exciting – ways. Thinking out of the box could turn the box into an entire new project which could spark something great. With creativity comes a little risk, and a little risk could lead to a high reward.
Honest and integrous
“Honesty and integrity are absolutely essential for success in life – all areas of life. The really good news is that anyone can develop both honesty and integrity.” – Zig Ziglar
Anyone appreciates being told the truth; it means that you can trust that what is said is honest. In a team, this is no different. For leaders to be trusted by their team members, there needs to be a culture of honesty and integrity. At the same time, leaders should expect and appreciate the truth from their staff to increase the culture of honesty. This means it is important to practice the skill of being approachable and accessible and patient with your team, so that when someone says something you might not agree with, you react with diplomacy and not emotion.
“Communication – the human connection – is the key to personal and career success.” – Paul J Meyers
Team members need inspiration, but they also need direction. Being able to communicate the goals, objectives, and vision of the company to your staff is a crucial skill in being an excellent leader. If a staff member does not understand what they are meant to be doing, it is up to the leader to clarify so that work can be done efficiently. The ability to use the right words is vital in business and can motivate someone to go far beyond what they might have thought possible. Achievement comes from good communication and good communication should come from the leader.
“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams
Work should not be a daily chore for any employee. It should be a way to achieve and find satisfaction in their vocation. An inspired employee usually is better at taking initiative and going the extra mile because they want to see the company succeed. The leader is in place to inspire them to reach more and go further. If leaders can maintain good motivation in a team, then they are doing a good job and are helping them, which ultimately helps the business.
How do I become a better leader?
Practice is always an excellent way to develop any leadership skills. This can happen actively in everyday situation. Taking a short course is also an excellent way to gain an understanding of what is needed to flourish as a leader and learning those skills becomes an easier task. After learning what is necessary, it is important to take advantage of any opportunity you have to hone the skills, in the small acts and interactions to big, company-making decisions.
Establishing a business takes tenacity, creativity, and determination. When it comes to leading a company, you need a different set of characteristics to ensure a prosperous and healthy working environment.
Without effective leadership, all other aspects of the business will deteriorate. A strong business leader will make sure that productivity is maximised and that the right people are hired for the job.
Five skills can help make you an effective business leader:
Communication Is Key
Good leadership is complete transparency and ensuring that all employees are in the loop with the activities in the business that could affect them. Imagine this: There have been retrenchments at a company. Of course, there is chatter amongst employees. No one has communicated anything, and now the rumours are running rampant throughout the office. This causes anxiety and distrust among staff members.
In this case, good leadership is letting staff know about why the retrenchments have taken place (to help with rumour control) and to ease their uncertainty going forward. How you communicate this is also important. Will an email work? Perhaps, but maybe chatting to them in person would be better.
When you communicate to employees, always be clear and concise – whether it’s in email form or face-to-face. You’ll find that employees will be more engaged and motivated once they share your vision.
Be Very Supportive
When you think about leadership, the word ‘supportive’ isn’t the first thing that comes to mind. Traditionally, leaders would assign employees a task and have them run with it. With supportive leadership, it involves collaboration and continuous mentorship.
Why does this style of leadership work? There’s a saying that people leave bad managers and not a job. In today’s workplace, employees want to feel valued, supported, and work on something that will make an impact. Supportive leadership means that you are showing a general interest in the employees that work with you, and by doing this, you gain their loyalty.
Traditional leadership would say that empathy is a weakness. However, in today’s workplace, empathetic leadership can help cultivate a harmonious working environment. How do you lead with compassion? By really listening to your employees’ needs. This means paying attention to your body language, your tone of voice, and taking note of the emotional tone of your employees’.
Empathetic leadership also means being present and providing everyone with a voice to air their concerns. For those who lead traditionally, this could be a waste of time. However, by actively listening to your employees, you gain their loyalty, and in turn, they are motivated to achieve business goals.
As a business owner, you’ll be making plenty of decisions – everything involving finances to hiring. Some of the decisions will be uncomfortable, which is why effective decision-making is an essential skill within the leadership.
So what does effective leadership decision-making entail? It means a leader will look at the facts and always explore the best options when it comes to a solution. A good leader will also be confident in their decisions and never procrastinate.
If we have to consider what the definition of leadership looks like, we can say that it is the instruction and guidance of a person with the intention of a group or team achieving results. These results could be something tangible, such as reaching a certain goal or mark, or non-physical such as teaching a skill or helping someone master a skill.
The best kind of results are born from encouraging leadership, with affirmation towards achievement and a focus on the positive.
What are the qualities of leadership?
A good leader knows that there is always room for growth and that dedicating time to develop and hone skills is a vital part of leadership.
The best leaders know that the most important part of leading is making sure there is a space in which employees and team members can excel in their different positions and careers. This environment comes when the major qualities of leadership are displayed:
Anyone in any profession knows how important communication is. This is even more true for positions of leadership. Being able to communicate with employees and team members in such a way that there is clear understanding as well as value in the message.
A leader should be able to manage a team and, at the same time, they should cast the vision that the company is heading towards. A leader is a visionary and explaining to the taskforce what the purpose of the work is, is just as important as explaining what the work is. Employees who are working towards a mutual goal are likely to work much harder and it is up to the leader to explain what the goals are.
A team member should always be able to believe a leader when they say something. For this to develop, the leader should be honest in the way they communicate with their team. If honesty is upheld, trust is built, which allows for a healthy workplace where integrity is valued.
In the same way, if a leader is honest with their employees, it allows for vulnerability which means the employees will likely be more honest. Sincerity, in a professional sense, provides a working environment whereby team members feel they can approach their leader with any concerns at the same time as trusting that any encouragement they receive for work is true.
Making a decision and sticking to it is the fundamental first step in business operations. Being able to consider different factors and decide on the apparent best course of action sets work in motion. If a team can trust that the project, campaign, or work at hand will be completed, there will be more motivation to work on the task and see it through to the end. A leader should be able to make decisions based on the growth of the company as well as the employees. This makes it easier for the employee to trust that the leader’s decisions are the best possible ones to make.
Managing and sharpening leadership skills
The best way to develop skills is to use them. It is possible to practice leadership by displaying the actions in every interaction. Being a leader in every-day operations is the best way to develop characteristics. The more that the skills are used, the easier it will be to use it in the next interaction. It is important for leaders to lead at all times in business operations.
Another way to learn and gain leadership skills is to take a short course in leadership. This will help equip a leader with the right leadership principles in order to become a successful, excellent role model in business.
Financial management refers to all of the functions and aspects of the financial components of a company or for an individual. This includes, but is not limited to, the planning, managing, controlling, and evaluating of the finances and economic structure for a client.
The financial management of a company requires putting together a strategy to ensure that a company maintains positive growth in its finances in order to maximise profit and minimise costs.
What are the goals of financial management?
One of the key goals in financial management is to make certain that the client is in a financial state such that there will be more funds coming in than going out.
The goals of financial management can be two-fold related to:
– The company
– The stakeholder
When it comes to the company, the main goal of financial management is to organise a plan for how the funds are spent in order to see the financial assets of the company returned both quickly and more than when they left. In short, the financial manager should draw up a blueprint which will be able to see the revenue grown quickly, but sustainably.
For the stakeholder, the financial manager should be able to show how the company’s money is being used so that their investment is proving worthwhile and that their profits will come in with time. The financial manager should also be able to communicate any financial plans with the stakeholders in a clear and concise manner, so that they are well informed of future plans.
Key objectives in financial management
As the principal goal in financial management revolves around growing revenue and creating ways to maximise costs, it is not surprising that the main objectives of a financial manager are based on that fundamental idea. The financial manager is responsible for putting plans in place to make sure the goals are met. This includes all phases of strategising, planning, evaluating, monitoring the company’s finances.
Plan and map out goals clearly
Drawing up a strategic plan helps put the right processes in place before moving forward. This helps to define where and why certain funds are allocated and when they should and can be spent or moved. Planning a roadmap makes it easy to evaluate and track the direction of the money and whether the strategy is working as expected or whether the plan should be changed and modified.
Organise financial assets
In order to best consider and monitor the company’s finances, there should be clear, easy-to-see methods of tracking and organising the movement of the funds. This can look different for businesses and individual clients.
For a business, it is important to record all relevant information in clear systems which can be looked over by management and make sense. Should it be necessary, the organisation of the financial assets should also be able to be controlled by another financial manager or team member.
For an individual client, all processes of investment and financial storage should be explained in clear terms with no jargon or slang so that the client can understand. This includes communicating all aspects related to the client’s financial ecosystem such as retirement and health plans, credit or cheque systems, and any insurance that might be advised or necessary.
In order to efficiently organise the assets for both businesses and individuals, the financial manager should take advantage of any software and technology.
Grow revenue passively
One of the best ways for a company to build revenue is to earn it passively. If a financial manager can find the right investments, then half of their job is done without even trying. With a good investment strategy, a company’s money can grow exponentially over years without needing to add any further investments. The financial manager is responsible for finding the best way to grow their client’s profits passively.
Communicate with clarity
Not all individuals are aware of the different phrases and terminology in commerce and finance. When talking with clients and stakeholders, it is important to explain in simple, easy terms so that there is absolutely understanding.
It should be one of the objectives to communicate frequently, breaking down any important steps or movements with clients and stakeholders on a regular basis, such as monthly and quarterly.
The importance of financial management
The backbone in any company is in its finances. This means that focusing on growing the finances is essential for success. Beyond the fundamental necessity of having good financial stability, financial management has important features in building an excellent business.
Helps with financial planning
Any expert execution comes from a plan in place. With a financial plan in place, the financial trajectory of the business is easy to see. If things are off track, the financial manager will be able to identify problem areas and set things straight to get the direction back on course.
Plans for acquisition of funds
Companies, especially startup ones, require capital to drive operations forward. The capital contribution can come from a number of different locations. It is up to the financial manager to set up strategies to advise on where to both source and place the funds that come in for the business to use.
Allocates funds in effective ways
For the business to run in the best and most sustainable way, the funds coming in need to be used effectively. The financial manager plays an important role in helping management allocate where the funds go. For example, if the company has just received a large investment sum, then those funds should go towards an integral part of the business’ functions in preparation for building and maximising profit.
Encourages good money planning methods
Teaching staff important lessons can be good for both the individual and the business overall. The financial management can influence team members in a company to be better with their – and the company’s – money which results in a saving-savvy environment. Cutting losses in a general sense benefits the business in a major way.
Ensures financial stability
Once the finances of a company are on a stable path, it does not mean the work is done for the financial manager at all. Maintaining the positive financial stability is one of the most important components in financial management.
Financial management functions
Estimate capital requirements
It is crucial to know how much is necessary to get started or to maintain a company’s operations. This is why the process of estimating the capital requirements for a company is one of the most important roles that a financial manager undertakes. How much will be needed for certain periods of time is a vital consideration as it gives an idea of how long the company has before new funds or investments are needed.
Source fund acquisitions
Since there are different ways to gain finances for capital, it is important to consider which is the best long and short-term approach to take. The main ways to acquire financial assets are:
Through issuing shares and debentures,
Taking loans from banks or financial institutions, and
By drawing public deposits such as in the form of bonds.
While one option might be perfect for one business, it might be entirely unsuitable for another. The financial manager is responsible for considering the different approaches and suggesting the best method of acquiring the financial assets needed.
Investing the financial assets
This function of financial management is vital to the process of passively growing a company’s funds. Similar to capital acquisition, investment options are numerous and it is up to the financial manager to find the best, most suitable ones so that profits can grow without putting in much effort.
Scope of financial management
The scope of financial management can be broken up into three main factors:
As one of the primary functions of financial management, making the decision of how to source funds is a major factor in the scope of the industry. The financial decisions are important at any juncture in a company’s life, but this is especially true in the initial stages of starting out. Decisions with regards to capital and fund acquisition can make or break a startup, so taking them seriously and doing sufficient research is paramount.
In a business, there are two different sources that can be used to raise funds:
Longer-term sources such as capital structure, and
Shorter-term sources such as working capital.
Financial investment decisions
As the third key factor in the functions of financial management, finding the right financial investment option for a company is a main part of the scope too. This can be broken down into short and long-term options:
Long-term investment includes making decisions which sees the financial assets of a company pledged for long periods of time. Often, this comes in the form of fixed assets, such as equipment or land. These investments are necessary for the business to operate, but do not directly impact cash-flow.
Short-term investment includes making the decisions to see the financial assets of a company pledged for a short amount of time. This, unlike long-term investment, directly affects the cash-flow and liquidity of the company.
Dividends refers to the amount of profit to be distributed. This is an important part of financial management because decisions need to be made regarding how and when that profit is allocated. This is not always easy because shareholders and managers might want different things for their claim. Shareholders might want to claim their dividends for personal use, while managers might prefer the profits to remain in the company in order to meet the on-going needs.
This decision involves the financial manager who can help to find a compromise so that both parties are happy with how the profits are split.
Financial management salary expectations
The average salary for this position in South Africa is R 543 713 per annum.
Financial managers can expect to earn the following according to their occupational level:
Average annual income
A bonus remuneration within this field varies according to your experience and ranges from R25,000 – R50,000.
What skills are needed in financial management
An analytic mind
Analysis is a huge part of financial management, from considering what methods work to identify what techniques need to change. Financial management requires constant evaluation and, as a result, analysis is a skill necessary for the job.
One of the necessary skills in financial management comes from the importance of providing key information to management and stakeholders.
Eager to learn
In any field, it is important to constantly learn new tricks of the trade. Financial management is no different and the ability to learn is an important skill in the industry. This means constantly reading new material, finding new techniques, and exploring new methods is included in financial management. Taking a financial management short course is a great way to gain new understanding.
This month, we celebrate the greatness that is Nelson Mandela. As we fast approach Nelson Mandela Day (18 July), reflecting on his messages of hope and perseverance is inspiring and can be applied everywhere – especially entrepreneurship.
Nelson Mandela’s name will always be held high among the list of effective global leadership. Here’s how his messages of inspiration can help you lead your business to success.
No matter the difficulties, carry on
“Difficulties break some men but make others.”
Nelson Mandela has faced excruciating difficulty but what makes him a man of honour and resilience is the fact that even during these challenges, he never gave up. When you’re starting out, you’re going to face some hiccups. During this phase, it’s easy to throw in the towel but, it’s important to think of these bumps as little lessons.
The truth is that sometimes you’ll be faced with a challenge. The important part is how you overcome this and that you have overcome it. Before you think of giving up, think of all the times our former statesman has faced challenges and how he persevered.
Conquer your fears
“… judge me by how many times I fell down and got back up again.”
As a business owner, your biggest fear is that your business will fail. This negative thought before you start your business could demotivate you. Eventually, you’ll end up not wanting to start your business and perhaps regretting this decision.
You will have mishaps along the way. Instead of wallowing in your failures, take the lesson and start over again. Maybe you’ll get it right the next time, maybe it takes a third try. Don’t think of mistakes as ultimate failures but as lessons.
Impossible is nothing
“It always seems impossible until it’s done.”
Thinking that this client is too ‘big’ for you to land? Anything is a possibility. All you need to do is try. Of course, things may seem impossible because you haven’t taken action to achieve your goals.
So how do you get yourself out of this mindset? Research what needs to be done to achieve your “impossible” task. Once you have actionable steps, you’re able to clearly realise your goals and you’ll have the confidence to tackle them.
If you believe in what you’re doing, you’ll achieve great things
“Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do.”
If you’re passionate about what you’re doing, you’ll do almost everything you can to make your dreams come true. Your passion will not only ensure that you’ll work hard to achieve your dreams but also makes you enjoy the work.
No matter the challenges, if you’re passionate these small difficulties will be speed bumps that can be easily overcome. Dedication will equip you for the road ahead and will be your greatest asset.
Don’t be afraid of your dreams
“There is no passion to be found in playing small…”
No businessman has achieved great success by playing small. You have to take risks to reap the rewards and if you think your dreams are too big, perhaps it’s time to go back to the drawing board. Yes, being humble with what you can achieve is good but there are times that you need to dream bigger to achieve growth.
One day, your small business will grow. To help build a scalable company, you will need effective leadership, something Tata Madiba can teach us all. For more on how you can become an effective leader, try enrolling in short courses that will teach you practical information that can be applied to your work and personal life.
Creating something new whether it be a new idea or concept is by definition creativity. Innovation is using this creativity to change or enhance processes, people, teams or organizations.
Innovation and Creativity
Most businesses these days are all going through or facing change. An ever-changing global marketplace is a driving force behind these changes. With all the technology available at consumers fingertips and competition amongst business increasing, innovation and creativity have never been more important.
Rocío Lorenzo and her team surveyed 171 companies to find out if having a diverse workforce increased innovation. The answer was “Yes”. In a talk that will help you build a better, more robust company, she explains how your company can start producing fresher, more creative ideas by treating diversity as a competitive advantage.
Who is Rocío Lorenzo?
Rocío Lorenzo is a Partner and Managing Director at The Boston Consulting Group, based in Munich.
For the last fifteen years, Lorenzo has worked extensively in telecommunications and media. She has advised senior executives across Europe and the US on strategy development, growth programs and large scale transformations. In 2015 Rocío was named one of 25 female business leaders by Handelsblatt, HuffPost and Edition F. She is the author of several studies on diversity, including “The Mix that Matters: Innovation through Diversity,” and she leads the [email protected] Initiative in Munich.