Though the words leadership and management are often used interchangeably, the two are fundamentally different concepts. As the leader of a small company, it is essential to understand these differences and to be able to implement effective leadership techniques to grow your business.

According to Harvard Business School professor and recognized leadership author John Kotter,“The most important aspects of management include planning, budgeting, organizing, staffing, controlling, and problem solving. […] Leadership defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles.”i Offering another perspective, famed business writer Peter Drucker notes,“Management is doing things right; leadership is doing the right things.”

N. R. Narayana Murthy is the founder of Infosys, a leading Indian IT company. In 2005, he was ranked among the top 15 most admired global leaders by The Economist. The same year he was ranked among the world’s most respected business leaders, and was held as India’s most powerful CEO two years running. During an interview at the World Economic Forum in Davos, Murthy shared his thoughts on leadership:

Great leaders raise the aspirations of their followers; they make people more confident, energetic and enthusiastic. […] People, who are motivated by great leaders, dream big, make sacrifices and achieve miracles.”ii

The effective leader’s toolset includes the following abilities:

  • to think in broad terms and create a future vision for their company
  • to communicate this vision clearly and compellingly
  • to inspire others to achieve this vision
  • to identify, set and maintain a corporate culture consistent with this vision
  • to win the trust, loyalty, commitment and dedication of others in the pursuit of this vision

Perhaps Admiral Grace Hopper put it most succinctly when he famously said, “you manage things, you lead people.”

The following are some qualities, taken from Warren Bennis’On Becoming A Leader, that distinguish the idea of leadership from that of managementiii:

Leadership Management
Innovation Administration
Original Tried and true
Develop Maintain
Ideas Systems and structures
Trust Control
Long-range vision Short-range view
Challenges the status quo Accepts the status quo

Further reading

  • Kotter, John P. (1999).What Leaders Really Do. Boston: Harvard Business School Press.
  • Kotter, John P. (1996).Leading Change. Boston: Harvard Business School Press.


iKotter, J.P. (1996).Leading Change. Boston: Harvard Business Press.
iiWorld Economic Forum. (2010). Retrieved May 12, 2010, from
iiiBennis, W. (2003).On Becoming a Leader. Cambridge: Basic Books Publishing.