MANAGEMENT VERSUS LEADERSHIP
from Kotter, John P. Leading Change. Boston: Harvard Business School P, 25-30.

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Management is a set of processes that can keep a complicated system of people and technology running smoothly. The most important aspects of management include planning, budgeting, organizing, staffing, controlling, and problem solving. Leadership is a set of processes that creates organizations in the first place or adapts them to significantly changing circumstances. Leadership defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles (see exhibit 3 on the following page). [26] This distinction is absolutely crucial for our purposes here: A close look at exhibits 2 and 3 shows that successful transformation is 70 to 90 percent leadership and only 10 to 30 percent management. Yet for historical reasons, many organizations [27] today don't have much leadership. And almost everyone thinks about the problem here as one of managing change.

For most of this century, as we created thousands and thousands of large organizations for the first time in human history, we didn't have enough good managers to keep all those bureaucracies functioning. So many companies and universities developed management programs, and hundreds and thousands of people were encouraged to learn management on the job. And they did. But people were taught little about leadership. To some degree, management was emphasized because it's easier to teach than leadership. But even more so, management was the main item on the twentieth‑century agenda because that's what was needed. For every entrepreneur or business builder who was a leader, we needed hundreds of managers to run their ever‑growing enterprises.

Unfortunately for us today, this emphasis on management has often been institutionalized in corporate cultures that discourage employees from learning how to lead. Ironically, past success is usually the key ingredient in producing this outcome. The syndrome, as I have observed it on many occasions, goes like this: Success creates some degree of market dominance, which in turn produces much growth. After a while, keeping the ever‑larger organization under control becomes the primary challenge. So attention turns inward, and managerial competencies are nurtured. With a strong emphasis on management but not leadership, bureaucracy and an inward focus take over. But with continued success, the result mostly of market dominance, the problem often goes unaddressed and an unhealthy arrogance begins to evolve. All of these characteristics then make any transformation effort much more difficult. (See exhibit 4 on the following page.)

Arrogant managers can over-evaluate their current performance and competitive position, listen poorly, and learn slowly. Inwardly focused employees can have difficulty seeing the very forces that present threats and opportunities. Bureaucratic cultures can smother those who want to respond to shifting conditions. And the lack of leadership leaves no force inside these organizations to break out of the morass. [Exhibit 4 on page 28]

[29] The combination of cultures that resist change and managers who have not been taught how to create change is lethal. The errors described in chapter 1 are almost inevitable under these conditions. Sources of complacency are rarely attacked adequately because urgency is not an issue for people who have been asked all their lives merely to maintain the current system like a softly humming Swiss watch. A powerful enough guiding coalition with sufficient leadership is not created by people who have been taught to think in terms of hierarchy and management. Visions and strategies are not formulated by individuals who have learned only to deal with plans and budgets. Sufficient time and energy are never invested in communicating a new sense of direction to enough people—not surprising in light of a history of simply handing direct reports the latest plan. Structures, systems, lack of training, or supervisors are allowed to disempower employees who want to help implement the vision—predictable, given how little most managers have learned about empowerment. Victory is declared much too soon by people who have been instructed to think in terms of system cycle times: hours, days, or weeks, not years. And new approaches are seldom anchored in the organization's culture by people who have been taught to think in terms of formal structure, not culture. As a result, expensive acquisitions produce none of the hoped‑for synergies, dramatic down-sizings fail to get costs under control, huge reengineering projects take too long and provide too little benefit, and bold new strategies are never implemented well.

Employees in large, older firms often have difficulty getting a transformation process started because of the lack of leadership coupled with arrogance, insularity, and bureaucracy. In those organizations, where a change program is likely to be over-managed and under-led, there is a lot more pushing than pulling. Someone puts together a plan, hands it to people, and then tries to hold them accountable. Or someone makes a decision and demands that others accept it. The problem with this approach is that it is enormously difficult to enact by sheer force the big changes often needed today to make organizations perform bet‑ [30] ter. Transformation requires sacrifice, dedication, and creativity, none of which usually comes with coercion.

Efforts to effect change that are over-managed and under-led also tend to try to eliminate the inherent messiness of transformations. Eight stages are reduced to three. Seven projects are consolidated into two. Instead of involving hundreds or thousands of people, the initiative is handled mostly by a small group. The net result is almost always very disappointing.

Managing change is important. Without competent management, the transformation process can get out of control. But for most organizations, the much bigger challenge is leading change. Only leadership can blast through the many sources of corporate inertia. Only leadership can motivate the actions needed to alter behavior in any significant way. Only leadership can get change to stick by anchoring it in the very culture of an organization.

As you'll see in the next few chapters, this leadership often begins with just one or two people. But in anything but the very smallest of organizations, that number needs to grow and grow over time. The solution to the change problem is not one larger‑than‑life individual who charms thousands into being obedient followers. Modern organizations are far too complex to be transformed by a single giant. Many people need to help with the leadership task, not by attempting to imitate the likes of Winston Churchill or Martin Luther King, Jr., but by modestly assisting with the leadership agenda in their spheres of activity.