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Defining the desirable qualities of a leader proves a tall task. While I have read endlessly about them and gleaned notions, I never managed to pinpoint a tried-and-true effective leader archetype.

Perhaps that directly results from numerous forms of leadership existing without a true mold fitting all circumstances. Many people have written about the leaders vs. managers dynamic and the varying forms of how leadership manifests.

Below represents my take on distinguishing between three primary types.

Leaders vs. Managers

It would seem many leadership philosophies exist, with each having some unique attributes with significant overlap appearing as well.

To arrange all of this clearly, I chose three unique brands of leadership to construct a simplified model for understanding leaders vs. managers.

Specifically, in my Leaders vs. Managers model, I place Authentic Leadership on one end of the continuum to represent the “Leader” and Transactional Leader on the other end of the continuum to represent the “Manager.” As a nod to the shades of gray between these two leadership types, I have placed Transformational Leader as the midpoint between them.

Broadly speaking, when accomplishing a goal, an Authentic Leader inspires people to action while a Transactional Leader exercises a narrow sense of leadership predicated on the control and direction of people. In the middle lies the Transformational Leader who relies on elements of both.

All three represent styles of leadership, but fall differently on the leaders vs. managers continuum I lay out. Of particular importance are the following contrasts (highlighted further below):

  • They all lead, yet use different styles.
  • They all accomplish goals, though approach them differently.
  • They all coordinate people to action, however employ different means for doing so.

Three Primary Leadership Styles

Authentic leaders engender legitimacy through honest relationships with followers, value each other’s input, and build their platforms on ethical foundations. They utilize inspiration, charisma, vision and competence to deliver change. Often, people confuse these leaders with purely charismatic leaders, however, authentic leaders employ charisma with ethics . Therefore, authentic leaders possess charisma but also a strong moral compass to guide them.

Transformational leaders serve as a hybrid of authentic and transactional leaders by working with groups to identify needed change, creating (or borrowing) a vision to guide the change through inspiration and charisma, and finally executing the change in tandem with committed group members.

Transactional leaders more closely align with what we commonly refer to as managers. These people focus on supervision, organization and performance to accomplish tasks. They utilize rank and order to drive decisions and group activity. Often, they have more success in the short term, but their somewhat authoritarian approach, predicated on a reward/punishment system, rarely inspires followership in the long-term.

In short, authentic leadership requires empathy and feedback to understand the concerns of others while transactional leaders (managers) focus primarily on the chain of command.

All three styles have skills aspiring leaders can learn though authentic leaders have an intrinsic understanding of how to lead. Their ability to inspire through a mix of inspiration, charisma, vision, and competence separate them from the others- however all require relevant experience and purpose.

After reviewing these three leadership styles broadly, the following represents a succinct way to understand the relationship between the two endpoints of the leaders vs. managers continuum :

To be a good leader, you need to be a decent manager. However, to be a good manager, you don’t need to be a decent leader.

And just as important:

Anyone can be a manager. Only those he or she manages can call them a leader.

In other words, leaders require management skills while managers do not need leadership skills. They can exist as a standalone role. And leaders earn that title from those who follow them.

For examples of the key distinctions between them, the following separations apply.

In this instance, we focus on authentic vs. transactional leadership because transformational leaders can belong to one or the other while authentic leaders can show both qualities simultaneously.

Leading People vs Managing Work

When it comes to motivating people toward a shared goal, leadership skills become requisite. Often, this entails using persuasion, a mission-driven rationale, and empathy. By definition, leadership refers to an individual’s ability to influence, motivate and empower others to contribute toward a desired goal.

The best leaders inspire, have direction and operate according to a plan to take their group in the right direction. Though tread cautiously. You can be inspirational all day, but if you cannot manage your followers, you have just wasted their time.

Transactional leadership consists of controlling and coordinating a group of people to accomplish a designated goal. This comes from managing workflows, delegating assignments, and hitting project timelines.

Both move people toward a goal, but the primary differentiators between leaders vs. managers comes from vision and the use of inspiration and charisma. Leaders rely on these to complete a task while managers exercise oversight, power and control.

Circles of Influence vs Circles of Power

Leaders and managers leverage their competencies differently. Leaders rely on circles of influence to implement actions through charisma, competency, and group buy-in on a mission’s objectives.

Managers choose to rely on organizational rank and hierarchy with the power that comes with it. They use circles of power to move their goals forward.

Unlocking Value vs Quantifying Work

Leaders see things as they could be and rally people around this vision using charisma, competence, and trust for this future state being possible. By seeing pathways for growth and achievement outside the current norms, leaders can unlock value.

Managers choose to work within established processes and quantify their work progress, highlighting the value they have attained. Specifically, managers quantify their value by pointing to the progress made by their team instead of adding value themselves.

For those who focus their teams’ efforts on specific tasks while dealing with work within their own competencies, these leaders unlock value for themselves and their followers. Leading by example and leading by enabling people serve as hallmarks of action-based leadership as opposed to influencing-based leadership.

Mission-Driven vs Process-Oriented

Leaders frame their efforts in the scheme of a mission and articulate how what followers do helps or impedes this vision. A large part of leadership comes from the ability to set a good example. Subordinates often notice which behavior gets rewarded and which standards come down from the top.

Managers focus on the process and delivering on goals. Their scope of work does not contemplate redefining the status quo, rather operating within it.

On Becoming a Leader

Now, with better understanding of how to separate leaders vs. managers, how do we apply this to our own lives, should we wish to lead?

In the New York Times, Adam Bryant penned a regular column called Corner Office, a regular interview series with successful CEOs. As his final column, before passing it along to another columnist, he reflects upon his findings from the 525 interviews he had conducted over his nearly 10-year column tenure.

In it, he identifies some recurring themes, notably that CEOs possess a universal love of challenges and a strong tendency to have “applied curiosity,” meaning they always want to know how things work and wonder how to make them better.

Research from Russell Reynolds Associates, an executive search firm, finds successful CEOs, while not necessarily as extroverted and self-serving as stereotypes may suggest, tend to have a concentration of certain personality traits relative to the general population. In fact, the top traits include intensity and a bias toward action.

This says nothing of the leadership styles CEOs assume, but rather their ability to lead organizations forward. After all, to have a profile vaunted in a New York Times column about successful CEOs, you should at least have a tendency to rally the troops toward a common goal.

Therefore, to become a CEO (i.e., an effective leader), Bryant observes the following:

“People often try to crack the code for the best path to becoming a chief executive. Do finance people have an edge over marketers? How many international postings should you have? A variety of experiences is good, but at what point does breadth suggest a lack of focus?
It’s a natural impulse. In this age of Moneyball and big data, why not look for patterns?
The problem is that the world doesn’t really work that way. There are too many variables, many of them beyond your control, including luck, timing and personal chemistry.
The career trajectories of the [CEOs] I’ve interviewed are so varied that spotting trends is difficult, and a surprising number of the executives do not fit the stereotype of the straight-A student and class president who seemed destined to run a big company someday.
I’ve met [CEOs] who started out in theater, music, and teaching. Others had surprisingly low grades in school.”

In other words, attempting to extrapolate success from a specific background into leadership capability proves a futile effort. Think of this as a freeing proposition: the way to leadership does not stem from path dependence.
Said differently, no one path leads you to becoming an effective leader, no matter where you fall on the leader vs. manager continuum. Instead, you should consider the following steps to become a leader:

  1. Embrace challenges to force your growth. Discomfort and learning force growth and adaptation to change. This diverse experience from facing constant challenge and managing to overcome engender a stronger level of growth and personal development.
  2. Partner with people who make you think differently. Focus on building the necessary skills to become an effective leader through partnering with people who make you think about things differently.
  3. Force yourself to look past preconceived notions of what is possible. Unconscious biases, when not handled appropriately, can limit our way of thinking. By mitigating the harmful effects of unconscious bias, you can build your emotional intelligence and advance your career.
  4. Focus on doing your current job well. Believe it or not, most successful CEOs interviewed in Brandt’s column shared one final trait delivering them to their CEO roles: focus on doing your current job exceptionally well and not on the next step after your present position. This does not mean limiting your ambition, but rather channeling your efforts on building a track record of success and reaching financial independence along the way.
About the Author

Riley Adams is the Founder and CEO of WealthUp (previously Young and the Invested). He is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.

His work has appeared in major publications like Kiplinger, MarketWatch, MSN, TurboTax, Nasdaq, Yahoo! Finance, The Globe and Mail, and CNBC’s Acorns. Riley currently holds areas of expertise in investing, taxes, real estate, cryptocurrencies and personal finance where he has been cited as an authoritative source in outlets like CNBC, Time, NBC News, APM’s Marketplace, HuffPost, Business Insider, Slate, NerdWallet, Investopedia, The Balance and Fast Company.

Riley holds a Masters of Science in Applied Economics and Demography from Pennsylvania State University and a Bachelor of Arts in Economics and Bachelor of Science in Business Administration and Finance from Centenary College of Louisiana.