Hopefully my last blog on the difference between leadership and management piqued your interest. If it didn’t, it should have. Why do I say this?
Think about the executive management team of your bank. What are the ages of your executives? In many banks today, the executive management team averages 60 plus years of age. Now think of your regional managers, what are their ages? Again, the average age is likely 50 to 55 years of age. This could easily turn into a discussion on the critical need for banks to invest more energy into developing tomorrow’s leaders as part of their succession planning efforts. But it won’t! In fact, I will be discussing this subject in future blogs so stay tuned!
Leadership vs. Management Further Distinguished
What is the difference between management and leadership? This is the question I started with in my last blog. The subject is so vast, it bears continuing to explore and learn the differences so supervisors, managers and executives can consciously behave in optimal ways in any situation. Idealistic I know, but certainly worth striving for. The biggest difference between managers and leaders is the way they motivate and focus employees.
Simply said, leadership is a passion, management is a profession. While management is a title and a “job,” any employee in your bank can distinguish themselves as a leader regardless of their title, responsibilities or seniority. Some of the best leaders I’ve met from over 25 years of senior level consulting don’t have the title. But they do have the passion and the behaviors!
In A Very Traditional Sense…
Managers Have Subordinates
By definition, managers have subordinates, leaders have followers. The relationship between a manager and their subordinates is a traditional “hierarchy”. Unless their title is given as a mark of seniority, a manager’s power over others is through formal authority.
Leaders Have Followers
Leaders do not have subordinates as managers do, they have followers and devotees. True leaders have an ability to connect with both the hearts and minds of employees. They understand a good employee will give you their mind, but to become a great employee, you have to find a way to connect with, and engage, the heart of an employee. Effective leaders invest the time to develop authentic, meaningful relationships with employees. The conversations these leaders have, transcend traditional work related subjects. Creating an environment where employees feel safe to be real goes a long way to engaging the heart and converting employees into followers.
Managers Use a Dictatorial Management Style
Managers have a position of authority vested in them by the bank, and their subordinates work for them and largely do as they are told. Human nature being what it is, most of us will do just enough to get the reward. But we won’t do a whole lot more. Employees will give a good manager a “solid day’s work” but at 5:02PM in the afternoon, they are out the door! This management style is authoritarian or dictatorial in nature in that the manager tells or directs the subordinate what to do, and the subordinate does this because they have been promised a reward (at minimum their salary) for doing so. A dictatorial management style doesn’t mean that a manager is rude, arrogant and disrespectful. It simply refers to where the authority lies and how decisions get made.
Leaders Use a Democratic Leadership Style
Telling people what to do does not inspire them. Often, it can have quite the opposite effect. Leaders understand the power of creating an appealing vision where employees play an integral role in the creation of that vision and the decision making process. Facilitating processes that create a far more engaged and passionate work force is a primary leadership goal. A leader focuses on where a team, department or organization needs to go and strives to allow employees maximum say so and decision making authority throughout the process. That’s where employee buy-in and engagement come from.
The Focus of a Manager
Managers are paid to get things done (they are subordinates too), often within tight time constraints. Thus, they naturally pass on this work focus to their subordinates. Managers know (or should know) that employee discipline often mirrors manager discipline. Scary thought, right? To run an efficient and effective team or department that gets things done on time with a high degree of quality and very few mistakes is an art that most managers can improve on. At least 75% of employee, team or departmental mistakes are linked to managerial and process shortcomings. Successful managers rely on organizational structures, defined processes and a high degree of oversight to boost productivity.
The Focus of a Leader
Leaders on the other hand boost productivity through inspiration and investment…emotional investment. Leaders are paid to develop, coach and mentor employees. Leaders understand that their employees are one of the few things that differentiate their bank from their competitors. For this reason, they are not afraid to invest time and financial resources to grow the capacity of their employees. Leaders understand that to be a world class organization, you have to develop world class employees. For a bank filled with mostly C-Players and B-Players, financial performance and growth will be stymied. Leaders know that employee growth is a strong contributor to bank growth and accordingly insure their bank leverages both internal and external resources to develop employees.
Managers Seek Reliability
“Running smoothly” is confirmation of a high functioning team or department for a manager. It’s not enough to have the right players on the bus today; effective managers strive to make sure the right players are in the right seats on the bus. Deviation from the standard is frowned on because let’s face it, if it’s not broken why fix it? For an industry like banking, this kind of mindset and skill set is extremely valuable for the predictability and consistency needed when dealing with customer’s finances and to adhere to strict regulatory standards.
Leaders Seek Ideas and Innovation
Like the farmer who cultivates the soil and fertilizes their crops, today’s leaders need to be effective at cultivating the minds of employees in order to grow ideas. The mind of employee is the fertile soil a leader needs to spawn innovative new ideas that lead to process improvement and improved service delivery. Leaders know that innovation will never be birthed from a closed mind. They work hard to create an environment where employees are encouraged to think about how to streamline or optimize some aspect of the business. In short, they strive to cultivate open-mindedness in their departments. The lowest level employees are often the ones that have good ideas and perspectives on how to improve things in large part because they spend so much time interacting with customers. Leaders know that a meaningful idea that could improve the business can come from any employee at any level on the bank and that is why they are willing to make the emotional investment in employees at every level in the bank.In summary
This table summarizes the above ideas (and more) and gives a sense of the differences between being a leader and being a manager. This is, of course, an illustrative characterization. There is a whole spectrum between either ends of these scales and it is the effective manager/leader that is able to flow within this range in an effort to maximize their effectiveness.
It could be said that leadership is a passion and management is a profession. Leadership is about growth, humility and accomplishing lofty goals through shared vision, shared passions, shared decision-making and shared efforts. Management is about effectiveness, efficiency and quality outputs. To be clear, both are essential and equally necessary if a bank is going to grow and evolve with the times.
In conclusion, the many studies conducted on employee engagement (See Gallop) prove that there is a quantifiable and undeniable economic benefit to a company that is able to engage both the mind and heart of their employees. Clearly both effective management and effective leadership are needed to maximize employee productivity.
As you can tell, I have a passion for this subject. If you would like to discuss some management and leadership situation in your bank, please give me a call. My personal cell number is 760-445-4980.
Here’s to your management and leadership success!