What Makes The Difference In Leadership?

What Makes the Difference in Leadership?

Leadership is a term that is used a lot in the modern business world. Many companies emphasize the need for a strong, powerful leader. Struggling businesses prosper with the help of an effective leader and well-established ones earn even more profit and market share. A good leader can motivate his team and push his employees to their limit. He is an integral part of a successful organization. So what does it take to be a good, strong and effective leader? What makes the difference between a good leader and a bad one?

One of the key components to understanding leadership is having a clear understand what a leader actually is. Many people believe that a leader and a manager are synonyms. It is true that they go hand in hand and are both vital parts of an organization, but they have core differences. A manager is all about the mind, whereas a leader is about the soul. Managers promote stability and structure; leaders provide vision, values and interests. These differences are outlined in the table below:

Leader Manager

Visionary Rational

Passionate Consulting

Creative Persistent

Flexible Problem Solving

Inspiring Tough-minded

Innovative Analytical

Courageous Structured

Imaginative Deliberate

Experimental Authoritative

Initiates Change Stabilizing

Personal Power Position Power

A leader's job is to come up with an idea, vision or goal and inspire his subordinates to implement it. He is responsible for motivating them and getting them to give all they got to make his vision become a reality. A good leader will present his vision in a way that it will become his employees' personal goal to achieve what the leader wants. A manager's job then is to provide control, monitor the progress and give suggestions along the way, making sure that everything is running smoothly and according to the strategy. He is in charge of making sure that the vision that the leader has gets fulfilled, and the job is done in a way that is profitable to the company.

The way they achieve those goals and have the authority over their subordinates is through power. There are two main types of power: Position Power, possessed by a good manager and Personal Power, possessed by a good leader. Position power comes from the organization and the standards that it imposes on the hierarchy. This power is one of the most powerful tools in a manager's disposal. The three forms of this power are Legitimate, Reward and Coercive. Legitimate power is very basic and comes from the understanding that a supervisor has the authority over his subordinates. This power is undisputable and is understood by all employees, as long as the company has a well-defined hierarchy. For example, if a new regional manager is appointed, it is assumed that the factory staff understands that he is in charge and if he tells them to do something, they have to do it.

Reward power comes from the manager's ability to give out rewards for good performance, in the form of yearly bonuses or pay increases. For example, if a manager's team beat the annual profit estimate, they may receive an end-of-year bonus from their boss, which will act as an encouraging factor for them to try even harder the following year. That promotes the manager's overall power even further.

Coercive power is the opposite of reward power and comes from the manager's ability to punish people for bad performance. If a manager's team didn't perform as well as they could have, the manager is in the position to punish them by not giving them an annual bonus, or leaving negative feedback in their file, decreasing their chances for promotion or finding a better job. The use of this power can have a negative effect on the manager, as he could be perceived by his employees as a tyrant, which doesn't leave much opportunity to establish personal relationships with his team.

Personal Power is the other type of power and its two forms include Expert Power and Referent Power. Personal power is a powerful tool at a leader's disposal and if used wisely can produce great results. It promotes respect, admiration and caring from the subordinates and establishes the leader in a company. Expert power comes from a leader's knowledge or skill in the area that he is working in. The source of this power comes from the employees' understanding that the leader has superior knowledge on the subject, therefore is worth listening to and following. For example, if a leader of a car manufacturer is an expert mechanic and proposes a new modification to one of the cars, his power will be undisputed because his team understands that he knows what he's talking about.

The other power in a leader's disposal is referent power which results from a leader's personality and his attitude towards his subordinates. The biggest and most desirable outcome of this form of power is subordinate commitment. That means that there is a strong admiration and respect for the leader and his decisions and the employees are willing to work extra to achieve the given goal. For a manager and leader alike, understanding and using these powers means being effective and leading the business to prosperity and profits.

To further understand what makes a difference in leadership, it is important to acknowledge the two types of leaders: Autocratic and Democratic. An autocratic leader relies mostly on his own knowledge and judgment and tells people exactly what he wants them to do. He centralizes authority around himself and uses position power to enforce his rules. He sets clear deadlines and makes sure that everyone does their work exactly how he wants them to. In some situations, this approach works best. The other leadership style is democratic, which is more lenient and promotes empowerment and freedom for employees. This style promotes creativity of the subordinates and in many cases makes them feel more like a big part of the business, making a change, as opposed to just someone following strict orders. It encourages participation, and the leader's position is more like a guide than a boss. He gives the destination and it's up to his subordinates to decide which route to take to get there. There is an ongoing debate which of these styles is better. As in many business related issues, there is no right answer, but for a give situation one of