Leadership and Management: The Power of Balance

A quick LinkedIn search shows over 70 million individuals listing leadership as a skill and more than 110 million as managers. While there's certainly overlap, at least 55 million of these 110 million professionals, by definition, perform below average – and the actual number might be even higher.

Many of us have been fortunate enough to work with outstanding managers or leaders. Throughout my career, I've gained invaluable knowledge from exceptional colleagues and mentors, such as how to dissect and reframe obstacles into solutions, foster teamwork and accountability, navigate difficult yet constructive conversations, and maintain focus on details without losing sight of the bigger picture. On the flip side, most of us have also experienced working with individuals who drained motivation rather than inspired, perpetuated ambiguity instead of teamwork, and took credit for results despite, not because of, their involvement. Thankfully, valuable lessons can be gleaned from these experiences as well.

Refining your personal leadership style allows you to remain authentic while inspiring others, motivating teams, and crafting a vision that people passionately strive to achieve. Likewise, your management style can be adapted to suit the organization and individuals; effective managers can recognize when a particular style is ineffective and adjust accordingly.

Enhancing these skills begins with self-awareness and a desire for improvement. Regrettably, as the Dunning-Kruger effect highlights, underperformers often overestimate their abilities, making them less likely to pursue self-improvement, much to our shared frustration. If you're still reading, congratulations – you're likely not one of them.

Leaders inspire by crafting visions for the future, while managers organize and execute to reach objectives. Managers grasp the significance of efficiency, consistency, and budgeting, adjusting their management styles to meet their organization's and employees' specific needs. Leaders stimulate creative thinking within their teams and foster a culture of collaboration and experimentation. Although these skill sets overlap, discerning the differences and striking the right balance between them profoundly impacts effectiveness and success.

Shifting from theory to application, let's examine specific instances of leaders and managers who exemplify the significance of harmonizing exceptional leadership with effective management. As you review these examples, reflect on the managers and leaders from your own career experiences – consider their strengths, weaknesses, and how they could have improved; contemplate what insights you can glean from them to nurture your personal and professional development as both a leader and manager.

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Inspiring Leaders/Weak Managers

Adam Neumann, former CEO of WeWork, was widely recognized as a visionary entrepreneur and charismatic leader who inspired trust in investors, employees, and customers. He astutely identified a niche in the real estate market and expanded the company's presence across numerous countries through strategic acquisitions and partnerships. However, his inadequate management skills, including impulsive decision-making, lack of transparency, and inability to tackle ongoing issues, cultivated a toxic work environment that negatively affected the company's performance. Neumann was ultimately forced to resign despite his initial successes as a leader.

Travis Kalanick co-founded Uber and transformed it into one of the most innovative and disruptive companies in the world. Known for his passion and dedication to the company's mission, he inspired employees and attracted top talent. However, as a manager, Kalanick faced significant challenges. His aggressive and confrontational nature frequently led to clashes with regulators, competitors, and employees. He was accused of nurturing a toxic workplace and promoting a culture of sexual harassment, discrimination, and unethical business practices. Criticized for his lack of accountability and transparency, Kalanick failed to address pressing concerns like driver safety and data privacy. In 2017, he resigned as CEO, leaving behind a legacy of problematic management despite his initial achievements as a visionary leader.

Martin Winterkorn, the former CEO of Volkswagen, was widely regarded as a powerful and visionary leader who prioritized innovation and technology. He developed Volkswagen's electric and hybrid vehicle programs and expanded its global reach to position the company as an industry leader. However, several aspects of his management style were often criticized, including his highly centralized and hierarchical corporate culture and his propensity for fostering a culture of fear and intimidation. Many believed Winterkorn's micromanagement hindered Volkswagen from adapting to changing market conditions. His inability to properly address the emissions crisis cost Volkswagen $40 billion.

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Strong Managers/Weak Leaders

Michael Eisner, former CEO of The Walt Disney Company, is often considered an accomplished manager who oversaw substantial growth and expansion for the organization. He successfully negotiated the acquisition of Capital Cities/ABC, developed multiple thriving theme parks and resorts, and invested in the company's animation division, which produced several successful films like The Lion King. However, as a leader, Eisner faced criticism for his contentious relationships with creative talent, micromanaging operations, and prioritizing financial concerns over artistic vision and creativity. His succession planning, including the controversial hiring of Michael Ovitz as his second-in-command, was also heavily criticized and cost Disney $140 million when Ovitz was fired approximately a year later. While Eisner's management style contributed to Disney's growth, his leadership was divisive and hindered innovation.

Jeffrey Immelt, former CEO of GE, presided over notable growth in GE's businesses during his tenure, with annual revenue increasing from $130 billion to $180 billion. He made strategic investments in new technologies to drive growth and profitability. However, his leadership was criticized for failing to effectively guide GE through challenges like declining profitability and growth rates far below historical trends. Immelt has been widely accused of making poor strategic decisions, such as prioritizing short-term financial gains over long-term growth and sustainability.

Great Managers/Great Leaders

Jeff Bezos, the founder and former CEO of Amazon, exemplified both strong management skills and effective leadership qualities, turning Amazon into one of the world's largest and most innovative companies. He fostered a culture of innovation, experimentation, and social responsibility, prioritizing customer satisfaction and guiding the development of groundbreaking products and services to meet their needs. Bezos made strategic investments in innovative technologies and infrastructure to support growth, implementing a rigorous performance evaluation system and a culture of data-driven decision-making and experimentation, leading to increased profitability and long-term shareholder value.

In addition to his management prowess, Bezos was a visionary leader who inspired and motivated his employees with his passion and enthusiasm for the company's mission. He was known for his ability to think big and take bold risks, encouraging his employees to think creatively and fostering a culture of innovation and experimentation. Committed to diversity and inclusion, he increased the representation of women and minorities in leadership positions at Amazon and focused on philanthropic efforts, such as addressing climate change. Bezos' effective leadership and management style enabled Amazon to consistently innovate and disrupt traditional industries, solidifying its position as one of the most influential companies in the world.

Indra Nooyi, the former CEO of PepsiCo, highlighted exceptional management and leadership skills, significantly contributing to the company's growth and success during her tenure. She focused on expanding PepsiCo's product portfolio and global reach through strategic acquisitions and investments, while implementing cost-cutting measures to enhance efficiency and profitability. Nooyi's close attention to data and market trends informed her decisions, helping her stay ahead of the competition, and her investment in research and development led to innovative new products and technologies.

As a visionary and people-focused leader, Nooyi had a clear vision for PepsiCo, prioritizing healthier products, which resulted in the divestitures of fast-food chains such as KFC and Pizza Hut. She was also a vocal advocate for sustainability and social responsibility, making efforts to reduce PepsiCo's environmental footprint and improve working conditions in its supply chain. Nooyi was a collaborative leader who worked closely with her team to achieve her goals, encouraged diversity and inclusion, and earned the respect and loyalty of her employees. Her strong communication skills allowed her to inspire and motivate employees to think creatively and take risks, fostering a culture of creativity and innovation at PepsiCo.

During his tenure as CEO of GE, Jack Welch was a highly effective leader and manager, known for his hands-on approach to management and focus on accountability and performance. He introduced several management practices, collectively known as "Welchism," which emphasized continuous improvement, efficiency, and simplification. Welch implemented a performance evaluation system that rewarded top-performing employees while weeding out underperformers. He grew GE through strategic acquisitions and divestitures, focusing on developing the company's core businesses and divesting from less profitable areas. Additionally, he made significant investments in research and development to create new products and technologies.

Beyond his impressive management skills, Welch was a charismatic and inspiring leader who prioritized his employees. He championed a "people-first" philosophy, valuing employee respect and empowerment to achieve their full potential. He cultivated a culture of innovation and risk-taking, encouraging his team to challenge the status quo and think creatively. Welch was also committed to social responsibility and sustainability, initiating initiatives to reduce GE's environmental footprint and promote diversity and inclusion.

Despite recent criticism for prioritizing shareholder value over all else, it's undeniable that Welch's leadership resulted in GE's market capitalization growing from $14 billion to $400 billion during his tenure. His ideas and strategies continue to be emulated by businesses worldwide.

GE provides an excellent opportunity to contrast a great leader and manager, Jack Welch, with a great manager but weak leader, Jeffrey Immelt. When Immelt succeeded Welch in 2001, GE continued to grow and expand its businesses but faced declining profits and growth. Under Welch's leadership, GE's average annual revenue increased by 400%, from $25 billion to $125 billion. In contrast, under Immelt's leadership, average annual revenue increased only 44%, from $130 billion in 2001 to a high of $181 billion in 2008, before declining to less than $100 billion when he retired in 2017.

Under Welch's leadership, GE's market cap skyrocketed from $14 billion to more than $400 billion; during Immelt’s tenure, it dropped by more than $150 billion. While financial performance isn't the sole indicator of success, and there are many factors that contribute to a company's financial performance, these metrics do provide us with some insight into the impact when great management is combined with great leadership. The comparison between Welch and Immelt highlights the importance of finding the right balance between strong management skills and inspiring leadership qualities for a company's long-term success.

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Conclusion

Exceptional managers and leaders can learn from their own experiences as well as the successes and failures of others. Striking the right balance between effective management and inspiring leadership is crucial to achieving lasting success in any organization. By honing both management and leadership skills, you can create a dynamic and empowering environment that encourages innovation, collaboration, and adaptability, and nurtures the next generation of strong and balanced leadership.

We'd all love to hear about your own experiences balancing the power of leadership and management, as your experiences can help others develop their own capabilities. Have you worked with inspiring leaders or exceptional managers who demonstrated this balance? Perhaps you've encountered individuals who excelled in one area but struggled in the other? Please share your insights, stories, and lessons learned in the comments.

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