Leadership is different from management, but not for the reasons most people think. Leadership isn't mystical and mysterious. It has nothing to do with having “charisma” or other exotic personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than management or a replacement for it.

Most U.S. corporations today are over-managed and under-led. They need to develop their capacity to exercise leadership. Successful corporations don't wait for leaders to come along. They actively seek out people with leadership potential and expose them to career experiences designed to develop that potential. Indeed, with careful selection, nurturing, and encouragement, dozens of people can play important leadership roles in a business organization.

Management and leadership both involve deciding what needs to be done, creating networks of people to accomplish the agenda, and ensuring that the work actually gets done. Their work is complementary, but each system of action goes about the tasks in different ways.

1.	Planning and budgeting versus setting direction. 

The aim of management is predictability-orderly results. Leadership’s function is to produce change. Setting the direction of that change, therefore, is essential work. There’s nothing mystical about this work, but it is more inductive than planning and budgeting. It involves the search for patterns and relationships. And it doesn’t produce detailed plans; instead, direction-setting results in visions and the overarching strategies for realizing them. 

2.	Organizing and staffing versus aligning people.

Managers look for the right fit between people and jobs. This is essentially a design problem: setting up systems to ensure that plans are implemented precisely and efficiently. Leaders, however, look for the right fit between people and the vision. This is more of a communication problem. It involves getting a large number of people, inside and outside the company, first to believe in an alternative future – and then to take initiative based on that shared vision.

3.	Controlling activities and solving problems versus motivating and inspiring. 

Management strives to make it easy for people to complete routine jobs day after day. But since high energy is essential to overcoming the barriers to change, leaders attempt to touch people at their deepest levels – by stirring in them a sense of belong, idealism, and self-esteem.
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