Leaders and Motivation
“Management is doing things right; leadership is doing the right things.” - Peter Drucker
While a leader’s duty is to lead and a management’s duty is to manage the execution, we often find the role of leadership and management intertwined. According to researcher and CEO Vineet Nayar, there are three distinct differences in leadership and management (Nayar, 2013).
Leaders create value, managers count value. Managers are tasked to ensure their team adds value to the company. On the other hand, a leader creates value by creating valuable opportunities and strategies for the progress of the organisation and employees.
Leaders have circles of influence, while managers have circles of power. Well-perceived leaders are commonly sought for advice and ideas, while managers have the authority to approve or vet the tasks of their subordinates.
Leaders lead people, managers manage work. Management primarily manages tasks assigned and quality of task execution to achieve organisation’s objectives. While a leader inspires and facilitates employee’s contributions. Instead of power and control, influence and inspiration distinguish managers from leaders.
The role of a leader may overlap with the purview of a management role and a management task may demand a leadership perspective (Nienaber, 2010). Though both leadership and management have different primary functions, their purpose must be aligned to a common goal - working towards success of the organisation (Fauerbach, n.d.).
Analysis of Bill Gates’s Leadership
“As we look ahead into the next century, leaders will be those who empower others” - Bill Gates, co-founder of Microsoft.
Figure 1: Bill Gates. (Source: https://www.inc.com/jessica-stillman/bill-gates-just-advised-young-people-to-have-more-fun-science-agrees-play-helps-you-be-successful.html)
Bill Gates’s leadership style has been critically studied and adopted by leaders. In the early years of Microsoft, Gates was observed to have practiced transactional leadership that focuses on goals, precision of tasks and results that drives the growth of his company (Skye, 2023). However as Microsoft grew, Gates leadership style has evidently drifted into transformational (Rampton, 2019), as Microsoft seeks to drive innovative ideas and creativity to stay ahead of changes and trends (Sharma, 2020).
How Does Transformational and Transactional Leadership Differ?
Figure 2: Transactional vs. Transformational Leadership. (Source: https://www.floridatechonline.com/blog/psychology/the-difference-between-transactional-and-transformational-leadership/)
In typical transactional leadership, a leader operates within a strict framework that runs on the fundamentals of control and commands. Whilst, transformational leadership involves a high level of cooperation, communication, and constant motivation to drive desired results (Aarons, 2006). The key difference is that transactional leadership commits to getting tasks done, while transformational leadership commits to inspiring employees to take action.
In the realm of reality, the practice of transformational and transactional leadership relies on the need as well as circumstances of the company. When Microsoft started in 1975, Gates led his team by enforcing his right to be critical and confrontational (Zitelmann, 2020). In the 1993 Gates biography Hard Drive: Bill Gates and the Making of the Microsoft Empire written by two of his early Microsoft employees, Gates was described as notorious for his temper and well known for sending late-night hypercritical emails or also called “flame mail” (Wallace & Erickson, 1992). Gates’s tough transactional leadership was impactful to the growth of Microsoft till the mid 1990s (Zitelmann, 2020), before the emerging of fierce competitors and fast paced changes in user demands.
As Microsoft meets higher demands, employments and challenges, Gates approach to leadership shifted to transformational (Rampton, 2019) as it was imperative to ensure the ideas and actions of his employees aligned with the vision Gates has of Microsoft.
Impact of Leadership on Organisation
A study on leader’s behaviour and its effect on the company’s profitability researched by Daniel Goleman for Harvard Business Review revealed that a leader’s behaviour and working style impact 30% of the business’s economic performance (Goleman, 2019). High levels of engagement and retention of team members with their leaders have proven to enhance customer service, performance, and productivity - all of which contribute to increased overall profitability.
According to a survey in the UK, out of 2,100 workers, 43% of workers have quit their jobs due to their leader (Urquhart, 2022). This figure is very concerning as it is costly to the organisation to lose valuable team players. Hiring, onboarding, and training new hires is more expensive than keeping existing ones (Tenney, 2020). The expenses incurred in the recruitment process might have a detrimental effect on the economy of an organisation.
Recommendation
As we observe leadership and management roles, we discover various leadership qualities and methods one can choose to embody. However, it's important that the applied leadership style brings the most value to the organisation. Transactional leadership is most needed for a new company to grow and get results from strategies applied. But in the long term, for a company to champion its industry by staying ahead and being innovative, the team needs to be led by a transformational leader who can inspire team players to be creative and desire to excel. Hence, there is no one way of applying leadership throughout. A leader needs to be able to understand the priorities and direction needed for the company at present and apply the right leadership to the employees.
References
Aarons, G. (2006). Transformational and Transactional Leadership: Association with Attitudes Toward Evidence-Based Practice. Psychiatr Serv. 2006 Aug;57(8):1162-9. doi: 10.1176/ps.2006.57.8.1162. PMID: 16870968; PMCID: PMC1876730.
Goleman, D. (2019). Leadership That Gets Results. Harvard Business Review. Retrieved from: https://med.stanford.edu/content/dam/sm/CME/documents/Goleman-20--20Leadership-20That-20Gets-20Results-20093019-20-1-.pdf
Nayar, V. (2013, August 2). Three Differences Between Managers and Leaders. Harvard Business Review. Retrieved from: https://hbr.org/2013/08/tests-of-a-leadership-transiti
Nienaber, H. (2010, June 1). Conceptualisation of management and leadership. Emerald Publishing Limited. Retrieved from: https://www.emerald.com/insight/content/doi/10.1108/00251741011043867/full/html
Rampton, J. (2019, September 9). How Bill Gates Became a Leadership Legend. Entrepreneur Media LLC. Retrieved from: https://www.entrepreneur.com/business-news/how-bill-gates-became-a-leadership-legend/250607
Sharma, Y. (2020, June 17). Bill Gates as a Leader. LinkedIn. Retrieved from: https://www.linkedin.com/pulse/bill-gates-leader-yati-sharma/
Skye, E. (2023, January 26). What Is Transactional Leadership and How Does It Work? Entrepreneur Media LLC. Retrieved from: https://www.entrepreneur.com/starting-a-business/what-is-transactional-leadership-and-how-does-it-work/443667#:~:text=Bill%20Gates%20is%20the%20founder,notorious%20for%20his%20 transactional%20 leadership.
Tenney, M. (2020, January 10). How Leadership Affects Organizational Success. Business Leadership Today. Retrieved from: https://businessleadershiptoday.com/how-does-leadership-affect-organizational-success/
Urquhart, J. (2022, May 12). Two in five employees have quit because of bad manager, study finds. People Management. Retrieved from: https://www.peoplemanagement.co.uk/article/1755785/two-five-employees-quit-bad-manager-study-finds
Wallace, J. & Erickson, J. (1992, April 30). HARD DRIVE Bill Gates and the Making of the Microsoft Empire. Harper Business.
Zitelmann, R. (2020, February 24). Bill Gates was an angry, difficult boss in early Microsoft days—here’s why employees still liked him. CNBC LLC. Retrieved from: https://www.cnbc.com/2020/02/24/bill-gates-was-difficult-boss-in-early-microsoft-days-but-employees-still-liked-him.html