People, Expense or Investment?

There are two distinct mindsets in business today with regards to the people who make up an organization. One mindset, the one I’ll call a managerial mindset says that people are an expense. The other mindset, the one I’ll call a leadership mindset says that people are an investment. 

The difference between those two mindsets is huge!

Let’s say you’re currently occupying a leadership position and you have a team member who isn’t quite getting the job done. If you think to yourself you’re going to have to “spend time on” that person to get them up to speed then you likely have a managerial mindset.

On the other hand let’s say you see that same person. If you think to yourself I’m going to “invest time with” that person to help get them achieve their potential then you have a leadership mindset. 

Your mindset will affect every single interaction you have with your people. 

That’s because we almost instinctively manage expenses. The thought “spend time on” indicates you see people as an expense. Even if only subconsciously. Your people will pick up on that mindset and respond accordingly. They will act as an expense, someone merely hired to be a cog in the wheel. They will resist being the asset that they could be, even if only subconsciously. 

If you see your people as an expense then you will try to manage them. That will cause YOU enormous issues. Do you understand what that means? It means if you have personnel issues then your mindset towards your people is likely the biggest cause.  

When you have a leadership mindset your thoughts regarding people tend to be much more on the “invest time with” side. You realize people can’t be managed, they must be led. That mindset helps you to care about your people. You realize that your success as a leader is completely dependent upon the success of your people. 

Your people will pick up on that mindset and respond accordingly. They will see themselves as someone who brings value to the organization. They will understand that what they do matters and they will commit to do it to the best of their ability. They will give a 100% effort because they know you are committed to them and they will respond with a commitment of their own. 

There are no documented instances of organizations that saw their people as an expense succeeding long term. There are however well documented instances of companies that were in business a long time “adapting” their thinking to one of “people are an expense.” Their demise soon followed. 

By the way, if you’re wondering why a company would suddenly change to a “people are an expense” philosophy I have a one word explanation for you. Consultant! Actually that’s not fair, most consultants are firmly on the “people are an investment” side. It’s the big consulting firms who promote the “people are an expense” concept. They encourage companies to save money by cutting people expenses. They also encourage you to pay them a substantial percentage of that “savings.” 

If you’re in a leadership position then you should know that your first investment must be in your people. New people, young people, experienced people are all worthy investments. Those investments provide a near guaranteed ROI for your organization. 

If your plan to make money includes cutting expenses by cutting people then you should know that’s very short term thinking. You should also know that short term thinking never leads to long term success.

Managing vs Leading – Part Two

When you’re promoted to a leadership position it would be great if leadership skills came with the promotion. Unfortunately they don’t. More unfortunately, many new leaders act as if their new position, their new title, and their new office come with an entirely new set of skills that include a new way of thinking.

They couldn’t be more wrong. While you can be promoted to a position of leadership you cannot be promoted to leader. You must earn earn the right to lead. Earning that right begins when you realize that leadership has nothing to do with your title or position. Those things might make you a boss but they do not make you a leader. The good news is that once you realize that leadership isn’t about a position or title you also realize that you don’t need a title or leadership position to lead.

That’s because leadership is all about influence. Being a boss or a manager is more about authority. Influence gives you the opportunity to earn the commitment of other people. Authority only gives you the opportunity to force people to comply with your directives.

The fastest most effective way to influence other people is to demonstrate to them that you care for them. Notice that I didn’t say care about them. I said care for them. The difference is significant.

Anyone in a leadership position cares about the people they are supposed to lead. They care about their productivity. They care about their attitude. They care about their attendance. They care about the people they are supposed to lead getting the work done. They care about lots of things when it comes to the people they are supposed to lead.

But an Authentic Leaders cares for the people they lead. They care for them as individual human beings first and members of the organization second. The people they lead are more important than the task they ask them to complete. The people they lead are more important than their attendance record at work. Authentic Leaders don’t worry about the attitude of the people they lead. They create an environment of positivity that fosters a consistent positive attitude. They do all of that because they care for the people they are responsible to lead.

Authentic Leaders make a difference, a positive difference, in the lives of the people they lead and they don’t need a leadership position or a fancy title to make that happen.

Are showing your people that you care about them or are you demonstrating on a daily basis that you care for them? Do you invest the time required to know the people you lead? Do you know their goals, both personal and professional? Do you know the challenges they face in their lives. Do you know how you can help them achieve those goals and deal with those challenges?

If you can answer those questions with a yes then it’s likely that you are also demonstrating that you truly care for the people you lead. It is also almost a certainty that you’re an Authentic Leader!

The Trouble with Managing People

I write about this topic from time-to-time but it never gets old. People still make this leadership mistake with great regularity.

 

The mistake they make is trying to use their leadership position to manage people. Let me say this yet again: managing people is impossible. People refuse to be managed, they want to be led. 

 

For those of you who refuse to acknowledge the difference between managing and leading I say this: you are doomed to a life of limited leadership. Worse, you have sentenced the people you are supposed to be leading to a life of limited potential.

 

It really is that big of a deal that you understand the very real difference between managing and leading.

 

You manage things. Things like a budget, a building, and a process. You manage things that don’t think, don’t have feelings, don’t have goals and objectives, and don’t care one iota what you think of them. 

 

But people do think, they do have feelings, they (hopefully) have goals and objectives. And they care what you as their leader think of them. That’s why they must be led, not managed.

 

People who feel managed are most always under-performers. Even if they are doing well they would do better if they were led instead of managed. People who feel managed are frequently said to be “problem people” in their workplace. The truth is that they are unlikely to be the actual problem. It’s far more likely that the problem is the person who is supposed to be leading them but is managing them instead. 

 

There are people who would tell you that the difference between managing and leading is pure semantics. But they would be mistaken. The differences are substantial and one of the biggest ones is mindset. Managers can afford to be dispassionate, in fact it’s a strength for managers. Leaders must be passionate. They have to truly care about the people they lead. They have to be as motivated to help their people succeed as they are to succeed themselves. 

 

A management mindset sees people as an asset or as capital to be used. Managers think in terms of “spending time on” their people when their people need help. A leadership mindset sees people as a human being to be nurtured and developed. Leaders think of “investing time with” their people when their people need help. 

 

The difference in outcomes produced by those two mindsets is like night and day. 

 

I know you’re not going to like this but if you have “problem people” in your organization then you need to make certain that you are not the root of the problem. If you’re trying to manage your people then the “problem” with your people is most likely you.


Leaders lead people and managers manage stuff. The best leaders know how…and when, to manage and the best managers know how…and when, to lead. There’s no crime in not being able to do both, you just have to acknowledge it and not try to manage people who need to be led.

 

 

When Leadership is Lacking

Some of you will find this post lacking. You’ll find it off the mark because you believe that management and leadership are one in the same. You are convinced they are two words that describe the identical characteristics and skills. 

 

Before I write this next sentence I should remind you that I was a long time member of the Dale Carnegie organization. I believe in and try to practice the principles set forth in the all time great book written by Mr. Carnegie, “How to Win Friends and Influence People.” 

 

One of the principles says to never tell a person they are wrong. That is the principle I’m going to violate in this next sentence. I’m going to violate it because this is so important that I want to say it as directly as I can. So here we go…

 

If you believe that management and leadership are identical then you are wrong. You’re about as wrong as wrong can be. 

 

Let’s be clear, all organizations need both management and leadership. The same person can and frequently does possess both skill sets. But many times, they do not. When they don’t it is usually the leadership skills that are missing. 

 

When leadership is lacking in any organization then managing fills the gap. That creates a multitude of issues within the organization because human beings resist being managed. They insist on being led.

 

We manage things, things like budgets, buildings, inventories, etc. Things don’t care if you are ethical. Things don’t know if you say one thing and do another. Things don’t know if your’re abusing them or not. Things don’t get hurt feelings when you use or trust one of them more than the other. Things don’t care if you care for them or not. Things don’t get emotional…ever. 

 

Human beings have been known to be emotional. A leader interacts with another human being’s life. When you are involved with another person’s life and have any level of influence on it then that person wants to know if you care for them. They insist that you are ethical and fair. They need to feel trusted. They need to know they matter. They need to be recognized for their efforts. 

 

Showing you care, ethical behavior, trust building integrity, showing people they matter, and providing consistent recognition are all leadership characteristics. 

 

When you apply management principles to situations where you should be showing leadership characteristics you often make the situation worse. Thats why it is so important to understand the difference between managing and leading. Too many people in leadership positions lack leadership skills. Often they are not even aware of it. They unknowingly fill that gap by trying to manage people. 

 

Research shows that between 70 and 80 percent of people in leadership positions have fewer than 5 hours of formal leadership training. Many have absolutely none. Companies that wouldn’t think of allowing their people to do “things” without training regularly put people in charge of their greatest asset (people) with no training at all. 

 

That’s crazy when you think about it. But it seems that many organizations don’t think about it. 


Leaders who lead people instead of managing them eliminate most “people issues” before they begin. Don’t make the all too common mistake of thinking that management and leadership are interchangeable words. They are vastly different skill sets and so are the results that people will provide their organization when they are led instead of managed. 

The Reward of Leadership

Managing people might be the most difficult, least rewarding thing a person can attempt.

 

On the other hand leading people is actually far easier and way more rewarding. In fact, leading people is one of the most rewarding things anyone can ever do. 

 

I don’t want to give anyone the impressive that leading others is easy, it’s just easier, far easier, than attempting to manage them. It’s easier because managing people is impossible. It’s impossible because people refuse to be managed. 

 

People need and want leadership not management.

 

Leadership is about people while managing is about things. If you’re trying to manage people then you’re treating those people like things and that doesn’t work. 


There are no doubt managers reading this who believe managing and leading are one and the same. I can only wonder how they have time to read anything considering how many problems they create for themselves with that kind of mindset. Could it be they just don’t deal with the problems they create?

 

Most every “people problem” that ends up in an HR Department comes directly from attempting to manage people. The vast majority of turnover comes from managing people. The overwhelming majority of “attitude issues” is directly linked to people feeling managed instead of led. When you keep in mind that over 70% of employee terminations result from some form of attitude issue it seems like it would be a good idea to not create even more. 

 

Managing people may seem easier than investing a part of yourself in leading them but attempting to manage another human being is like attempting to go boating without water. It’s not going to happen. 

 

While leading others requires a greater investment by the leader in the lives of those they would lead the return on that investment can be huge. It can be life altering, for both the leader and the led. It is richly rewarding and it’s a reward that money cannot buy. 

 

Authentic Leaders, and particularly Authentic Servant Leaders, lead because they want to make a positive difference in the lives of those they lead. A simply thank you from their people is worth more than all the tea in China. That thank you is pure gold. Knowing you’ve made a positive difference for someone is why true leaders lead.

 

Okay, time for an aside here….my dad would frequently say something was worth more than “all the tea in China.” Having been to China only once I didn’t notice an unusually large amount of tea. Does anyone know where that saying came from? 

 

Anyway, if you want to make a difference in the life of someone else then try to manage them. It won’t be a difference they will thank you for but it will be a difference they will remember. If you want that difference to be positive then make the effort to authentically lead them. 


Knowing you have made a positive difference in the life of another person is a reward that money will never be able to buy. 


Are You a Manager Who Thinks They are Leading?

If you’re doing it for your business, it’s managing. If you’re doing it for your people, it’s leading.

 

You would be hard pressed today to find many people complaining about being “over-led.” You would not however have to look very far to discover groups of people feeling as if they are “over-managed” on a daily basis. It amazes me that after decades of discussion about the difference between managing and leading most organizations today remain over-managed and under-led.

 

Much has been written regarding the differences between managing and leading. Some people, a few of them very knowledgeable in the ways of business, will still tell you there is no difference, that it is all semantics. The number of those people shrink every year. With the Millennial generation now assuming leadership roles it will be shrinking even faster. The good news is that today more people than ever, followers and leaders alike, would say that without a doubt there is a difference and it’s huge.

 

What is the difference? Let’s begin by explaining what leadership is not. It is not about a great personality or striking charisma. While a great personality and a bit of charisma can certainly help a leader’s cause, they are not absolute requirements for a leader. Leadership is also not a replacement for management. Both leadership and management are essential for success and that is even truer in challenging business environments. Finally, leadership is not a set of intangible skills that are hard to describe. Leadership skills are every bit as tangible as those of the most successful managers.

 

In a nutshell you manage stuff and you lead people. Leadership is about people, developing people, coaching people, nurturing people, and helping common people achieve uncommon results. 

 

Managing is about coping with the current situation. Leadership is about defining the future. Good managers use processes and control systems to make certain things “run” as designed. Leaders see things as they are and ask “how can we do better?” Managers follow and encourage others to follow the plan. Leaders develop the plan and that plan closely resembles their vision of the future for the organization. 

 

Managing is about helping good people do well. Leadership is about helping good people become great. Managers “assign” tasks to achieve planned for results. Leaders “delegate” tasks to help their people grow. Managers spend time on their people to ensure the tasks are accomplished. Leaders invest time with their people to enable them to excel and surpass the requirements of the task. Managers organize their people according to the task, in the hope that they succeed. Leaders align their people according to their strengths to ensure that they succeed.

 

Here’s a quick check for you. If you have a person working for you who is struggling and you think to yourself that you’re going to have to spend time on them to “fix” them, then you have a managerial mindset when it comes to your people. If however when thinking of that same person you think to yourself, I want to invest time with that person in order to help them develop, then you have a leadership mindset about your people. 

 

Well-managed people and organizations can survive tough times. Well-led people and organizations can thrive in tough times. Good organizations have people that excel as managers and people that excel as leaders. Great organizations have people that excel as managers and leaders. While the skill set of a manager is different than the skill set of a leader many people indeed possess both. They move seamlessly between mindsets as they grow their business by growing their people. 

 

True success as a leader is only possible when we realize that what makes us a good manager will not make us a great leader. The most successful people have developed themselves in both areas. 

 

What about you?

Why You’ll Never Lead a Thing

If you’re reading this then I have news for you…. you will never lead a thing. Never!

 

Leadership requires an emotional connection between a leader and a follower. “Things” have no emotions and therefore they cannot be led. Only people can be led. In fact they must be led because as emotional beings we humans refuse to be managed. We fight back against being managed even if only subconsciously.

 

If you struggle with constant “problems” with your people it’s very likely that you are trying to manage them instead of leading them.

 

Many people in leadership positions say that the difference between leading and managing is mere semantics. They believe that they are one in the same. Authentic Leaders know better.

 

Authentic Leaders know that there is a huge difference between the mindset of a leader and the mindset of a manager. A manager’s mindset is about control. It is about being reactive. It is about maintaining the status quo, and it’s about policies and procedures. 

 

An Authentic Leader’s mindset is about vision and strategy. It is about influence and inspiration. It is about appealing to the heart and raising expectations. A leadership mindset is proactive and it is people focused. 

 

Now before you go and get all cranky on me I am not saying managing isn’t important. It is every bit as vital as leading. Asking which is more important is like asking if having air or the ability to breath is more important. It doesn’t matter because without one you don’t need the other. 

 

When you understand that there are real differences between leading and managing then you have the opportunity to actually lead. Leading requires a deep understanding of people and if you don’t understand people you’ll find it impossible to lead them. 


Adopt one of Dale Carnegie’s principles from How to Win Friends and Influence People…the one that’s says to be genuinely interested in other people. The key words there is genuinely; when you are truly interested in learning about people they will show you exactly how to lead.