Leadership vs. Management: Five Levels of Leadership

Too many people confuse leadership and management. While there are many similarities between what leaders and managers do, there’s also a significant difference that exists between the two as well. 

Contrary to what many people think, what makes a great leader alone does not necessarily make a great manager. In small companies especially, every employee matters. And while leadership is about getting employees to believe in your vision, managing is about how to help your employees actually achieve your business goals on a day-to-day basis to make that vision a reality. 

So even if you have been a leader in your position for some time, you might not be ready for management. Fortunately, you can evolve into a capable manager by understanding the five levels of leadership and how to ascend them over time.

Why Management and Leadership Aren’t the Same

Many people think of leadership and management as the same thing, but they aren’t.

Leadership can mean two things:

  • You lead others in a managerial style (autocratic, coaching, leader-by-example, participative, etc.)
  • You lead in your department or area of specialty. In other words, you’re an expert at what you do but aren’t particularly good at making other people do a great job in their positions

In other words, a good manager empowers others to do their best work. But a good leader might just be leader-like in an aspirational way, inspiring others to do good because of the quality of their own work.

This can be a problem if you’ve been promoted to a management position. The transition from a leader in your department or area of expertise into a true manager is difficult, in large part because there are five levels of leadership. Let’s take a look at these leadership levels and explore what makes them different.

Leadership Level 1 – Inspirational Teammate

A Level 1 leader is an informal leader who may take control of situations and offer some guidance or direction to their fellow workers. However, these leaders are mostly focused on their own performance. In some situations, they may burn out by taking too much responsibility for the outcome into their own hands.

If you have just been promoted to a managerial position, this is likely your leadership level. As an informal leader or more distant leader, you can still be a help to your team by using the shared tools needed to succeed. For example, all leaders should offer their subordinates high-quality team collaboration software that comes with crucial features like goal tracking, planning, meeting management, simple status reporting, and project management dashboards.

However, you’ll want to advance to a higher leadership level to fully integrate into your new managerial role.

  • Inspirational teammate leaders are not formally leaders, but often take on leader-like roles through their own actions

Leadership Level 2 – MVP Level

A Level 2 leader is another hands-on expert who can directly contribute to the success of their team. They will produce personal results and may even be the “MVP” of the team by doing the most work, showing up on time, and contributing the most valuable resources for a given project.

For instance, if you’re a Level 2 leader and need to create a new web copy for your organization, you might do all the writing yourself, do the editing, and even do the SEO analysis. You may even have questions like, “does SSL certificate help SEO?”, or “how can I improve meta tags?”. This is all well and good for your company, but it’s not good for making your team the best it can be. You’ll still want to advance to a higher leadership level sooner rather than later.

  • MVP-level leaders work as if they were a part of the team, and lead by example

Leadership Level 3 – Project Specialization Leader

A Level 3 leader is even more of an expert leader. While still hands-on to a limited extent, Level 3 leaders focus more on shaping their project and leading from the front, often by example.

One example of a Level 3 leader is a chief compliance officer, whose primary responsibilities involve making sure that others in the organization comply with mandated guidelines for security, maintenance, or even timekeeping.

This leadership level is sufficient for many managers. But you can do better. As a level 3 leader, you’ll still do a lot of work yourself. Furthermore, as you advance into a more “big picture” managerial position, you won’t be able to be a Level 3 leader all the time purely because you’ll have too many people to organize.

  • Project specialization leaders adhere to strict guidelines and compliance rules to ensure that the company is kept in line

Leadership Level 4 – People Management Expert

A Level 4 leader is the first real kind of employee manager you can evolve into. As engaging and enabling leaders, Level 4 leaders focus less on their own contributions when considering the results of a project or task.

Instead, they emphasize:

  • Team building, including hiring or finding the right people for open spots in a given team
  • Team engagement, which helps your team members do their best work possible
  • Team management, especially when it comes to managing employee expectations
  • Setting the team up for success, even if they work in fields that you may not have direct experience in

As you can imagine, a Level 4 leader is great for ensuring long-term, high-quality results for complex projects. This leader may not be an expert in all the projects they play a role in. But because they focus more on people and team building, the experts they put in the place will still produce exceptional outcomes.

  • People management experts possess excellent people skills, are usually extroverts (or extroverted introverts), and enjoy working with other people. They thrive in team-based settings.

Leadership Level 5 – Aspirational Leader

Improving your leadership skills until you’re at leadership level 4 is excellent in many cases. In some management positions, it may even be good enough. But you can also become a Level 5 leader, the cream of the crop and the best of the best: an aspirational leader.

At the highest level of leadership, you’ll become a true manager in the big picture scale of things. Such leaders include CEOs, CFOs, and other top-level executives that:

It’s a lot of responsibility, and you may not need to become a Level 5 leader until you ascend to the highest levels of executive management. But even as a middle manager, you can practice a Level 5 leadership style and be even more inspirational to your people.

  • The CEO leader takes on the greatest amount of responsibility and oversees or directs operations as a whole.

Transitioning from Leader to Manager – Ascending the Leadership Levels

The most difficult transition is from a Level 3 or expert leader into a Level 4 or engaging leader by far. But no matter which rung of the leadership ladder you need to climb, you can ascend by:

  • Consciously putting your desire for control away and realize that you need to focus on building influence and relationships
  • Developing people skills so you can empower and engage people working beneath and with you
  • Focusing less on the big picture or day-to-day stuff and more on the big picture elements of your career

Above all else, transitioning from an area leader into a true team manager requires you to refocus. Once you are promoted into a management position, your contribution is not about what you directly put into the company or the products you make. As you realize this, you’ll make fewer big leadership mistakes, which are unfortunately common to many new managers.

It’s about inspiring others to do that difficult work with their best effort. There’s a bright side to this; in becoming a capable manager, you’ll have an even bigger effect on the success of your organization than you ever could as an expert leader.


At the end of the day, the path from leader to manager will take some time and a lot of conscious effort. But you’ll make it sooner or later, and the earlier you fully adapt to your management position, the better you can engage with your employees and improve team performance across the board.

Written by: Shanice Jones