ABSTRACT
Leadership and management are two distinctive and complementary systems of action. Both are necessary for success in an increasingly complex and volatile business environment. Management is about coping with complexity. Leadership, by contrast, is about coping with change. Companies manage complexity first by planning and budgeting. Management develops the capacity to achieve its plan by organizing and staffing. Management ensures plan accomplishment by controlling and problem solving. Since the function of leadership is to produce change, setting the direction of that change is fundamental to leadership. When Lou Gerstner became president of the Travel Related Services (TRS) arm at American Express in 1979, the unit was facing one of its biggest challenges in AmEx's 130-year history. Gerstner established something called the Great Performers program to recognize and reward truly exceptional customer service, a central tenet in the organization's vision. These initiatives led quickly to new markets, products, and services.
