The currency of leadership is respect. The currency of management is output. Sometimes people conflate the two, and refer to senior managers as “senior leadership” or to managers as “leads” but there is a big difference. Lots of things that result in output are not respectable. Lots of respectable things result in lower output. The difference therefore is material to how people decide to act, how they perceive themselves and how they are perceived. A great leader receives near universal respect, even if people may not necessarily like them. A great manager has consistent output, but respect is usually not as important. Both are necessary.
The irony of leading a company or managing people is that the people who are drawn to leading tend not to be good leaders. Being an extrovert that likes to control people (management / output oriented) can be a disaster if that person has to be respectable to be effective. Likewise, lots of people that history would consider great leaders did not seek out formal power. It seems like that simply added to the depth of the respect that people feel towards them. The best kind of leader is a reluctant one, and the best kind of manager is a leader. This is because the easiest way to get people to defer to you is intrinsic respect, as opposed to social dominance.
When people look around inside of an institution, usually they feel that what is lacking is management. The actual thing lacking in most cases is leadership. Plenty of people are willing to take responsibility for other people, control them and pursue an outcome. Far less people are willing to say no to success if that success would compromise their principles. Pursuing outcomes without antimetrics is not a principle and not sustainable. Most managers are actually too rational and do not leave enough room to do the right thing. It makes way more sense, if you want to have sustainable success, to do the right thing than it does to get the current outcome.
So the problem becomes deciding how to design a people system to ensure that managers have respect. One way to do this is to put the person who is best at a particular role in charge of that role. The problem with this is that once in power, people are reluctant to accept that someone else has superior abilities. Usually what happens is the person in power shifts to being more of a generalist, which the members of their team do the opposite to protect themselves and find something they can be the best at. This reinforces the existing power structure, and usually leads to a team that does not end up with the best overall person in charge.
One way to incentivize people to do the right thing instead of focusing exclusively on an outcome would be to fire people for doing the wrong thing but not for missing targets. This is an unpopular opinion, because people are far more tolerant of bad values in many cases than they are of uncertainty. The reality though is that most targets are arbitrary, and implemented by managers who exert more control than their respect reasonably allows them to. To have a lot of output without having a lot of respect becomes increasingly difficult. A good leader is able to get people to do great work in spite of not being liked. A bad manager can’t afford that luxury.
It seems like if your goal is to get people to do what you want to further some outcome, you are actually better off forgetting about mechanisms of influence and control and focusing on what will build respect. Because people are happy (sort of) to work somewhere that is growing and creating opportunities while working for someone who they don’t respect. As soon as something goes wrong though, which it will, people tend not to stand by people unless they respect them. If you respect someone enough, it typically allows you to transcend the power dynamic entirely and allow you to focus on the task at hand. When things go wrong, bad managers (therefore, bad leaders) will simply exert more control over their people. This leads to burnout, not outcomes, so it only works on the way up.
The interesting thing about this assertion that the currency of leadership is respect is that there are many different ways to get people to respect you. Usually it involves choosing the right but hard thing over the easy but wrong thing. No one respects you for choosing the easy right thing, or for avoiding the hard wrong thing. Hard decisions, and therefore all decisions, are a choice between the easy but wrong thing and the hard but right thing. So respect can come from making decisions along those lines, being better in a domain that your team values, or some other approach. This is helpful to understand, but there is another important factor.
Another significant force that acts on any hierarchical relationship is paternalism. If someone feels that by working with you, they will be learning something that is selfishly beneficial to them, they will be a lot more willing to do what you want. This kind of paternalism appears in all kinds of relationships, but the key is basically that one party sees the opportunity to mentor someone with similar potential, and the other party sees the opportunity to work with someone temperamentally similar but who has already worked through hard problems.
So if your goal is to be a good manager, stop controlling. The goal should be to build respect. Respect is the currency of leaders, and leaders are the best kind of managers. The nice thing about respect as a currency for leadership is that there are few shortcuts. One shortcut would be to find people who are willing to be controlled without forming a respectful relationship. I suspect that these people are also the most willing to follow someone who is more confident than they are competent. So we should seek to gain respect from people who give little of it, as opposed to those who give too much. It seems like people know who is likely to give too much and too little respect, and they tend to mimic those who give less.
The last point on respect as a currency is that this usually seems to be the problem with children of successful people. There is something existential about the concept of getting respect from people. The reason that children of successful people tend to act in a strange way usually seems to be based on desperate attempts to get the same level of respect that their successful parent does. The thing is, people know whether you paid for the house and the car or not, and it only feels right when you paid for it yourself. So leadership cannot run in families, or if it does it does only to the extent that being respectable can run in a family. It is not something that can be passed on each generation like money or social power.
It seems pretty clear that being respectable is much harder than getting output. And that if people actually cared about sustainable output, they would focus on being respectable and doing respectable things. This does not necessarily mean virtue signaling, as people are becoming more aware of how people who behave badly to make their money have a tendency to want to donate it more publicly. Real respect has nothing to do with how much money you can accumulate, because that is an outcome. Real respect has everything to do with whether you value sustainable output or zero sum output. It always comes back to doing the right thing.