Leaders rely on power based on their charisma. In business, most managers set objectives and focus on achieving their goals. Leaders lead their followers to the fulfillment of their potential. Managers manage and accomplish work through others. Leaders, however, lead and motivate people to higher levels, often giving people purpose to what they do.
Leaders inspire as well.
Managers tend to be mechanical. Managers tend to focus on goals, but leaders are always interested in trying to understand what motivates people to do things. Managers tend to follow predetermined rules and be somewhat more comfortable with bureaucracy, while leaders are more creative and spontaneous. Related to this is that, managers are more reactive and stay within organizational boundaries. Leaders push those boundaries and are likely to be more proactive.