I always interpreted that line as meaning Sonny wanted Michael to stop pretending that he was some wimp. Remember that Michael was a Captain in the Marines and fought in the Pacific, so he already had good leadership and combat skills. I think Sonny might have wanted him to be underboss or something, handle the men and logistics (things he would have already done in the Marines) and deal with the Corleone's enemies. Instead he acted like this kind of reluctant guy who was tired of war and wanted to be a math professor, and not a war hero.