Leadership styles for small business and early stage startups

As a small business owner or early stage startup founder, you are the leader of your company. Your leadership style can have a significant impact on the success of your business. In this article, we will dig into different leadership 5 different leadership styles.

Why is your leadership leadership important when you have a small company?

Effective leadership is crucial for the success of any business, but it is especially important for small companies. As a leader, you set the tone for your company and influence the culture, values, and direction of your business. Your leadership style can also impact employee morale, productivity, and retention.

You may have a small team or be working closely with a few employees. This means that your leadership style can have a direct and immediate impact on your team. By understanding different leadership styles, you can choose the one that best fits your business and helps you achieve your goals.

Autocratic Leadership

by Library of Congress (https://unsplash.com/@libraryofcongress)

Autocratic leadership is a style where the leader makes all the decisions and has complete control over the team. This style is often associated with a strict and authoritative leader who expects their team to follow their instructions without question.

This leadership style can be effective in certain situations, such as during a crisis or when quick decisions need to be made. However, it can also lead to a lack of creativity and innovation within the team. Employees may feel demotivated and disengaged if they do not have a say in the decision-making process.

Autocratic leadership may work well for small businesses or early stage startups that require a strong and decisive leader to guide the company through its initial stages. However, it is important to balance this style with open communication and involving employees in decision-making when appropriate.

Democratic Leadership

by Marissa Grootes (https://unsplash.com/@stilclassis)

Democratic leadership, also known as participative leadership, involves the leader consulting with their team and involving them in the decision-making process. This style encourages open communication and collaboration, and employees are given a sense of ownership and responsibility for their work.

This leadership style can help because it allows for a diverse range of ideas and perspectives to be considered. It also fosters a positive and inclusive work culture, which can lead to higher employee satisfaction and retention.

However, democratic leadership can also lead to slower decision-making and may not be suitable for situations where you need to move fast. It is important for the leader to strike a balance between involving their team and making timely decisions.

Transformational Leadership

by Andrew Neel (https://unsplash.com/@andrewtneel)

Transformational leadership is a style where the leader inspires and motivates their team to achieve a common goal. This type of leader is often charismatic and has a clear vision for the company. They are able to communicate their vision effectively and inspire their team to work towards it.

This leadership style can work well if you want to create a strong sense of purpose and direction within the team. It can also lead to increased employee engagement and productivity.

However, transformational leaders may also have high expectations and may push their team to their limits. It is important for the leader to provide support and resources to help their team achieve their goals without burning out.

Servant Leadership

by Damian Zaleski (https://unsplash.com/@zal3wa)

Servant leadership is a style where the leader prioritizes the needs and well-being of their team above their own. This type of leader focuses on serving their team and helping them grow and develop.

This leadership style is particularly useful because it creates a positive and supportive work environment. Employees feel valued and supported, which can lead to higher job satisfaction and retention.

However, servant leaders may struggle with making tough decisions and may not be able to provide the direction and guidance that a small business or early stage startup needs. It is important for the leader to balance their focus on their team with the needs of the business.

Situational Leadership

Situational leadership is a methodology where you adjust your leadership style based on the skill level of your team member.

This style allows you to meet your team where they're at. For example, a senior exec needs a different style than an intern. Learning to shift gears will help you attune to different teams.

The downside to this style is that it requires a lot of context switching and you may find it difficult to shift gears throughout the day as you work with different people.

For more info on how to execute this, I highly recommend checking out The Centre for Leadership Studies.

How to choose the right leadership style?

by Kelly Sikkema (https://unsplash.com/@kellysikkema)

There is no one-size-fits-all approach to leadership, and the best leadership style for your business will depend on a bunch of factors, including your company culture, goals, and team dynamics. Here are some tips to help you choose the right leadership style for your small business or early stage startup:

Understand your company culture and values

Your leadership style should align with your company culture and values. If your company values collaboration and open communication, a democratic or transformational leadership style may be more suitable. If your company values efficiency and quick decision-making, an autocratic leadership style may be more effective.

Consider your team dynamics

Your team dynamics can also influence your leadership style. If you have a small team of highly skilled and motivated individuals, a democratic or transformational leadership style may be more effective. If you have a larger team with varying levels of experience, an autocratic or servant leadership style may be more suitable.

Be adaptable

As your business grows and evolves, your leadership style may need to adapt as well. Be open to trying different styles and adjusting your approach as needed. What works for your business now may not work in the future, and it is important to be flexible and willing to change.

Leadership best practices

Regardless of your chosen leadership style, there are some key practices that can help you be an effective leader for your small business or early stage startup:

Communicate openly and frequently

Effective communication is crucial for any leader, but it is especially important for small businesses and early stage startups. Keep your team informed about company updates, goals, and expectations. Encourage open communication and listen to your team's ideas and concerns.

Lead by example

As a leader, your actions and behaviors set the tone for your team. Lead by example and demonstrate the values and behaviors you want to see in your team. This will help create a positive and productive work culture.

Provide opportunities for growth and development

Invest in your team's growth and development by providing training and opportunities for them to learn new skills. This will not only benefit your employees but also your business as they become more skilled and knowledgeable.

Be transparent and honest

Transparency and honesty are key for building trust with your team. Be open and honest about company updates, challenges, and successes. This will help create a sense of transparency and trust within your team.

Conclusion

Your leadership style can have a significant impact on the success of your business. By understanding different leadership styles and choosing the one that best fits your company, you can create a positive and productive work environment and help your business achieve its goals. Remember to be adaptable and open to change as your business grows and evolves. With effective leadership practices, you can lead your small business or early stage startup to success.