As entrepreneurs,
we wear many hats—CEO, developer, consultant, HR, even janitor. But no hat is more important than that of “boss”. As an entrepreneur, you’re not only your own
boss, but you may also be the superior to employees in your organization. And trust us—it’s not an easy role.
Understanding
your leadership
style is one of the most important steps you can take as a leader in your
startup. By learning about what
leadership style is most effective, what type of leader you are and how you can
improve your leader qualities, you can help build a positive startup culture.
President Harry S. Truman once
said, “Men make history and not the other way around. In periods where there is
no leadership, society stands still.
Progress occurs when courageous, skillful leaders seize the opportunity
to change things for the better.”
And if developing
leadership skills is that important,
than reading this article is mission-critical.
Check out the nine different entrepreneur leadership styles and how they
can make or break a startup—which one do you fit?
1. Transformational Leadership
Transformational
leaders are those who, no matter how busy they may get, continue to inspire
teams and influence subordinates to improve and/or change. Imagine an enthusiastic, charismatic,
passionate entrepreneur—he or she is also a transformational leader. This is one of the most effective leadership
styles known today because it changes mindsets, social culture and work
efficiencies.
Famous
transformational leaders: Sam Walton (Wal-Mart), Herbert D. Kelleher (Southwest
Airlines) and Jack
Welch (General Electric)
2. Charismatic Leadership
Charismatic leaders
are known to be the driving force that inspires teams to deliver above what is
expected of them. These leaders often
use personal charm to lead and inspire and tend to be universally respected and
admired. A charismatic leader is one
that knows how to “work the room” and pays attention to the details when doing
so. Charismatic leaders are famously
known for their ability to gather a large number of followers.
Famous
charismatic leaders: Thomas Watson, Sr. (IBM), Mahatma Gandhi
3. Participative Leadership
Using
participative leadership, entrepreneurs will ask for input and advice from all
team members involved in the startup.
This type of leadership makes every team members’ opinion an important
one and employees quickly become part of the decision-making process. This kind of leadership style makes everyone
involved in the startup feel appreciate and highly motivated.
Famous
participative leader: Donald Trump (Trump Organization)
4. Laissez-faire Leadership
Do not get
participative and laissez-faire
leadership mixed up! Participative
leadership has been proven very successful, while laissez-faire, although similar
in nature, often results in startup failure.
Laissez-faire entrepreneurs are often hands-off and allow group members to
make all decisions. This leadership style
leads to the lowest productivity among group members.
Famous
laissez-faire leader: Thomas Jefferson
5. Transactional Leadership
Transactional
leadership is established by incorporating rewards and punishments in
day-to-day work-life. Using the
transactional method usually results in a very clear chain of command. Transactional leaders often believe that
people perform better with a chain of command, a rewards and punishment system
and heavy monitoring. Transactional
leadership has been found to be quite ineffective apart from situations where
problems are simple and clearly-defined.
Famous
transactional leaders: Joseph McCarthy and Charles de Gaulle
6. Autocratic Leadership
When an
entrepreneur uses autocratic
leadership, they are setting themselves up for failure. Autocratic leaders wield with absolute power
and do not listen to employees. Many
entrepreneurs feel like autocratic leadership is the best option since they
will have complete control over their idea and their business. However, this leadership style is often
resented by employees and tends to lower self-esteem and office morale.
Famous autocratic
leaders: Some would say Steve
Jobs (Apple) was an autocratic leader
7. Situational
Leadership
The situational
leadership style, much like the transformational leadership style, is one of
the most successful known today. This
type of leader adapts to situations, abilities of teams and his own
capabilities with ease. It’s all about
situational adjustment and adaptation.
Famous
situational leader: Dwight Eisenhower
8. Service-oriented Leadership (or Servant
Leadership)
Service-oriented
leaders put the needs of their employees ahead of their own at all times. They often rely strongly on subordinates’
values and ideals and involve their teams heavily in the decision-making
process. Service-oriented leaders are
often empathetic, collaborative and ethical.
Entrepreneurs with this leadership style encourage teamwork and
long-term goal making.
Famous
service-oriented leaders: S. Robson Walton (Wal-Mart), George Washington
9. Quiet Leadership
Quiet leaders
lead by example, not by telling people what to do. Quiet leaders are not known for speeches,
statements and clear-cut orders.
Instead, they do what needs to be done and inspire others to do the same.
Famous quiet
leaders: Rosa Parks and Abraham Lincoln.
Which leadership
style is best for an entrepreneur? Successful
entrepreneurs tend to be a combination of a few leadership styles including
transformational, charismatic, participative and situational. Whatever leadership style you decide to
follow, it is important to remember that not all styles will work for the same individual or organization. Do what’s best and focus on what improves
your chances of startup success!
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