As an entrepreneur, you wear many hats. You’re responsible for the vision and strategy of your company, and you need to be able to inspire and motivate your team to make that vision a reality.
You also need to be able to make decisions under pressure, communicate effectively, and manage change. In other words, you need to be a good leader.
Leadership is a critical skill for any entrepreneur. If you’re not a natural leader, don’t worry – there are plenty of resources out there to help you develop your leadership skills. But why is leadership so important for entrepreneurs? Let’s take a look.
Vision and Strategy
As an entrepreneur, you can’t just sit back and let things happen – you need to be proactive and have a clear vision for your company.
That vision needs to be communicated to your team so that they can work towards it. And as your company grows, your vision will need to evolve too. That’s where good leadership comes in.
Inspire and Motivate Your Team
A good leader knows how to inspire and motivate their team. They understand what makes their team tick and what drives them to achieve their best work.
They also know how to give feedback – both positive and constructive – so that their team can continue to improve.
Make Decisions Under Pressure
As an entrepreneur, you’ll often find yourself in situations where you need to make quick decisions under pressure.
That’s why it’s so important to have good decision-making skills. A good leader is able to weigh up all the options and make a decision based on what’s best for the company – even if it means making tough choices.
Communicate Effectively
Communication is key in any business – but it’s especially important for entrepreneurs.
You need to be able to clearly communicate your vision for the company, as well as give instructions and feedback to your team.
If you can’t communicate effectively, it’ll be very difficult for your team to understand what you want them to do – and even harder for them to do it well.
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Ability to Manage Change
Change is inevitable in any business – but it can be especially challenging for small businesses.
As an entrepreneur, you need to be able accept that change is going to happen, and adapt your business accordingly.
That might mean changing your product offering, adopting new technologies, or even pivoting your entire business model. Whatever the change might be, a good leader is always prepared for it.
Leadership VS Management
Leaders set the vision and direction for an organisation, while managers are responsible for implementing that vision and ensuring that day-to-day operations run smoothly. You may well both hats when you’re running your business.
Leaders inspire and motivate employees to achieve organisational goals, while managers use a more hands-on approach to get work done and meet deadlines and leaders are often visionary and think outside the box, while managers are more practical and focused on the here and now.
The two skill sets don’t exist in parallel universes – you can be the leader and manager at the same time. It’s just helpful to know the differences.
Leadership Styles
Let’s take a closer look at some of the different leadership styles out there. See which you think would work best for you.
It might be that you see yourself in more than one of these leadership models.
1. Directive Leadership
Directive leadership is a style of leadership that involves setting clear goals and expectations for employees and then providing them with the resources and support they need to achieve those goals.
This type of leadership is often used in situations where there is a need for quick results or when employees are not familiar with the task at hand.
Benefits of Directive Leadership
There are several benefits of directive leadership, including the following:
- It can provide employees with clear direction and purpose.
- It can help to motivate employees by setting achievable goals.
- It can improve communication between managers and employees.
- It can help to build trust between managers and employees.
History of Directive Leadership
It can be traced back to the early days of Ancient Greece!
The first recorded instance of a directive leader was in the form of a military general named Cyrus the Great.
He was known for his ability to lead his troops into battle and achieve victory. Cyrus was able to do this by giving clear and concise orders, and ensuring that his troops were well-trained and motivated.
2. The Supportive Leader
The supportive leader is a type of leader who puts the needs of their team above their own.
They are not afraid to get their hands dirty and do whatever it takes to help their team succeed.
This type of leader has been around for centuries, but they have been thrust into the spotlight in recent years as more and more companies adopt flat organisational structures.
We’ll look at the history of the supportive leader, some well-known examples, and how you can apply this leadership style in your small business.
The history of the supportive leader
The concept of the supportive leader dates back to ancient Greece, where it was believed that leaders should serve their people.
This belief was later codified by Confucius, who said that “leaders should be chosen for their ability and character, not for their position.”
The idea of the supportive leader gained popularity in the West during the Industrial Revolution, when workers were often treated poorly by their employers.
In response to this, some business leaders began to adopt a more compassionate leadership style.
Examples of Supportive Leaders
One of the most famous examples of a supportive leader is Mahatma Gandhi. Gandhi was an Indian political leader who fought for India’s independence from Britain.
He is best known for his philosophy of nonviolent resistance, which he used to great effect during the Indian independence movement.
Another well-known example of a supportive leader is Nelson Mandela. Mandela was a South African political leader who fought against apartheid.
Supportive Leadership in Small Business
If you want to be a supportive leader in your small business, there are a few things you can do.
First, make sure that your employees feel valued and appreciated. Show them that you care about them as people, not just as workers.
Second, create an open and inclusive environment where everyone feels like they can contribute ideas and be heard.
Finally, lead by example and always be willing to lend a helping hand when needed. By following these tips, you can create a positive and productive work environment that will help your small business thrive.
The supportive leader - Final Thoughts
This type of leader puts the needs of their team above their own.
They are not afraid to get their hands dirty and do whatever it takes to help their team succeed.
If you want to be a supportive leader in your small business, make sure your employees feel valued, create an open and inclusive environment where everyone feels like they can contribute ideas, and lead by example.
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3. The Democratic Leader
In a business setting, democratic leadership can be an effective way to get all team members involved in the decision-making process.
Democratic leaders encourage their team members to share their ideas openly and honestly.
This allows for a free exchange of ideas and helps the leader make better decisions by taking into account the perspectives of others.
Rather than making decisions unilaterally, democratic leaders rely on the input of their team members to reach consensus.
This ensures that all team members feel like they have a say in the decision-making process.
Democratic leaders encourage their team members to participate actively in discussions and decision-making processes.
This helps ensure that all voices are heard and that everyone has a chance to contribute to the discussion.
4. The Autocratic Leader
An autocratic leader is one who rules with an iron fist. This type of leader is often seen as dictatorial, and for good reason.
They tend to make decisions without consulting others, and they often have a “my way or the highway” attitude.
What Are the Benefits of an Autocratic Leadership Style?
There are some advantages to being an autocratic leader.
One benefit is that autocratic leaders tend to be very decisive.
They don’t debate every little decision; they just make a choice and go with it.
This can be helpful in situations where time is of the essence, or when there isn’t enough information to make a fully informed decision.
Another benefit of being an autocratic leader is that it can help instil a sense of discipline in those who follow you.
If you’re used to making all the decisions yourself, you’re probably not going to tolerate much backtalk or disobedience from your employees!
Autocratic Leadership Style - Criticisms
One criticism is that autocratic leaders often make decisions without considering input from others. This can lead to poor decision-making, as well as resentment from employees who feel like their voices are never heard.
Additionally, autocratic leaders can often be inflexible, which can lead to problems when things don’t go according to plan.
Because autocratic leaders tend to have such a “hands-off” approach, they can often be out of touch with what’s actually going on in their business. This can lead to some serious blind spots!
How Can Small Business Owners Use an Autocratic Leadership Style Effectively?
It’s important to only use this style when it’s necessary.
If you’re constantly making decisions without considering input from others, your employees are going to get frustrated—and rightfully so!
You might be the one in charge, but that doesn’t mean you shouldn’t be open to feedback from your employees.
They’re the ones who may actually be doing the work!
Finally, remember that just because you’re the boss doesn’t mean you know everything; if you’re not careful, your ego could get in the way of making smart decisions for your business.
Famous Examples of Autocratic Leaders
Some famous examples of autocratic leaders include Adolf Hitler, Joseph Stalin, and Saddam Hussein.
5. Laissez-Faire Leader
Laissez-faire leadership is a style of leadership where the leader takes a hands-off approach and allows the team to get on with the work.
This style of leadership can be beneficial in certain situations, but it also has its criticisms.
So how you can use laissez-faire leadership in your small business?
What is Laissez-Faire Leadership?
The leader provides guidance and support when needed but they are generally not involved in the day-to-day running of the team.
There are some benefits to using laissez-faire leadership in your small business. These benefits include:
- Allowing employees to feel empowered and motivated as they have more responsibility and autonomy
- Developing employees’ skills as they are given the opportunity to problem solve and take initiative
- Freeing up the leader’s time as they are not bogged down with day-to-day tasks
Criticisms of Laissez-Faire Leadership
Small business owners should be aware of some of the criticisms, which include:
- A lack of direction from the leader can lead to confusion and frustration amongst employees
- Problems may not be dealt with in a timely manner as the leader is not directly involved
- Employees may take advantage of the situation and become lazy or unproductive
Using Laissez-Faire Leadership in Small Business
If you decide that laissez-faire leadership is right for your small business, there are some things you need to do to make sure it is successful. These things include:
- Providing clear guidelines – Employees need to know what is expected of them so that they can be successful.
- Checking in regularly – Even though you are taking a hands-off approach, you still need to check in with your team regularly to ensure that everything is running smoothly.
- Being available when needed – You need to be available to answer questions or provide support when needed. Your team should not feel like they are left completely alone.
6. Servant Leadership
The Servant Leadership style is a popular leadership style that is often used in small businesses.
In this style of leadership, the leader focuses on the needs of the team and works to help them grow and develop.
This type of leadership can be beneficial for small businesses as it can help to create a more cohesive and motivated team.
However, there are some criticisms of this style of leadership, which will be discussed later in this blog post.
What is Servant Leadership?
Servant Leadership is a style of leadership that was first coined by Robert K. Greenleaf in 1970.
In this type of leadership, the leader focuses on the needs of the team and works to help them grow and develop. This includes supporting team members in their personal development, as well as helping them to achieve their goals.
One of the key aspects of Servant Leadership is that it promotes collaboration within the team.
This is because the leader works with the team to identify their goals and then develop a plan to achieve these goals. This type of leadership can be beneficial for small businesses as it can help to create a more cohesive and motivated team.
What is Servant Leadership?
One of the criticisms of Servant Leadership is that it can lead to the leader being taken advantage of by their team.
This is because the leader is focused on meeting the needs of their team, which can mean that they are not able to focus on their own needs.
Additionally, some people argue that this style of leadership can lead to a lack of direction, as the leader may not have a clear vision for the future of the business.
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7. The Transactional Leadership Model
The transactional leadership model is a style of leadership that focuses on achieving results by exchanging rewards for performance.
This type of leader sets clear goals and expectations, and provides employees with the resources they need to achieve those goals.
In return, employees are expected to meet or exceed those expectations. If they do so, they will be rewarded; if they don’t, they will be punished.
It can be an effective way to motivate employees and get results.
Some people argue that this type of leader is more concerned with results than with people, and that this can lead to a hostile or competitive workplace environment.
How to Practise Transactional Leadership in Small Business
If you’ve decided that the transactional leadership model is right for your small business, there are a few things you can do to ensure that you’re using it effectively.
It’s important to set clear goals and expectations for your employees.
They should know exactly what is expected of them and what they need to do to earn rewards.
You need to provide employees with the resources they need to achieve those goals; if they don’t have what they need, they won’t be able to succeed.
And you need to be consistent in both your rewards and punishments; if you’re not consistent, employees will quickly lose motivation.
8. Transformational Leadership
Transformational leadership is a style of leadership where the leader works with their team to identify and implement changes that will improve the team’s performance.
It can help entrepreneurs to quickly adapt to changes in their industry and keep their team motivated.
There are many benefits to using this style of leadership, including the ability to motivate employees, encourage creativity, and promote innovation.
However, leaders risk becoming too autocratic or overbearing if they’re not careful with this approach.
How Transformational Leadership Can Be Used in Small Businesses
Transformational leaders often have a clear vision for their business and they work closely with their team to achieve this vision.
This type of leader is typically very passionate about their business and they are always looking for ways to improve their products or services.
In addition, transformational leaders are often very good at motivating employees and encouraging them to be creative and innovative.
Transformational Leadership - Criticisms
One criticism is that because transformational leaders typically have very high standards, they may sometimes come across as overbearing or autocratic.
In addition, because transformational leaders typically expect a lot from their employees, they may sometimes find it difficult to delegate tasks or give criticism constructively.
9. The Authentic Leadership Style
The Authentic Leadership Style is gaining in popularity due to its focus on building trust, developing relationships, and creating a positive work environment.
But what exactly is The Authentic Leadership Style? And how can startup founders use it to benefit their businesses?
What is The Authentic Leadership Style?
The Authentic Leadership Style was first described by Bill George in his book, “True North: Discover Your Authentic Leadership.” It is based on the idea that leaders must be true to themselves in order to be effective.
This means being honest about your strengths and weaknesses, having a clear sense of purpose, and living up to your values. Leaders who adopt The Authentic Leadership Style build trust by being transparent and authentic with their employees.
They also focus on developing relationships instead of simply issuing orders. This creates a positive work environment where employees feel valued and motivated to do their best work.
Benefits & Criticisms of The Authentic Leadership Style
The main benefits of The Authentic Leadership Style are that it builds trust, develops relationships, and creates a positive work environment.
Some critics argue that The Authentic Leadership Style can be too soft and may not be suited for all businesses. Others argue that it takes too much time and effort to implement effectively.
Applying The Authentic Leadership Style in your business
Be honest about your own strengths and weaknesses.
Have a clear sense of purpose and live up to your values.
Focus on developing relationships with your employees instead of simply issuing orders.
If you can do these things, you will create a positive work environment where employees feel valued and motivated to do their best work.
10. Charismatic Leadership
Charismatic leadership is a type of leadership style that is characterised by a strong vision and the ability to inspire and motivate others to achieve that vision.
A charismatic leader is typically someone who is able to articulate their ideas in a way that is both convincing and inspiring, and who has the presence and charisma to rally others around them.
There are many benefits to being a charismatic leader, including the ability to motivate and inspire others, the ability to influence people, and the ability to get things done.
However, there are also some criticisms of charismatic leadership, including the potential for abusing power, the potential for creating a cult of personality, and the potential for alienating others.
Charismatic Leadership in Your Small Business
As a small business owner, you may be wondering how you can apply charismatic leadership in your own business.
Setting a clear and inspiring vision for your business, demonstrating your passion for your business, and being authentic and transparent with your employees will have you well on your way.
When you are able to articulate your vision in a way that is both convincing and inspiring, you will be able to rally others around you to achieve that vision. This can be an incredibly powerful tool in achieving success for your small business.
In addition, because people are naturally drawn to charisma, you will find that it is easier to influence people when you are a charismatic leader.
This can be helpful in getting people on board with your ideas or persuading them to take action. Charismatic leaders tend to be very driven and motivated individuals who are able to get things done.
What Are The Criticisms Of Charismatic Leadership?
Criticisms include the potential for abusing power, or creating a cult of personality, and the potential for alienating others.
One of the dangers of being a charismatic leader is that you may be tempted to abuse your power.
People may be more likely to follow a charismatic leader’s order without question or dissent.
This can lead to problems if you abuse your power or make decisions that are not in the best interests of your employees or customers.
It is important to be aware of these potential pitfalls so that you can avoid them if you choose to use charismatic leadership in your small business.
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How to identify your own leadership style
In order to be an effective leader, it is helpful to be aware of your own personal leadership style.
This includes understanding your values and beliefs, what motivates and energises you, as well as what your goals are.
It is useful to know who you admire and why, in order to learn from their example.
Finally, understanding your personal brand will allow you to be authentic in your leadership role.
Your Values and Beliefs
The first step in identifying your leadership style is to understand your own values and beliefs. What do you stand for? What do you believe in? When you know the answers to these questions, it will be easier for you to make decisions that align with your personal values.
Additionally, people will be drawn to you as a leader if they share your values and beliefs.
What Are Your Goals?
Another important aspect of knowing your leadership style is understanding what your goals are. What do you hope to achieve? What is your vision for the future? When you have a clear understanding of your goals, it will be easier for you to develop a plan of action and inspire others to follow suit.
What Energises and Motivates You?
What motivates you as a leader? What makes you excited about the future? What drives you to achieve your goals?
When you know what motivates you, it will be easier for you to stay focused on the task at hand and maintain a positive attitude even when things get tough.
Others will be drawn to your infectious enthusiasm and clarity of thought.
Who Do You Admire and Why?
One way to learn more about effective leadership is to study those who have inspired you in the past.
Who do you admire and why? What qualities do they possess that have made them successful?
When you take the time to study those who have come before you, it will be easier for you to develop your own unique leadership style.
How Do You Make Decisions?
Last but not least, another key element of knowing your leadership style is understanding how you make decisions.
Do you like being in charge or do you prefer delegating tasks?
Are you decisive or do you like taking input from others before making a decision?
Knowing how you operate will help you become a more effective leader.
Myers-Briggs
If you want something a little more statistically driven, then soul searching, you can use personality questionnaires.
A popular one is The Myers-Briggs Type Indicator (MBTI), which is a personality tool that measures preferences in four areas:
- Extroversion or Introversion
- Sensing or Intuition
- Thinking or Feeling
- Judging or Perceiving
Your type is determined by your score in each area, with a high score in one area indicating a preference and a low score indicating the opposite. There are 16 possible types, and each type is represented by a four-letter code.
There is no right or wrong type; each has its own strengths and weaknesses.
However, knowing your type can help you understand yourself better and work on your weaker areas. For example, if you’re an extrovert, you may need to learn how to recharge by yourself sometimes, while if you’re an introvert, you may need to learn how to put yourself out there more.
Leadership Styles - Wrap Up
And there you have it. You’re now spoilt for choice about how you lead your people as you build your empire.
Whether you like laying down the law, consulting the team, putting things to a vote or some combination of all of the above, you now have the full suite of leadership styles and models at your fingertips.
In truth, the best leaders don’t have just one leadership style. They adapt their style based on the team they are leading, the individuals in it and the phase that the team and organisation are at.
You’ll become a better leader the longer you are responsible for leading others. With what you’ve learnt in our guide, you’ve now got plenty of options to grow as a leader!