What kind of leader are you? More importantly, which leadership style is going to be most effective for running a small business?
In general, there are about six leadership styles that define the ways in which leaders manage groups of people. When it comes to running a small business, not all of those might work in every situation. There are a few that prove more effective in managing people with different skill sets all working under your organization’s mission while trying to meet certain objectives.
Here are the three most effective leadership styles for small business owners. Different circumstances often call for different styles of leadership, so keep that in mind as your business grows and thrives.
1. Coaching leadership
Think of what a personal trainer does to help a client reach a fitness goal. They coach them to improve from week to week, in a way. They offer strategies and suggestions for ways a specific routine or task can be performed better, so that someone can, for example, lose 10 pounds in three months. Coaching is its own leadership style, and when it comes to improving performance, it’s the ideal style to adopt.
Coaching leadership centers on one person, a supervisor or boss, teaching and motivating a team or several individuals to improve performance and more effectively meet specific outcomes. This leadership style is results-focused, meaning a coaching leader will help those they are leading set and achieve certain goals related to performance and contributions to the company’s mission as a whole.
When it’s most effective: Use coaching leadership when the success of your business depends on the individual performance of each of your team members. This style is most effective when the process for completing a task isn’t necessarily outlined in specific steps, or outcomes are more predictable. Customer service, for example, is difficult to learn and master when clients have individually specific needs.
When it won’t work: This style won’t work in situations in which tasks do not depend heavily on unique skills. Data entry, for example, is an important component of many organizations. But coaching a team toward outcomes might actually take away from the time they could be spending meeting a certain quota.
2. Authoritative leadership
A military operation is what you might think of when you think of authoritative leadership. This style can be used in a small business setting, under specific circumstances. Under authoritative leadership, things are generally done one way, and one way only. Team members receive instructions and are expected to follow them the way they were trained to do.
Authoritative leadership puts one person, probably you in this case, in control of everything. This leadership style is completely outcomes-focused. An authoritative leader’s job is to make sure things get done a certain way and that they get done well and on time. So instead of monitoring how well an individual is performing in terms of skill and knowledge base, an authoritative leader will constantly check to make sure things are getting done on schedule, and that tasks are being completed correctly.
When it’s most effective: Authoritative leadership is most effective when there is a specific set of processes every person on your team must follow. There are standard operating procedures in place, even for circumstances when things might go wrong. There is less focus on how a task can be completed more efficiently, and a much heavier focus on keeping every team member up to pace.
When it won’t work: This style is least effective in work environments in which team members show up to apply unique skill sets to a more abstract collection of work, such as design. Assuming there is only one way to build something stifles creativity.
3. Democratic leadership
When you think of a democracy, you probably immediately think of group decision-making. In a democracy, everyone’s vote, ideally, counts. It’s the same idea with democratic leadership. A democratic leader creates a work environment in which every person contributes equally to the outcomes of a business. You might be the leader, but you depend on everyone on your team to help you overcome obstacles and meet goals.
Democratic leadership is all about collective decision-making and letting everyone voice their own opinions, ideas and concerns. This creates a team-focused environment in which one person is ultimately in charge, but everyone has a say in the decisions that are made. This encourages each individual to act as a team player, contributing his or her strengths to the cause and allowing others’ strengths to compensate for any weaknesses.
When it’s most effective: Use democratic leadership when the success of your business depends on a group of individuals joining forces to work toward a common goal. Each person is still responsible for doing his or her own job, but that individual effort helps drive the business forward as a whole. As a democratic leader, always make an effort to treat everyone’s opinions and ideas equally.
When it won’t work: This leadership style won’t work well when the decisions that need to be made affect the organization as a whole, such as deciding whether or not to abandon a particular project that isn’t generating enough revenue. Allowing those involved in the project to ‘vote’ against scrapping it doesn’t change the intended outcome.
Leadership is tough. Especially when everyone working for your business comes from different educational and career backgrounds and has different views on how things should be done. In business, everything is always shifting. Within the same business, one leadership style might work well for one particular team or project, but won’t work with another.
This is why a good leader is experienced and aware enough of rapid changes to constantly change the way he or she manages a group of people. You might be more authoritative when trying to meet an important deadline, but can take a more democratic approach when trying to update your brand’s logo or slogan.
What is most important is that you recognize the strengths and weaknesses of your team members, as well as yourself, and how everyone can work in tandem to achieve your organization’s goals.