Choosing the Best Leadership Style for Your Small Business

Choosing the Best Leadership Style for Your Small Business

Are you a good boss? Ooof…harsh question, we know! With over 75% of all workers reporting their boss as the worst part of their jobs, though, it’s one you’ve got to consider.   

With less than a quarter of employees currently satisfied with their bosses, it’s high time to self-evaluate your individual performance, communication style, and company culture.  

In this piece, we’re digging into some of the most effective (and ineffective!) leadership styles for small business owners — which of these styles are you naturally gravitating toward…and which can you learn from?  

1. Authoritative  

Authoritative leaders exercise absolute control in the workplace. For any and all decisions, it’s their way or the highway! This style of leadership can be beneficial if you need to save time when making decisions. With all instructions dictated by one person, there’s little risk of employees being unclear on their tasks.  

In crisis situations (and careers like the military or fire department), it’s vital to know who’s in charge; there’s simply no time for discussing solutions with the whole team. This is where authoritative leadership can be necessary and life-saving.   

However, if you’re a small business owner, you likely aren’t rescuing anyone from a burning building. If you rely on this leadership style in a traditional workplace, you’ll undermine the creativity of your employees and unwittingly set them on the fast track to mutiny.    

2. Coaching  

According to Gartner research, fewer than half of all employees believe that their organization sees them as people, not workers. The coaching style of leadership addresses this gap, providing employees with valuable one-on-one time to assess their needs and goals as individuals within the company.   

It’s smart to organize some sort of career development program for your employees’ continued growth and learning — no matter how new your business. Each new team member deserves individualized career coaching, guidance, and feedback. And 93% of workers say they would remain at a company longer if it invested in their career!  

Coaching leadership is as time-intensive as it is effective, and for many bosses it’s simply not feasible to implement. Delegating these tasks through a mentorship program may be useful to provide necessary enrichment for your employees without falling behind on your commitments as a leader.  

3. Laissez-Faire  

Ah, laissez-faire leadership. French for “leave us alone,” this strategy was infamously used by President Hoover to build the economy during the Great Depression. He believed that economic growth would grow uninhibited without government interference, and ended up with a $6 billion addition to the deficit with negligible improvement to the economy.   

If you apply this as a leadership style, you may not end up with $6 billion dollars of debt on your hands…but you will likely end up with a big ol’ mess of a workplace. Laissez-faire leaders tend to delegate tasks with no guidance or supervision, leading to confusion, errors, and lots of blame games.   

We tend to advise against this style of leadership, unless you have a team of highly specialized and skilled employees. If you’ve no experience with a specialty, there’s no reason for you to be guiding the expert! In those instances, it’s better to step back and provide support when deemed necessary by team members.   

Our favorite: Servant Leadership   

Could this style of leadership be the next big thing? Not really. It’s been around for ages, and was first coined by Robert Greenleaf in his 1970 essay, “The Servant as Leader.” In this essay, he contrasts this style of leadership with traditional leaders who focus on the accumulation of wealth and power at the top.  

The Robert K. Greenleaf Center for Servant Leadership (an excellent resource) defines the servant leader as a person who “shares power, puts the needs of others first, and helps people develop and perform as highly as possible.”   

Larry Spears, the foremost expert on this leadership style, has simplified Greenleaf’s writings into nine principles for aspiring servant leaders to follow. We’ll briefly go into these principles, but for a deeper dive you can visit the Spears Center. A contributing author to 34 books on servant leadership, you won’t run out of resources!  

  • Empathy: Take the time to understand each team member’s strengths and weaknesses. You’ll know when to give more support, and when to step back and let them lead.   
  • Stewardship: Build trust by being the first to own up when you’ve made a mistake, and never delegate a task that you wouldn’t take on yourself.  
  • Foresight: Care for your team by anticipating future challenges. This can be especially helpful with a financial expert! An accountant will look at the big picture of your finances and point out potential issues or opportunities for future growth. (Check out our recent blog post on finding the perfect accountant!)  
  • Persuasion: This one may sound a little misleading…we promise it’s not about icky con-man tactics! Persuasion is key to inspiring employees to take pride in their performance. Focus on talent development and allow your employees to have autonomy over their tasks.  
  • Conceptualization: When bringing your idea to life, a solid mission statement will allow employees to properly prioritize tasks to best serve your business’s primary goals.  
  • Awareness: Listen to your employees! They’ll feel valued and seen, and you’ll be made aware of any potential issues that need fixing.   
  • Healing: It’s your job to show employees that respect can (and should!) be found in the workplace. Empower your team to set firm boundaries and protect their time. Don’t be that company that glorifies unhealthy work practices!  
  • Commitment to growth: Prepare your team members to grow and step into leadership roles! Consider allocating funds to allow your teams to attend conferences for training opportunities.  
  • Building community: Build trust and fellowship by adding some fun to your schedule. A little movie night can go a long way when it comes to improving communication among teammates.   

We’re all about servant leadership, but there are countless styles that can contribute to a healthy and positive workplace. While you’re experimenting with those styles, don’t fall behind on your books! Contact KYN today for a team of trustworthy financial experts to keep your finances as healthy as your workplace.


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