A variety of leadership techniques can be effective in a small business setting. The best leadership style for your small business will depend on the specific situation and the personalities of those involved (i.e., the stakeholders).
We will discuss some of the most common leadership styles and when each is best used. Ultimately, we want your business to have the best possible chance for success, so it’s essential to choose the leadership style that will work best in your particular situation.
The different types of leadership styles.
There are quite a few different leadership styles that can be effective for a small business. The best leadership style for your business will likely depend on several factors, such as the size of your company, your industry, and the types of employees you have.
We’ll get into what we feel is the best leadership style for small businesses in a bit. But first, let’s go over some of the popular leadership styles.
This leadership style is also known as the autocratic leadership style. This leadership style is best used when there is a clear vision, and the leader has the knowledge and experience to execute it. The leader makes all decisions and expects their team to follow them without question. The advantages of this leadership style are that it can be very effective in times of crisis and help get things done quickly. The disadvantages of this leadership style are that it can be very autocratic and lead to a lack of creativity and innovation.
This leadership style is also known as participative leadership.
This leadership style encourages team members to be involved in the decision-making process. The leader still has the final say, but they will consider their team’s opinion before making a decision.
The advantages of this leadership style are that it can lead to more creative and innovative solutions and help build team morale. The disadvantages of this leadership style are that it can be prolonged to make decisions and sometimes lead to conflict.
This leadership style inspires and motivates team members to achieve common goals.
The leader will provide a clear vision and set ambitious goals. They will then work with their team to help them achieve these goals.
The advantages of this leadership style are that it can lead to high levels of motivation and commitment from team members as they’re an integral component of the change. The disadvantages of this leadership style are that it can be very demanding and sometimes challenging to maintain.
This leadership style is about helping team members develop their skills and knowledge.
The leader will guide and support their team, but they will also expect them to take responsibility for their own development.
The advantages of this leadership style are that it can lead to high levels of motivation and commitment from team members, and it can also help to build team morale. While this leadership style can have advantages, like being more hands-on, it also means that it can take up a lot of time and be difficult to keep consistent.
This leadership style is about setting high standards and expectations for team members.
The leader will set ambitious goals and expect their team to meet them.
The advantages of this leadership style are that it can lead to high levels of productivity from team members. The disadvantages of this leadership style are that it can be very demanding on the team and lead to burnout.
This leadership style is about setting clear expectations and rewarding team members for meeting them.
The leader will set goals and objectives for their team and then provide rewards or punishments depending on whether these goals are met.
The advantages of this leadership style are that it can lead to higher motivation levels from team members as they feel they are being rewarded for their efforts. The disadvantages of this leadership style are that it can be very inflexible. This can lead to a lack of creativity and innovation and be counter-productive.
This leadership style is also known as the hands-off leadership style.
This leadership style allows team members to work independently with little to no supervision from the leader.
The benefits of this leadership style are that it could bring about more creativity and innovation as team members have the liberty to investigate different concepts. The disadvantages of this leadership style are that it can be very chaotic and lead to a lack of direction.
Take a look at your business.
Introspection is key to understanding which leadership style will best suit your business. Consider the size of your business, your team’s goals, and the company culture.
As a leader, you need to be able to adapt your leadership style to the ever-changing needs of your business. The best way to do this is to clearly understand the different leadership styles and how they can be applied to your business.
You should also think about your strengths and weaknesses as a leader. Once you understand all of these factors well, you will be in a better position to choose the best leadership style for your small business.
The best styles for a small business.
With that, what is the best leadership style for a small business? I wish we could give a definitive answer, but like everything else, there’s not. Here’s what we’ve come up with to get you thinking about what will work for your organization—
Democratic for smaller teams.
For businesses with fewer than ten employees, a democratic leadership style can work well. This style gives team members a say in decision-making and fosters a sense of ownership.
The best thing about this style is that it can lead to high levels of motivation and commitment from team members. While this style can be time-consuming in some cases, with a smaller team, you should be able to keep things consistent.
Pacesetter for businesses with a clear vision.
If you have a clear vision for your business, then a pacesetter leadership style can be highly effective. This style sets high standards and expects team members to meet them. You’ll need to ensure you have clear goals and objectives set for your team and how you will achieve them. If you do, this leadership style can lead to excellent results.
Remember that this can be demanding and leave your team with little room to breathe. So if you choose this style, ensure you’re constantly communicating with your team to see how they’re doing.
Transformational for evolving and adapting businesses.
A transformational leadership style can be beneficial for businesses undergoing a fundamental change. This style inspires team members to achieve more than they thought possible.
For example, if your business pivots from a brick-and-mortar to an e-commerce model, a transformational leader can help motivate and guide your team through this transition.
The best thing about this style is that it can lead to high levels of motivation and commitment from team members. This is essential as one of the key challenges during a business transformation is getting team members on board with the change.
Carefully monitor your staff, as this style can also lead to burnout if team members are not given the support they need.
Combination of leadership styles.
One of the best things about being a leader is that you can adapt your leadership style to the ever-changing needs of your business. For example, you may find that a combination of democratic and pacesetter leadership styles works best for your business.
Think of it like this. Let’s say your business is undergoing a significant change. You’re trying to get your employees onboard, but there’s some resistance. You might want to employ a bit of democratic, transactional, and transformation to get the job done. Not a single style is best for all businesses—it depends on the specific situation.
Something you can do right now is learn to understand and identify the different leadership styles. You should also know the individual characteristics of your team members. Numerous books, articles, and online resources can help you with this. With that knowledge, you’ll be in a much better position to adapt your style to whatever situation arises.
The bottom line.
The most important thing is to be aware of the different leadership styles and how they can be applied to your business. This will allow you to be a more effective leader and help your business achieve its goals.
Be ready to adjust as necessary. The best leadership style for your small business can change over time as your business grows and evolves. Pay attention to the needs of your team and be prepared to adjust your style accordingly.