Leadership in Small Business

September 11, 2015 | Roger and Susie Engelau

Leadership in small business is even more critical than in large corporations.Leadership in small business

Are 100% of your employees clear on the priorities 100% of the time and do they give you 100% of their energy and talent 100% of the time? How about 90%?  Or do you have employees who are floundering, confused by conflicting priorities, fuzzy on processes, or starved for feedback?  If so, effective leadership in small business plays a large part of the root cause.

Do you believe that the difference between a positive and a negative climate in your company can mean a difference of 30% in your bottomline profit?  It’s true. And one of the biggest factors affecting the climate in your organization is your leadership. And the leadership of your managers and supervisors.

Sure, you may have someone who needs more training or truly have an underperformer but, much of the substandard employee performance is the result of a leadership style that occasionally, or frequently, confuses, demoralizes, and demotivates.

To be effective at leadership in small business, you need to understand that different situations call for different styles.

Regardless of your dominant style, the goal is to be able to use all 6 leadership styles and to know WHEN to use each. Here’s a deeper dive into each, including when to use each one:

  1. Coercive—demands immediate compliance
    • Behaviors: giving clear directions, not asking for input, making tough decisions on the fly, monitoring work closely and addressing problems quickly.
    • Example: drill sergeants, military leaders, Gregory Peck’s “General Savage” in the movie, Twelve O’Clock High
    • When to use: In crisis situations, difficult turnarounds, problem employees
    • Effect on climate: Very negative, especially if it’s your dominant style. It should be used only rarely.
  2. Authoritative/Visionary—mobilizes people toward a vision
    • Behaviors: Often heard articulating the vision, confident, empathic, articulates where the team is going, encourages people to innovate, experiment and take calculated risks within the framework of the vision.
    • Example: Mel Gibson’s “William Wallace” in Braveheart gives us a beautiful and memorable example when he’s riding back and forth in front of a long line of beleaguered, long-suffering troops shouting his “They will never take away our freedom” speech.
    • When to use: During change, and when isn’t there change? So it’s good style to use a majority of the time.
    • Effect on climate: It’s a good style to fall back on when in doubt.
  3. Affiliative—creates emotional bonds and harmony
    • Behaviors: Praises, promotes harmony, values people, friendly, openly shares emotions; promotes collaboration and interpersonal relationships; builds team spirit, tries to keep people happy.
    • Example: This might be Jimmy Stewart’s “George Bailey” from It’s a Wonderful Life who, during the depression, keeps his bank alive for the poor. His motto is if you treat your customers and employees right, they’ll always come back to you.
    • When to use: To heal conflicts in team or motivate people during stressful situations.
    • Effect on Climate: Positive but if overused, you could lose your shirt.
  4. Democratic—builds consensus through participation.
    • Behaviors: Asks, “What do you think?” Seeks input, listens to thoughts and concerns, open to ideas, takes a team vote.
      Example:  Henry Fonda’s “Juror #8” uses various techniques to sway fellow jurors to change their guilty votes 12 Angry Men. His techniques include rational persuasion, ingratiation, and an inspirational speech.
    • When to use: To build buy-in, to get input from employees who have more expertise than you, and when you have solid-performing employees.
    • Effect on climate: Positive but used too much it consumes time, can result in watered-down decisions, and sometimes employees just want a leader who steps up and makes a decision.
  5. Pacesetting—expects excellence and self-direction.
    • Behaviors: Driven to achieve, conscientious, high expectations of self and others, intolerance of incompetence.
    • Example: Ed Harris’ “Gene Krantz” in Apollo 13… “Failure is not an option.”
    • When to use: To get quick results from a highly motivated and competent team, with a new employee in training.
    • Effect on climate: Negative if used more than rarely. Employees can give that extra push occasionally but sustained use results in burnout.
  6. Coaching—develops people for the future
    • Behaviors: “Try this,” delegates challenging tasks, supports, encourages, sees mistakes as learning, helps others identify development needs and set goals.
    • Example: Pretty much any of the sports movies, like Coach Carter, Rudy, Remember the Titans, The Game Stands Tall…  In business, it’s common to see leaders use this style temporarily but not generally as a dominant style.
    • When to use: To help employees improve performance
    • Effect on climate: It’s a good style to use over the long term but overuse can be perceived as micromanagement

You and/or your leadership team are the sole source of leadership in small business… it all rests with you and you must be effective at it.

In addition to developing your company’s business plan, we’ll be discussing the 6 leadership styles at my next quarterly Growth Plan Workshop. Join us for a day of individual work on your company’s plan, short educational periods, work in small groups, and a nice hot lunch together.

You’ll walk away with:

  • A clear picture of where you want your business to be in 10-30 years, a 3-5 year plan, a 90-day plan, & monthly goals broken into weekly actions
  • The ability to master the 6 leadership styles so that your business results grow

Thur., Sept 24, 2015, 9 – 4 pm
Hilton Garden Inn Indianapolis Airport, 8910 Hatfield Dr., Indianapolis  46231

Register for this quarter’s Growth Plan Business Planning Workshop here.