What is the optimal leadership style for an owner/CEO of a medium sized business?
Daniel Goleman's research on Leadership resulted in defining six different styles of leadership and showed that an individual can exhibit more than one style, in fact a good leader can use different styles in different contexts with different people or teams. That said most leaders have a default leadership style or a bias towards one. It should be noted that key leaders of businesses < 350 people that their blend of leadership styles more often than not creates the environment within the business.
For example if a leader has a default dominant Commanding style then many people in the business may not feel like speaking up and sharing ideas though the business is likely to get through a crisis quickly with this dominant style.
On the other hand a leader who has a default dominant Affiliative style may create a business environment that feels great for all employees but things may not be getting done with the urgency that their clients expect. This shows there are times and places to use different leadership styles and that includes the size of a business as it faces different growing pains.
Based on research of 1,300 small and medium businesses by the ReWild Group, it has been determined that there are optimal Leadership style blends for different stages in the growth cycle of a business and includes a dominant, secondary and tertiary style. This post only focuses on the dominant leadership style for businesses.
After the Start-Up Stage 1 when a Visionary Leadership default style is understandably needed, the emphasis needs to shift to a Coaching leadership style as the key leader needs to start to move the organisation from an Owner-centric to an Enterprise-centric model. To move the organisation to an Enterprise-centric model they need a strong management team in place and to achieve this these new leaders need coaching. Following this key phase then the leader needs to shift their style to Democratic to ensure they are gaining by-in from the whole organisation but in particular the leaders.
As they further grow their business through the next stage they will need to emphasise their Pacesetting leadership style as they build their Leadership Team (LT). Once that has been achieved and they can leave the day to day management of the business to their LT then they need to shift their style to a dominant Visionary style which happens to be the dominant style required in stage 1 taking it through a full cycle.
ReWild Business Size Stage
Optimal dominant Leadership Style
Employee number of the business
Coaching: focuses on personal development rather than on accomplishing tasks.
Democratic: approach works best when the leader is uncertain about what direction to take and needs ideas from able employees.
Pacesetting: holds and exemplifies high standards for performance.
Visionary: articulate where a group is going, but not how it will get there.
Commanding: With a motto of “Do it because I say so,” such leaders demand immediate compliance with orders, but don’t bother explaining the reasons behind them.
Affiliative: are masters at building a sense of belonging.
What is your dominant leadership style and does it fit with your business' current needs?