Lead Your Small BUsiness to Success

Leading your small business is important for success. In this blog, we review why leadership is important, types of leadership, qualities of a leader, statistics and more.

Why is strong leadership important?

Your role as a leader is to help motivate your team, delegate projects and assignments, and provide direction to your team members. Without a strong leader, businesses struggle to grow and adapt to the modern market, and the work environment can crumble due to a lack of solid leadership to help guide everyone to success.

Let's look at some statistics to see how leadership quality can affect your small business.

- More than 77% of organizations state that leadership is lacking.

- 79% of employees state they quit jobs due to a lack of appreciation.

- 69% of millennials believe there is a lack of leadership development in business, which isn’t good when over 10,000 baby boomers retire daily, putting more pressure on younger generations to fill those leadership positions.

- 76% of workers stated in a survey that work stress has negatively impacted their relationships, and 66% of them reported losing sleep because of work stress.

- 35% of those surveyed identified their boss as a major source of stress at work.

- 91% of employees feel their leaders do not communicate effectively and clearly.

- On average, organizations can gain a $1.50 return on investment for each $1 spent on leadership development.

Leadership Styles

• Autocratic Leadership - Autocratic leaders give clear and precise expectations for what they want from their team. This is probably what comes to your mind first when you think of a leader or what being a leader entails. This type of leader takes little to no advice from team members and has a very strong “do what I say, or else” tactic when disciplining and directing a team. This style is very good for efficient decision-making and consistent results, but many consider it one of the least effective styles due to the stress it can cause your team members. Such a rigid environment doesn’t allow your team members to grow, and it can lead to high levels of stress and dissatisfaction, leading to low-quality work.

• Democratic Leadership - Democratic leaders allow their teams to be included in the decision-making process, but they reserve the right to make the final decision. This leadership style allows for more creativity within the team and how they interact with you, other team members, and projects for the business. This leadership style can lead to higher levels of satisfaction and productivity within your team. However, this style may cause issues when it comes to projects and choices that require quick decisions.

• Transactional Leadership - This is one of the more common leadership styles in today’s society. As the name implies, a leader who uses the transactional leadership style implements rewards or punishments for their team to help motivate them to complete tasks or projects and avoid missing the mark. This form of leadership is best used for projects and goals that do not require creativity or independent thinking. An example would be a team that will get a bonus for meeting a sales goal by a specific time. If this style is used too much, though, it could run the risk of lowering intrinsic motivation because of how much it relies on extrinsic motivation. Overall, it could make your team stop wanting to do good for their own satisfaction and goals and make them focus more on the external rewards. Still, even that desire can diminish over time, so it’s best to use this as your main motivation as a leader in limited amounts.

• Coaching Leadership - The coaching leadership style is very similar to the democratic leadership style, but this style puts focus on the personal and professional development of your team. Coaching leaders focus on finding their team member's individual strengths and nurturing them rather than building a team up around the same qualities. Their goal is to build a well-rounded team that respects each member's individual skill sets to reach goals collaboratively. The coaching leadership style is great for allowing personal and professional development through creative thinking. This form of leadership takes a lot of time, resources, and extensive effort from a leader, and this could run the risk of draining them.

• Laissez-faire Leadership - This form of leadership is the most free-range out of all the types. A leader who uses the laissez-faire style of leadership gives their team members a large amount of freedom about how they do their work and allows them to dictate their own deadlines. They offer advice and support to their team members if they desire, but other than that, they don’t get very involved in the process with their team members. This style of leadership can lead to high job satisfaction, but if team members have problematic time management skills or lack motivation to do their work efficiently and in a timely manner, then this style of leadership can lead to more harm than good within your team.

• Transformational Leadership - The transformational leadership style focuses on finding ways to change and repair ineffective systems and processes within a business. They also focus on finding ways to push their team out of their comfort zones, so to speak, and promote growth among their team members as they raise the bar higher and higher through motivation and do what they can to inspire their team to see the potential within them. If done correctly, this form of leadership can lead to higher group satisfaction and performance within the business. If done incorrectly, though, it can cause high levels of burnout, which can lower performance levels and raise turnover rates as the team members leave to find other jobs. This form of leadership requires a leader to have high emotional intelligence and be able to learn how each individual member of their team learns best.

What qualities are important for a leader to have?

• Hold yourself and those around you accountable. Accountability is an important skill to have when one of your main goals as a leader is to set and maintain expectations, deadlines, and projects within your team. If you, as a leader, cannot make sure your team stays on track or hold yourself to the same standards as you hold your team, then your effectiveness as a leader will lower.

• Listen to your team. The difference between a leader and a dictator lies in your ability to listen to your team members and customers within your business. If you don’t listen to those “under” you, then you run the risk of losing valuable information on how to improve the team, motivate them, and improve overall satisfaction for all those interacting with you and your small business.

• Provide stability for your team. Creating a work environment where your team feels safe and depends on you to care about their concerns, answer their questions, and depend on you as someone they can follow.

• Keep a positive mindset. Keeping a positive mindset and image within the work environment can help build a healthy work environment and boost team morale. If your team sees you as happy, calm, and secure, they will also start to feel the same way. Positivity is contagious, and keeping things as positive and secure within your business as you can will go a long way to making sure everyone in your team feels happy in their position.

For more tips on how to be a strong leader within your small business, check out these articles:

• How To Be A Leader For Your Small Business

• How To Be a Good Leader (With Tips and Examples)

• 3 Simple Steps to Succeed as a Small Business Leader

Leadership skills are essential to maintaining a healthy, productive, and prosperous work environment in your small business. Finding the leadership style that fits your team and desired work environment is important. If you’re looking for new ways to learn how to lead your team and develop your leadership skills, contact Comprehensive Consulting Solutions for Small Businesses for help!