Master These 4 Leadership Styles for the Stages of Your Business
September 8, 2017
When it comes to business leadership styles, there’s an obvious sentiment that bears repeating: How you manage is as important as who you manage, if not more so. To ensure your business weathers any storm, your leadership style should incorporate various management methods to use in different situations. But for even the most experienced business leader, that can be easier said than done.
Fortunately, many leaders in the field of leadership itself have paved the way. From classic research by John R.P. French, Jr. and Bertram Raven in the late 1950s on The Bases of Social Power, to Ken Blanchard’s classic take on the situational aspects of leadership style, there are myriad resources to help you evaluate options. Blanchard’s outline of the four stages of growth, and their corresponding leadership styles, is particularly useful.
With a solid understanding of each stage and style required, you’ll be well-positioned to tackle anything that comes your way.
1. Start-Up Stage: Champion
In the early days of an organization’s lifecycle, the necessary leadership style is that of Champion. To be a successful leader, you must literally champion ideas, concepts and value propositions to current and potential sources of capital, employees and customers — essentially, those who will engage with and buy from the company.
In the role of Champion, you are responsible for guiding the company’s vision, plan for growth and potential. To achieve significant business growth, Champions must effectively visualize the future of their company. Doing so will serve to align needed resources and talent as the business moves forward.
2. Build-Up Stage: Leader
In the Build-Up stage, the organization has moved from simply surviving to thriving. Your company should be focused on adding customers to drive revenue. Here, you will need to expand your team to provide the functional support to serve these new customers. So you must shift from Champion to Leader.
It’s no longer enough to articulate a vision. Instead, Leaders must wear different hats to model how to best execute that vision. Here’s where you’re empowered to forge your organizational culture: The way you respond and allocate scarce resources will establish the core principles or fundamental ideas about the values of your organization.
3. Build-Out Stage: Leader of Leaders
During the transition to the Build-Out stage, you must shift from focusing on revenue growth to profitable growth through professional management.
A key characteristic of this stage is the initiation and development of a management or leadership team. You must shift from the more autocratic, directive style required in the first two stages to a more collaborative, delegating leadership style. Managers now hire and manage people rather than processes.
This leadership style is that of a Leader of Leaders. To be most effective, you should focus on helping others become better leaders. You must rely on the judgment and decision-making of others over your own.
4. Enterprise Stage: Coach of Leaders
In the Enterprise stage, an organization typically boasts a complex structure, often with multiple lines of business and multiple professionals managing interdependent P&L statements.
You must become a Coach of Leaders. You need to become an adviser to those entrusted with moving the business forward. As other leaders take full ownership of day-to-day operations, you will be empowered to focus on developing a strategy for next steps.
Here, you should focus on succession planning, estate planning and developing either an exit strategy or a re-investment strategy.
The bottom line? Knowing when to apply each of these leadership styles is a crucial skill. Unfortunately, many CEOs don’t spend enough time moving between stages — from Leader to Leader of Leaders, in particular, as this transition requires the biggest shift in leadership style.
But as CEO, you can’t simply do more of what’s worked in the past. As a business grows, so must its leaders, and your ability to adopt different leadership styles is crucial to your organization’s success.