Human capital is the most important asset for almost every startup. Competent managers need to understand how to utilize their employees effectively to drive their organization forward. They need to find a balance between giving direction and allowing employees the freedom to do their jobs.
This means that they must find the best leadership approach. If you aren’t familiar with your own leadership style yet, then you may want to take this questionnaire from Pace University.
What are the Two Major Approaches to Leadership?
There are two main leadership styles – authoritative and facilitative. Authoritative leaders provide a lot of direction to their employees, while facilitative leaders tend to leave their employees to their own devices. Most leaders blend both styles, but tend to lean more towards one over the other.
Your leadership style plays a very important role in the outcomes of your organization. Which is appropriate for your business? It is difficult to say, because a study from Augusta University found that there are significant differences between leadership preferences among employees and students. Here are some things to consider.
Education and Experience of Your Employees
You need to decide how well you can trust the judgment of your employees before committing to a leadership style. If your employees are well educated and experienced, then you may be able to give them a lot more flexibility.
However, you should base this decision more off your personal experiences with your employees than their credentials. An employee may be highly trained in a given field, but if they are a new hire that lacks an understanding of your business, then they probably need a bit more micro-management. Understanding what your employees are best at, can handle and how autonomous they are when given a task is most important when bringing a team together to accomplish a project or goal. The team at 888 Ladies explains just how important this is in The Making of Treasure Fair, “An endeavor like the creation of Treasure Fair involves dozens of people across numerous teams in a multidisciplinary organization like 888: creative teams, product management, development, QA, marketing, and more.”
Number of Direct Reports
An authoritative leadership style can make more sense in an organization with a vertical structure, since each manager has fewer direct reports. It isn’t as feasible in a horizontal organization, because managers can’t easily manage a large number of employees. The more employees you have, the more important a facilitative leadership style becomes.
Regulatory and Liability Issues
In most organizations, managers are almost invariably held accountable for anything that goes wrong. In situations where there are serious liability issues, a more authoritative leadership style may be preferential. You need to make sure that your own interests are protected to avoid legal and financial liabilities if one of your employees makes a mistake. This is especially important if you are in a position where people’s lives or expensive capital is at risk.
Growth Strategies at Higher Levels of Management
It can be difficult to grow an organization if senior employees are spending most of their time overseeing their staff. Senior managers are often much too busy to be micromanaging all of their direct reports. They are more likely to need to follow a facilitative leadership style to ensure the company moves forward. Authoritative leadership styles may be better suited for lower tier managers.