What is the Best Leadership Style for Startup Companies?

Deep Dive
April 30, 2019 By Jackie Connor

Leadership comes in many different styles, from conquerors and peacemakers to innovators. Many historical events or pivotal inventions materialize because someone who was particularly passionate about an idea or concept was able to motivate a team or crowd to pave the way for progress.

During a recent Wayfinder Workshop, Richard Sudek, UCI Applied Innovation chief innovation officer and executive director, explained leadership styles within startup companies, dispelled stereotypes and described leadership styles when blazing trails for startups.

“Often people talk about leading and managing and the point to make clear here is there is a distinction,” said Sudek. “A leader creates mission and purpose, and managers implement that mission or vision.”

When it comes to leadership, two specific styles resonate with entrepreneurs, according to Sudek. Charismatic leaders typically have engaging and magnetic personalities and, as a result, are able to influence a team.

“Often these leaders have self-confidence, they have vision, they are able to communicate that vision and are sensitive to the environment, to the context of the situation and the people in the situation,” said Sudek during his presentation.

Startup companies also respond well to transformational leadership, or leaders who are mission-driven and inspire others to follow them and their goals. Successful entrepreneurs are often transformational leaders, according to Sudek. These leaders encourage the team to be a part of something bigger than themselves, or the mission transcends self. Transformational leaders tend to be very confident in their judgement abilities and realistic about their constraints.

Although there are similarities between the two, transformational leaders tend to appeal to the team’s values and stimulate strong emotions about the mission itself. And while both styles stir strong feelings, charismatic leaders focus on the emotional connection and the team tends to follow the leader versus the mission.

Sudek emphasized the ideal leadership style to be a combination of transformational and charismatic for startup teams. As opposed to solely a charismatic leader, a transformational with charismatic traits creates a purpose and can stimulate motivation and drive among team members.

“Being genuine and giving people common cause and vision is most important,” said Sudek. “You can do that by yelling or you can do that quietly, but you need to adapt your style to this situation.”

Sudek also discussed the concept of shared leadership, or non-centralized sharing of power and influence among the team. This leader not only shares influence over the team, but also is able to shift the leadership to a team member with the most expertise in a certain area.

“In startups, you have to share the power,” said Sudek. “You have to have a shared purpose, which aligns well with transformational leadership. You have to help your team see that one can lead from any seat at the table.”

With this leadership style, team members feel they have a direct impact to exact change. In a healthy shared leadership environment, the team does not have to wait for the leader speak, according to Sudek. They feel empowered to speak based on their areas of expertise or the topic.

“What leadership style is best? There’s no one answer – depends on the situation, the kind of team you have and the type of leader you are,” said Sudek. “Being genuine, giving people common cause and vision, and sharing of leadership when appropriate, is most important.”

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