How to Successfully Lead Your Small Business

As a business leader, you want to make sure you do right by your staff AND your business. You’ve probably seen all sorts of hoopla about new leadership-style research and team-building exercises that claim to have The Answer. Do these new tactics and methods make you a better leader for your team? Before discussing how to successfully lead your small business, let’s take a step back and talk about what a business leader actually does.

What Does a Business Leader Do?

A business leader looks out for the overall health of the company. They operate at a 30,000-foot view that shows the big picture rather than getting lost in the details. Business leaders spend their time thinking about the long-term direction for the business and strategies to get there. With selected strategies, they put structures in place to get the work done.

When it comes to leading people, business leaders constantly look for ways to inspire and motivate their employees. This is especially important during times of change. Good business leaders will also work on succession planning — or having people to take over to carry on the good work they’ve started.

Business leaders have to adapt to constant change, whether in the market, in their industry, or among their team. Flexibility and people skills help a business leader get work done through delegation instead of actual execution.

What Qualities Make a Good Business Leader?

You can always learn new leadership skills, but good business leaders have certain innate qualities like:

1. Optimism

Confidence about the future or a successful outcome of a project or situation. UK Prime Minister Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

2. Integrity

Being honest and fair, and having strong moral principles. In other words, they do the right thing. “Integrity is the choice between what is convenient and what is right,” former NFL coach and sports analyst Tony Dungy has said.

3. Grit

Courage and resolve, passion and perseverance despite obstacles or setbacks, aka “you got guts, kid.” Singer-songwriter Dolly Parton said: “Above everything else I’ve done, I’ve always said I’ve had more guts than I’ve got talent.”

But what else is important?

Common traits of successful leaders include:

• Intelligence
• Adaptability
• Fairness
• Assertiveness

Leaders need a certain level of industry knowledge and the ability to switch plans quickly and make decisions swiftly and fairly.

However, every person brings something different to the leadership table. Rather than trying to conform to some model business leader persona, they capitalize on their unique traits by learning how to apply them in the business world.

Organizations like KOLBE, CliftonStrengths, and DiSC Assessment help leaders determine their dominant qualities and how to use them for team success. While not necessary to the success of a business leader, these assessments can help guide interactions with other personalities in a company.

What Skills Are Needed for Leadership?

Each industry requires leaders to have different skill sets, but in general, leaders should learn the art of decisiveness, excellent time management, motivation, and clear communication.

1. Decisiveness

A good leader learns to make decisions quickly. “Paralysis by analysis” can come from fear of making the wrong choices. Business moves fast, which means that by not making decisions quickly, leaders have their choices made for them. Many entrepreneurs will say it’s better to fail fast (and often) than to sit on the sidelines, watching others succeed.

2. Excellent Time Management

Nearly all of us can do better on how effectively we use our time. As the only truly limited resource, time has been called the most valuable of human capital. Using time wisely could look like learning to work smarter by delegating certain tasks to others and avoiding micromanaging them.

3. Motivation

To run a successful business, leaders need to understand what encourages their employees to work toward the same goals. Learning how to motivate a team doesn’t always mean just shelling out monetary incentives. People also like to see how their role helps their company succeed with incentives to give it their all. Good leaders learn to celebrate the ways each member of their team contributes to the greater good of the company.

4. Communicate Clearly

Communication can make or break a company and is rarely as simple as sending out one email on a topic. Just because communication can be simple doesn’t make it easy. Business leaders must learn how to communicate effectively with their direct reports. And those managers should communicate effectively with their reports … all the way to the front-line workers. There should also be mechanisms in place to share information up the chain as well.

Finally, leaders should embrace a growth mindset. They set the culture for their companies. And nothing speaks louder than business leaders continuing on their professional development while encouraging their teams to do the same. To stay competitive in their field, leaders and their teams should never stop learning. And they never stop working at improving their leadership skills through workshops and research. For example, How to Be a Great Boss, by EOS® founders Gino Wickman and René Boer, offers countless tools for leaders.

Which Leadership Style Works Best for Small Businesses?

Which leadership style works best for small businesses doesn’t necessarily have a straight one-size-fits-all answer. Depending on the organization, industry, and types of employees, certain leadership styles work better than others. Leadership styles can blend and change over time. Managers may also find that they adopt portions of different styles depending on the team member.

1. Authoritative

Sometimes likened to drill sergeants, leaders who use this style need their teams to achieve a specific set of outcomes. Every member of the team conducts the same kind of work following standard operating procedures.

Works best if: Employees must follow a prescribed checklist to complete tasks in a specific order to complete the project. Or if employees conduct repetitive tasks such as those on an assembly line.

Often fails if: The work requires novel problem-solving or interpersonal skills or focuses on the accomplishments of each individual.

2. Autocratic

These leaders “rule” with a tight fist and often an air of smarminess. “Because I said so” should be reason enough for employees to do their bidding. Autocratic leaders leave little to no room for employee input.

Works best if: Shades of this style might be adopted only in very short, critical moments that call for instantaneous decisions.

Often fails if: The scenario that doesn’t involve blood or fire.

3. Democratic

Democratic leaders ensure that every employee has an opportunity to voice their opinion before making a decision. While there is an identified leader, they treat each voice with equal importance.

Works best if: Teams require the unique skill sets of each individual to complete their work.

Often fails if: A decision needs to be made quickly. This style also won’t work if the leader must make an unpopular decision for the good of the entire company.

4. Coaching

Imagine the leader in this style as either a coach or a personal trainer who is invested in employee growth.

Works best if: Employees work individually and hone skills incrementally, such as in sales.

Often fails if: An employee consistently underperforms and the leader tries more coaching instead of replacing for a better fit. This can also neglect other team members.

5. Laissez-faire

This approach allows teams much more leeway to do their thing unencumbered by a micromanager or any accountability recall. These leaders often lose touch with projects and develop issues by assuming the team has things under control.

Works best if: Managers lead intrinsically motivated employees who have plenty of experience and can self-start.

Often fails if: The leader’s behavior could get mistaken for aloofness with a more hands-off approach or lead to a breakdown in team structure and direction.

6. Pacesetting

Highly driven and somewhat impatient leaders adopt this style when they want to go somewhere fast. Imagine the guy in the back of the boat barking, “Stroke! Stroke!” to the rowing team faster and faster.

Works best if: A leader works alongside other highly driven individuals. This breakneck pace can help teams sprint to finish projects, but with proper rest periods before the next sprint.

Often fails if: Employees are turned off by the stress and speed expected. Used for longer periods of time, it also directly attributes to team burnout.

Looking for more ways to be a successful leader for your small business? Consider scheduling a quick chat with an EOS Implementer® Match Specialist to get started.