“Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.” ~Sam Walton
What makes someone a good family business leader? This simple question can sometimes be difficult to answer. A good leader is more than a manager. Being a good leader has nothing to do with your seniority level, your title or your personality. Having good leadership skills isn’t necessarily something you are born with, it can be learned. What exactly, is the definition of leadership? In his book Leadership: The Successful Leader- Maximize Your Potential and Lead Like You Were Born To!, Steve Williams defined leadership this way:
“The truth is, when you are a true leader, you will be involved in the activity, each person you are leading will be in the best position according to their skills and talents, and you will not have to tell people what to do or micromanage, because they will be following your lead.”
Leadership is a process of persuasion. It involves earning the trust of your family business team by demonstrating and showing interest in their well-being. Not all family business leaders lead in the same way. There is more than one type of leadership style. Building effective leadership skills depends on many different factors including who you are trying to lead.
Let’s look at a few of the most widely used methods for leadership style categories and examples of each. In a future blog post we will discuss how you can sort through them and discover the best leadership style for you and your family business.
- The first category comes from famed social psychologist Kurt Lewin. He identified three leadership styles:
- Autocratic makes decisions without consulting team members. They emphasize following rules. It’s useful when quick decisions need to be made, such as in an emergency. This type of leadership is ineffective and hurts morale.
- Democratic seeks out input from other team members, encourages creativity and values the team members’ individual skills and knowledge. This type of leadership leads to high productivity and job satisfaction.
- Laissez-faire lets team members make decisions without direct or very little supervision. The laissez-faire leader trusts his team members and doesn’t need to monitor activities. This is a good style when employees are highly experienced and need little direction.
- The next category grouping comes from psychologist and author Daniel Goleman. He identified 5 more styles:
- Coercive leadership style demands immediate compliance with any orders given. They make the decisions alone and team members are expected to follow them without any comments. This style is effective in times of emergencies.
- Visionary leaders inspire their followers to strive for something better. He moves people to work toward a goal that benefits everyone. This style is effective when change is needed.
- Affiliative leaders create emotional bonds and harmony with their team members. The leader wants their followers to feel like the organization is part of their lives instead of just a job. This type is good at boosting morale, but needs to be used with other styles to be effective.
- Coaching style is more like a teacher than a boss. The coaching leader guides their team to develop themselves for success in their work and personal lives. This style of leadership is good when working with new or less experienced employees while they gain experience.
- Pacesetting leaders focus on excellence in work and expect the same from all other members of the team. This style works when the team is already motivated to accomplish the goal. Overuse leads to burnout and exhaustion in many employees.
As you can see leadership styles vary greatly depending on the needs of the family business team. Each one has a place but each one on their own may not be as effective as a combination of two or more.
Pete Walsh offers family business consulting services, workshops, tools and resources as the founder of Family Business Performance Center. Subscribe to his newsletter or get in touch to get actionable insights to help your family business grow for generations to come.