Entrepreneurial Leadership: Inspiring, Aligning, and Managing Your Team
I was having a conversation with a friend recently and she told me about her boss, the founder of the small company she works at. Her department’s been struggling a lot in the past few months, but instead of rolling up his sleeves to offering to help them get through it, his reply was, “I’m sorry you’re going through that.”
While you can’t be involved in every bit of day-to-day work as an entrepreneur, you do have to make sure your team knows you’re on their side. Sometimes that means moving resources around so they get the support they need and sometimes it just means offering a listening ear.
On the other hand, I’ve had the pleasure of working with some fantastic entrepreneurs in the past. The ones I admire the most are supportive, transparent, and downright inspiring to work for.
This reflection got me thinking about the subject of entrepreneurial leadership.
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What is entrepreneurial leadership?
Entrepreneurial leadership is a leadership style based on inspiring people to achieve a common goal. It is about giving your team a strong sense of purpose and instilling the passion to pursue it while giving them the confidence to take a certain amount of risk.
Entrepreneurial leadership is more than just a leadership style; it is a mindset, and it’s not just useful for people who start businesses. I’d guess that there are probably as many good entrepreneurial leaders at large companies as there are in small ones.
Entrepreneurial leadership is about properly conveying the risks and opportunities to your team. Unlike conventional leaders, entrepreneurial leaders do not just follow the status quo. They are change-makers who act proactively, have a vision, and take bold steps to turn it into reality.
Unique Leadership Challenges Entrepreneurs Face
As I’ve hinted at, not every entrepreneur is a great entrepreneurial leader.
Many founders start companies because they want freedom, but quickly realize that in order to grow, they have to become full-time leaders and servants to their teams.
Becoming an effective leader is not easy—especially for small business owners. You are faced with countless challenges unique to entrepreneurs.
For one, it’s hard to find great advisors eager to mentor start-up leaders. Many mentorship programs require time and fees that inexperienced entrepreneurs find hard to justify. Mentorship is probably one of the most underutilized assets new entrepreneurs have.
Another challenge entrepreneurs face is stepping away from running the company long enough to delegate to others. Many focus too much on the quality of their business offering instead of allowing others to take over and independently learn and grow.
Finally, there are also resource constraints. Without an HR department, cushy benefits, or fancy office space, it can feel hard to reward and retain top talent. The key is to find people who are more motivated by the mission than the money, but this isn’t always easy for entrepreneurs who want to hire “the best in the industry.”
Entrepreneurial leadership means looking at these constraints and understanding how to work around them and use them to your advantage. It means inspiring people to do more with less and then using your early success to build up resources that allow you pay more, do more, and run a more successful business.
Types of Entrepreneurial Leaders
If you’ve read stories of entrepreneurs like Steve Jobs, Bill Gates, or Mark Zuckerberg, you know that they each have their own style of entrepreneurial leadership. It’s interesting to compare some of these leadership archetypes and understand the pros and cons of each. For that, here are three types I’ve been thinking about lately:
Richard Branson, the Visionary, Laissez-Faire Leader
The founder of the Virgin Group has always been known for his unconventional business approach and leadership style. Since publishing the magazine Student and forming Virgin Mail Order Records before he turned 20, he has defied odds and built the Virgin Conglomerate over a lifetime of work. Even with over 60 companies in his stable today, he continues to innovate and develop new ideas.
Branson is known for his laissez-faire type of leadership. He sets goals but generally lets people figure out how to achieve those goals. He encourages people to take risks, break rules, and experiment. He offers guidance but also lets people learn from their mistakes.
Allowing people to mess up is crucial to entrepreneurial leadership. If everyone on your team fears making mistakes, you’ll end up making all the decisions for them, stalling growth and limiting your team’s potential.
Elon Musk, the Transformational, Inspiring Leader
Spearheading cashless transactions with PayPal, stylish electric cars from Tesla Motors, energy-efficient power systems of SolarCity, and state-of-the-art rocket technology by Space X—it’s hard to deny that Elon Musk has a visionary view of the future.
Musk is a transformational leader with an impressive ability to inspire others (even to a fault). He has outlandish ideas that he feels will make the world a better place and he has the charisma to inspire people around him to work for this vision.
Jeff Bezos, the Pragmatic and Disciplined Leader
While he’s mainly known for founding Amazon in his garage, Jeff Bezos also has holdings and investments in various companies. Bezos grew his wealth by investing in multiple market sectors, capitalizing on innovative ideas, and tenaciously running his e-commerce giant.
Known as a pragmatic leader, Bezos sets high standards and expects his employees to meet them. He is somewhat of an autocrat who demands people who work for him to be disciplined and goal-oriented. He’s also known to instill leadership best practices across his organization.
Most entrepreneurs are not as extreme as any of the three leadership styles above. Most likely, your style will fall somewhere between two or three poles, but having elements of all of these entrepreneurs might be helpful.
No matter your style, you have to have and share a vision that people will passionately work towards. You cannot be afraid to take risks or abandon pathways that don’t lead you to your ultimate goal. Finally, you need to be able to grow and learn from mistakes along the way.
Developing Entrepreneurial Leadership Skills
If you run your own business and you know you’re not as strong a leader as you’d like to be, that’s okay. We all have room to improve. I’ve been leading teams for almost 10 years now, and just last month, one of my employees had to call me out for a leadership misstep that was obvious in retrospect.
Nobody expects leaders to be perfect, but like everything in entrepreneurship, leadership is a skill you can develop and hone.
1. Set a clear vision
Tumblr’s David Karp says that entrepreneurs need to be “someone who has a vision for something and a want to create.” You must be able to craft a vision for your business and articulate this vision to others to inspire them. This vision will guide everyone on the team and unite them in a common goal.
2. Build trust through transparency
Let your team know you trust them by giving them more responsibility and being open with them. Delegate tasks and make them feel that you completely rely on them to do their best.
Open communication channels where team members can easily connect with you and the rest of the team help build trust and comradery. While I’m not a fan of Slack, it has its place in some businesses.
3. Listen
“When people talk, listen completely. Most people never listen.” - Ernest Hemingway
Communication is a two-way street. Although you might be in command, learn to listen to the opinions of your team and customers. Be open to constructive criticism, and hear out complaints and suggestions. I’ve learned much more from my failures and mistakes than anything else.
4. Be the helper, not the instructor
“It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.” - Steve Jobs
Inexperienced managers tend to act like more instructors than enablers
In the worst case, this can turn into micromanagement that hinders your company and team growth. Instead of telling people exactly what to do, let them try things first. Allow them to learn from their mistakes but offer help when they struggle.
5. Create a collaborative work environment
Entrepreneurial leaders know the value of teamwork. Let everyone in the team contribute to the success of your business. Don’t be constrained by hierarchy and allow them to freely express their ideas in an environment that fosters camaraderie.
6. Develop standard rubrics and performance expectations
Accountability is important in any organization. Give your team the freedom to devise their own methods in accomplishing their tasks and finding solutions but keep them accountable by setting clear performance standards. Make sure these standards are understood and attainable.
7. Keep learning
Have a growth mindset. A lot of entrepreneurs think that just because they’ve run a successful business before, they don’t have anything to learn this time around. This is incredibly short-sighted and naive.
8. Keep pushing the boundaries
Once your business is running steady, it’s easy to sit back and get comfortable.
But, one of the key traits of an entrepreneurial leader is having an innovative mind that sees upcoming trends and knows how they’ll impact the status quo.
Reed Hastings, entrepreneur and co-founder of Netflix, once said, “Most entrepreneurial ideas will sound crazy, stupid and uneconomic, and then they’ll turn out to be right.” For all you know, your crazy idea might just be the next big thing. So, expand your horizons and widen your perspective to develop solutions for problems that can be anticipated in the future.
Constant innovation is key to business continuity. Motivate your employees to come up with ideas on how to update features or refine products. Get insights from customer feedback to understand how you can continually meet their needs.
Looking for more reading material for startup founders? Here are my favorite books for entrepreneurs, updated this year.