The truth is that a majority of startups fail because they don’t have the right team. According to research from CBInsights, this accounts for 23% of failed businesses, but a lot of that has to do with leadership. A company can’t succeed without solid management style that sets up lower-level workers for success, but picking the right management strategy isn’t an easy task. There’s no one size fits all solution, and a Gallup poll found that companies fail to choose the right management talent a whopping 82% of the time. So, why is it so hard to get right?
Using the right management approach is a difficult balance between personality, business model, and current circumstance. The most successful managers are willing to bend and shift management styles when the situation calls for it. So, how do you choose the right one? These styles all have their drawbacks and benefits, but some can be more effective than others depending on your needs.
Autocratic Management Style
When you think of management, an autocratic style is typically the most basic. This is a top-down approach where the manager makes all of the workplace decisions, no questions asked. Communications flow only in one direction: from manager, to lower-level manager, to employee. This order is never changed. Roles are clearly defined, and the manager’s word is law.
This approach is one of the most common, though, in the world of startups, it can be considered a little out-dated. Still, it’s one of the best ways to manage new, inexperienced workers, unskilled workers, or workers who are unmotivated – especially because their roles and expectations are clearly defined. It leaves little room for error, however, it may not be the best option to foster collaboration and can lead to micromanagement, which drives away top talent and can create a toxic workplace.
An autocratic management style can slow down the decision-making process because, often, lower-level employees are the ones to find issues, but they have no power to actually resolve them. Answers must be decided upon in a hierarchical manner, which means there’s a lot of red tape. It can also isolate more creative, independent, and skilled workers who don’t need as much supervision. It’s also a lot of work when dealing with complex projects.
Transactional Management Style
A transaction management style hinges on rewards. It’s a simple, tried and true concept not so different than dangling a carrot in front of a rabbit on a treadmill – except if the rabbit runs fast enough, they’ll actually get to have the carrot. In an office setting, this manifests as positive rewards like stock options and bonuses to improve worker performance and incentivize them to increase productivity.
This management style is ideal for short-term periods. Think: a specific project timeline that requires workers to work overtime for a few weeks or a seasonal rush. Research has shown that this strategy does not work long term, so if you’re expecting workers to increase their workload indefinitely, you should opt for a different style. This strategy isn’t known to foster innovation either. It’s best used to get a specific project done when there’s already a clear path to success.
Visionary Management Style
Unlike an autocratic management style, a manager using a visionary management style does not monitor the day-to-day details of their team. Instead, they focus on the bigger picture and aim to motivate their team while preserving the overall vision of the project. Team members are trusted to handle the details, which works well if your team is motivated and skilled. It doesn’t work so well if you’re dealing with unmotivated or new workers who may lack confidence in their own decision making or simply not care about the project at hand.
Visionary management styles rely heavily on personality. It’s an ideal fit for an extrovert with a high level of emotional intelligence. You do, after all, need to know how to stoke motivation, even in the face of adversity, but introverts may struggle to lead with the same type of charisma required. Since you’re trusting your employees rather than managing their day-to-day operations, it also requires a fair amount of willingness to take risks. If you’ve got a great team, that shouldn’t be a problem.
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Mentorship Management Style
Mentorship or servant leadership is just what it sounds like. The manager is the one serving employees. With this kind of management style, a manager will take on the role of coach or advisor rather than an authoritarian leader. It’s known to strengthen the bond of a team, foster collaboration, and stoke motivation.
The thing about servant leadership is that it requires managers to be absolute experts at both their job and their employees’ jobs. In other words: they must be highly skilled, and that’s not easy to find. Managers must also have strong interpersonal skills to build rapport and foster an immense sense of trust, which takes a ton of time. Remember: you’re not disciplining people for mistakes. You’re helping them grow, which also means it won’t be effective if an employee is unmotivated and doesn’t care about advancing in their career.
This strategy is best used to foster innovation, complete long term goals, and improve productivity, but it’s not necessarily most effective for teams that are developing physical products or dealing with customer service.
Democratic Management Style
Democratic management styles can feel like a free-for-all to managers who are used to dealing with things in an autocratic way, but sometimes it’s true what they say. Two heads really are better than one. This type of position gives all employees a say regardless of position, title, role, or experience level. Of course, the manager still has the final say, but the approach is collaborative.
This style is great when it comes to innovation, especially because management may have blind spots about the details of a project if they’re focused on the overall big picture. Lower-level employees are way more in-tune with the nitty-gritty. This approach makes those workers feel valued and encourages more effective problem-solving and innovation. Still, inexperienced workers may get frustrated if their ideas aren’t taken into account.
Laissez-Faire Management Style
This type of management style is the one with the least amount of oversight. Teams essentially run themselves and only get assistance from a manager if something goes wrong. Needless to say, this type of style can go horribly wrong if a team is unskilled or inexperienced. If a team is highly skilled, it can increase productivity and job satisfaction. Less red tape means employees can just run with it as long as they hit their marks.
This article was written for us by Ryan Gould, the Vice President of Strategy and Marketing Services at Elevation Marketing.
