Leadership for Entrepreneurs
Leadership in business is the capacity of a company's management to set and achieve challenging goals, take fast and decisive action when needed, outperform the competition.
What is Leadership?
Leadership in business is the capacity of a company's management to set and achieve challenging goals, take fast and decisive action when needed, outperform the competition, and inspire others to perform at the highest level they can. Individuals with strong leadership skills in the business world often rise to executive positions such as CEO (chief executive officer), COO (chief operating officer), CFO (chief financial officer), president, and chairman.
Leadership is the art of motivating a group of people to act toward achieving a common purpose. In a business setting, this can mean directing workers and colleagues with a strategy to meet the company's needs.
Here's what you need to know about leadership, and some examples of how it can benefit businesses.
Types of Leadership
Finding an effective leadership style that works best for you and your team may bring your business one step closer to success.
Being an effective leader is one essential part of running a successful business. But there isn’t just one right way to be a great leader. You can choose and develop a leadership style that works for you, your team and your business goals.
Democratic leaders include their team members in their decision-making process. While they are ultimately responsible for making final decisions, they often ask team members what they think and try to take their thoughts and opinions into account. This can help increase engagement among team members, but it may not always be the best style for leaders who need to make quick decisions.
On the other end of the effective leadership styles spectrum, autocratic leaders make all decisions on their own without consulting with team members. This can be a good system for making quick decisions. However, it can make team members feel out of touch or dissatisfied with their working environment if they don’t feel like their opinions or ideas are ever considered in those important decisions.
Leaders who practice the laissez-faire leadership style are known for giving their team members a lot of freedom. They provide support and resources for team members when it’s necessary, but they don’t constantly micromanage employees. This can be an effective leadership style if you have a lot of trust among your team members and you know that they do good work and manage their time well on their own. However, if you’re working with newer team members or those who need more guidance or time-management help, it may not be as effective.
How Does Leadership Work?
Effective leadership includes exhibiting a strong character. Leaders exhibit honesty, integrity, trustworthiness, and ethics. Leaders act in line with how they speak and earn the right to be responsible for others’ success in the company.
Strong leadership involves clear communication skills. Leaders speak with and listen to staff members, respond to questions and concerns, and are empathetic. Leaders use effective communication skills for moving the company forward and achieving new levels of success.
While there are people who seem to be naturally endowed with more leadership abilities than others, anyone can learn to become a leader by improving particular skills. History is full of people who, while having no previous leadership experience, have stepped to the fore in crises and persuaded others to follow their suggested course of action. They possessed traits and qualities that helped them to step into roles of leadership.
An Example of Leadership: General Electric
Jack Welch exhibited leadership as chief executive officer (CEO) of General Electric Co. from 1981 to 2001. He played an integral part in 600 acquisitions in emerging markets and increased GE’s market value from $12 billion to $505 billion at the time of his retirement. Because the world is constantly changing, Welch insisted everyone at GE embrace change. To continue evolving company operations and producing greater output, managers and employees had to continuously reinvent themselves and their work.
Welch hired managers who shared his vision of GE, had endless amounts of energy and were able to encourage employees to stay engaged in their work. He sought managers who created, developed and refined ideas for the future and found ways to make them a reality. He also insisted that managers work side-by-side with employees as a way of understanding what they were doing and why.
As a result of Welch’s leadership style, managers and employees were more empowered, products gained higher quality, and customer satisfaction and profits increased dramatically.
Importance of Leadership
Business leadership is important because it touches both the internal and the external stakeholders within the industry and beyond. Here are a few reasons why good leadership is important:
Ensuring the Business Maintains its Vision. A business leader needs to always be on their toes and alert in order to ensure that the organization has a vision and stays on course towards the achievement of that vision. This is because, in the course of everyday ebbs and flows in an organization, the employees and the organization as a whole may at some point lose track of the big picture.
Inspiring Morale. It has been said in some quarters that an organization without a leader is like an army without a general. A business leader’s position is to inspire morale among the organization’s employees. This makes the employees work harder and they have their eyes on the prize.
Ensuring the Employees are Motivated. It is the duty of the business leadership to motivate the employees materially and otherwise. The formulation and implementation of motivational reward systems are the purviews of organizational leadership. This is in line with giving credit where it is due. If an employee has done very well and they need to be rewarded, organizational leadership needs to follow up. This helps to increase motivation within the company.
Encouraging Continuous Learning. A good business leader will go out of their way to ensure that their employees learn more. The more the employees learn, the better they deliver, and the better people they become. It may mean better remuneration for the employees. But even if they do not they get opportunities elsewhere, they may also be promoted in the same company.
It is in a good business leader’s interest to ensure that their employees have many learning opportunities in order to improve not only with productivity and delivery but also in being better employees overall.
Leadership in Business
An example of leadership found in business can be NEXEA’s Entrepreneurs Programme (EP) offers a strong entrepreneurs network. It is Malaysia's exclusive peer network for top tech entrepreneurs to learn & grow together. Entrepreneurs are lead and guided by some of the best startup mentors & investors. They share the power of strong networks with young entrepreneurs out there. This program not only nourishes startups but also guides their founders and entrepreneurs into leadership skills, mentoring and nurturing their startups.
All entrepreneurs go through huge challenges in management, growth, expansion, getting investments, and exits. NEXEA’s EP brings them together in this platform to ensure stronger growth, together under the leadership and guidance of their experienced mentors. According to their website, this programme is created by entrepreneurs, for entrepreneurs. The Entrepreneurs Programme is a large group of technology startups and the CEOs of these groups that want to learn & grow together. This programme only works with strong entrepreneurs, guided by strong mentors. This is why they curate the members that join, to ensure everyone can benefit, learn and grow together in a powerful environment to succeed.
Leadership vs. Management
The terms leadership and management tend to be used interchangeably, but they're not the same. Leadership requires traits that extend beyond management duties. Both leaders and managers have to manage the resources at their disposal, but true leadership requires more. For example, managers may or may not be described as inspiring by the people working under them, but a leader must inspire those who follow them.
Another difference between leaders and managers is that leaders emphasize innovation above all else. Whereas a manager seeks to inspire their team to meet goals while following company rules, a leader may be more concerned with setting and achieving lofty goals—even at the expense of existing corporate structures. When a worker has a radical new idea for how to tackle an issue, a leader is likely to encourage that person to pursue the idea.
Managers may be more likely to preserve existing structures because they themselves operate within that structure. They may have bosses above them, so they have less freedom to break rules in the pursuit of lofty goals. Leaders, on the other hand, often operate fairly independently. That allows them to tolerate a greater amount of chaos, so long as they believe it will be worth it in the end.
However, the leader's devotion to innovation can sometimes come at a cost. Chaos and high-pressure work environments can create interpersonal issues. When such issues arise, a manager is more likely to see it as their duty to smooth over problems between employees. Leaders can sometimes be so singularly focused on achieving lofty goals that they let interpersonal issues and employee welfare fall to the wayside.