Given the fundamental differences between a startup and a mature company, it stands to reason that different styles of leadership perform best in each type of organization. While some leadership skills, such as communication, organization, and strategy are broad enough to be considered universal, the challenges and opportunities inherent in each level of business growth make for radically diverse working environments that must be taken into account by the leader.
The biggest challenge of startup leadership is change. While any company must ultimately make provisions for shifts in technology, competition, and market landscape, startups must contend with rapid expansion and the agility to shift operational and organizational aspects of a business to match. Many startups are created in response to a demand in a specific market, aiming to meet a consumer need. Leaders in such organizations are forced to constantly monitor adoption rates and adjust depending on consumer feedback as needed. At an established company, the pace of growth may be much slower. While it still falls to leadership to set a strategic direction based on research, change in many industries is incremental and less disruptive.
In a similar vein, startup leaders need to adopt a growth mindset to avoid complacency and constantly move their company forward. For that matter, it’s important that they focus on their own personal growth—while a recent college graduate couldn’t become the CEO of an established company, they could certainly become the CEO of a startup, with new responsibilities suddenly thrust upon them. While traditional corporate leadership is frequently compared to the climbing of a ladder, startup leadership is more akin to a rocket launch—fast and with a plethora of things that could go wrong.
As such, it’s important that an aspiring startup leader is receptive to feedback from employees and stakeholders, particularly if they have little previous leadership experience. Startups, as smaller organizations, have the luxury of being better-connected, with easier input from members of the company. Conversely, traditional companies may adopt an attitude of “what I say goes.” That’s not to say that this approach is strictly necessary for these companies—the ideals of leadership have changed over the years, and employees increasingly expect their leaders to be willing to listen to outside opinions and solicit feedback.
All of this contributes to startups adopting a more “person-centric” approach, where each employee is a valuable contributor and not lost in a sea of cubicles and corporate procedures. However, startup leaders can often face decision paralysis in the face of so many opinions, and adopting a purely democratic approach can often lead to pitfalls. While leaders in startups and corporations require diverse mindsets and skills to succeed, each type has something to learn from the other.
Corporate leaders should strive to adopt their own growth mindsets and put their efforts toward developing their teams and learning to find viable feedback channels for employee use. Startup leaders should learn when to put their foot down and find ways to be realistic about their own expectations and those of their employees. Overall, both approaches have their place in the world of business, but the best often depends on the culture and growth trajectory of a company.