Techniques for Effective Leadership in Startups

To shed light on the nuanced strategies that drive startup triumphs, we’ve tapped into the wisdom of seasoned entrepreneurs and industry trailblazers. Their firsthand insights unveil a tapestry of techniques, each finely tuned to the unique challenges and opportunities that define the startup journey. From creating a culture of empowerment to embracing failure as a catalyst for growth, join us as we explore the techniques that fuel effective leadership.

Understanding What Type of Leadership Your Team Needs

There are generally six leadership styles that are considered the standards:

• Authoritarian
• Democratic
• Visionary
• Laissez-Faire
• Pacesetting
• Coaching

None of these work effectively all of the time. What does work is situational leadership. In the real world, there is no “one size fits all” leadership style that works all of the time. A leader/entrepreneur who adapts their style of leadership to the constantly changing circumstances at the moment is applying situational leadership. Sometimes, you need to lead through a vision you share with the team; other times, you require immediate action. You need both situational awareness and an understanding of who is on your team as well as what strengths and weaknesses they have. You can then choose the particular leadership style you need for that point in time. This is what is most effective.

Daniel Feiman, MBA, CMC®, managing director at Build It Backwards^SM

Knowing Your Team’s Strengths & Weaknesses

One of the biggest obstacles for startups is the absence of any track record/history of people working together. Sure, some people may have worked together in previous organisations but how will they work together in this startup with limited resources and slim margins for error?

Using behavioural profiling, you can quickly and comprehensively understand an individual, a work pair, or even a team in minutes that would otherwise only be developed over long periods of time. This maximises the prospects for success of the startup.

For an individual, you can quickly ascertain things like personal motivating factors, demotivating factors, areas for development, how they work in a team, fears, communication preferences, and more.

For a pair or small group working closely together, you can identify each other’s strengths and weaknesses, thereby avoiding unnecessary conflict or confusion.

How would you know if your new team was homogeneous, heterogeneous, or diverted? And why would that matter?

In a homogeneous team, members have similar traits & attributes. The strength is in communication. They have the advantage of cohesion and enjoy high productivity and goal accomplishment. However, a downside is that excessive cohesion can turn into groupthink, and flexibility may suffer.

With heterogeneous teams, members have a more diverse orientation, and agreement may be difficult. The upside is in situations where creativity is important and a greater likelihood of innovative solutions. Whilst the strength lies in the division of labour the challenge remains communication.

For diverted teams, members are made up of opposite traits and attributes. Agreements can be conflicting based on sub-team vs. sub-team. When sub-teams form, there’s a risk of losing cohesion. However, delegation is strong, so member’s individual strengths can be utilized.

So, to ensure success early on, effective leadership is critical. Startup leaders need to have a much deeper understanding of the individuals and the team. Avoid going in blind!

Steve Gregory, executive director & CEO of Black Bull Performance Group

Hands-on Leadership

In my own experience as a startup founder, what I’ve found to be effective in terms of leadership is having a really hands-on approach. Working for a startup often requires a bit more energy, time, and effort than other jobs. So, those working for startups don’t want to feel like they are doing all of the work while their leaders are nowhere to be found, as the assumption might be that they aren’t working as hard or appreciating all that their employees are doing. Leaders who, on the other hand, are physically present and working with their team are far more likely to gain respect, build rapport, and help curate an engaged team. It sets a better tone for the company moving forward.

Jeremy Yamaguchi, CEO of Lawn Love

Flexible and Inspirational Leadership

Personally, I have found that a more flexible and inspirational leadership style tends to work best for startups. Some of the best innovations in my own company have come from encouraging creativity and communication with staff — I think this type of open exchange is essential, especially in a new company. A very authoritarian or restrictive leadership style will tend to inflict a more suppressed and fearful work culture, which I have only seen result in startups that fail to thrive after a few months.

David Kemmerer, co-founder & CEO of CoinLedger

Encouraging Input

One tip that I have for effective leadership in a startup is fostering collaboration/input. Certain places and situations call for more autocratic-style leadership, but startups are not one of them. Working for a startup is inherently a bit of a risk, and in life, when people are dealing with risk, something that usually helps them to feel more at ease is finding ways to feel in control. So, as a leader at a startup, if you encourage collaboration/input, especially where important decisions are concerned, you give your employees the ability to have greater control over the outcome of the business. When employees have that stake, they are going to be more invested in ensuring that the company succeeds, so it’s a win-win.

Seamus Nally, CEO of TurboTenant

Investing in People’s Growth

Startups have a lot to offer, but when it comes to stability, money, and work-life balance, we often can’t compete with larger and more established companies. The recipe for success to still attract and retain top talent is in investing in people’s growth, the ultimate creator of stickiness. People are driven by staying ahead and moving up. It’s this kind of career progress that makes them feel spending their precious time with any company makes sense.

As a leader, it’s therefore important to over-invest in their growth by:

1) Understanding people deeply from preboarding all the way through the end of their time with you: who are they, what do they really want to achieve in the next years, and how does that connect with your startup’s vision & mission

2) Constantly activating these insights: in the day-to-day work, in the way you let them shadow you and work with highly senior people that they wouldn’t have access to in a big corp, and the actual learning & development opportunities like training and presenting, how does this constantly make them feel that there is no opportunity like being at your startup for achieving their goals

3) Continuously listening and optimizing: this should be second nature for most startup leaders, but collect data through one-on-ones and surveys to always know whether you’re at risk of losing someone and the reason why, and put measures into place to avoid this.

Daan van Rossum, CEO of FlexOS

Having Contagious Resilience

Startup leaders have to be resilient to weather the storms that come with launching a business. However, that resiliency will only take you so far if you don’t use it as an example for your team. A positive, solution-focused mindset can easily become contagious if a startup leader is vocal about their point of view. Contagious resiliency is also an excellent cornerstone for any business’s workplace culture, so this example will serve you well beyond the startup stage.

Jake Hill, CEO of DebtHammer

Communication & Feedback

Conflicts arise when expectations differ. Startup life is fast and furious (and fun and exciting) so it’s that much more important to deliver expectations with clear, consistent, and continuous communication and follow-up feedback on deliverables. This applies to teams, clients, and co-founders. Since startup life is also quick to pivot, establishing a cadence to communicate strategy team-wide, or the “Why,” eliminates confusion and frustration before it begins. Finally, reverse diagnosis of conflicts (which are inevitable) is a self-serving opportunity to trace in hindsight one’s opportunities for improvement. Priceless.

Felicite Moorman, co-founder & CEO of BOSS.Tech

Empathetic Leadership

Make the effort to develop your empathy. 

Developing empathy as a leader can be challenging because leaders often focus on high-level, strategic aspects of the business, which can create a disconnect from the day-to-day realities of their team members. It’s easy to overlook the smaller details that directly impact team motivation and morale. 

I’ll give one example of how this worked for us at Ling. 

Attracting top talent to a startup is tough. Startups are seen as high-risk by many potential employees, especially when they have safer or more lucrative offers elsewhere. However, one significant advantage a startup leader can offer is genuine care and concern for the team’s well-being and growth–which we can develop by practicing empathy. This personal touch is something larger companies often can’t provide. If your team sees that you’re sincerely doing your best and genuinely care about them, they’re more likely to share your vision and invest in the growth of the organization–because they know they will ultimately be a part of it. 

Simon Bacher, co-founder & CEO of Ling App

Savings-First Model

In my experience, a powerful leadership technique often overlooked in startups is what I call the savings-first mode, which is based on the principle of conscious resource allocation. 

For a leader, this means prioritizing cost-savings without compromising on value in every decision. When we launched DealA.com, we first looked for ways to operationally save without hampering growth — cost-effective technologies, remote work to save on office costs, and seeking out partnerships to realize cost synergies. 

This approach has improved our bottom line and instilled a sense of financial responsibility among our team. 

Adapting this principle to our customer offering, our platform is dedicated to helping shoppers save online with genuine coupons and discount codes, reinforcing the save-first ethos across all aspects of our business.

Oleg Segal, founder & CEO of DealA

Minimizing Micromanagement

Startup teams are usually very tight-knit, and it is much easier for a leader to have complete control over all business operations. That’s why I encourage new leaders to minimize unnecessary micromanagement.

There’s a fine balance between supervision and autonomy. Excessive oversight can impede productivity and diminish overall team morale. As most startups have very small teams, this can be a huge determining factor in whether or not the startup lasts in the long run.

A good leader lets employees have autonomy and take ownership of their tasks. If you cultivate a culture of trust, you can build a team that will carry your business through all the difficult ups and downs of the startup environment.

Stefan Chekanov, co-founder & CEO of Brosix

Sticking to Your Values

With 15 years of experience in the Leadership Development space and as a founder of a start-up consulting firm, a critical element in leading others as you build your business is being radically clear on what you stand for. Clearly understanding your values and the values of the business you are creating helps you connect to your target audience and future employees. In this post-pandemic labor market, people are looking to connect to meaningful and purposeful work. Consumers also want to purchase from brands that have integrity and are positively impacting the world. 

Understanding the values of yourself as a leader and that of the startup organization will help guide all future decisions and actions. My favorite values exercise is posted online by Carnegie Mellon University. Once you have your Top 5 Core Values, expand on those values to identify the actions, behaviors, and outcomes of living those values. This exercise guides the brand identity and builds trust with consumers and future employees. 

Caitlin Johnson, founder and senior consultant at Bold-Bird Consulting

Staying Adaptable

Startup leaders need to be adaptable because the type of leader needed is going to rapidly change as the start up grows and scales. The leader must have enough self awareness to adjust their leadership style to match the needs of the team. The rapid change that a start up experiences can be difficult for the employees so they need a leader who is able to make the change consumable. In order to inspire your employees to accept change the leader must be willing to do the hard work of not only accepting the change but also relating to the employees and making the change palatable. The team will be looking to their leader to be the champion of change, including modeling good behavior around accepting and adapting to changes.

Katrina Purcell, founder & CEO of Katrina Purcell LLC

Hiring an Assistant

If you don’t have an assistant you ARE the assistant – and your startup will suffer.

Jack Daly, sales training guru, shared this idea with us in a keynote, and it stuck. Three years after hiring and training a virtual assistant, I can see the immense value to our startup and the immense danger of distracting myself with tasks on my “8 ft long hat rack” that I should not be doing. 

Working super productively with a virtual or in-office assistant as a leader requires some practice, a few new skills, and progressive releases of trust to delegate.   

With a ‘global talent pool’ available at your Upwork fingertips, every startup can afford and would be wise to hire an assistant for their leader and other co-founders or senior leaders. 

Greg Nuk, founder of Copper Teams

Embracing Failure

Welcome failure. 

I say this is underrated because, in my experience working with budding entrepreneurs and founders, many young business leaders are either afraid or intolerant of failure. While it’s natural — even necessary — for a leader to be resolute in doing things correctly and successfully, it’s also very crucial to have a gracious outlook towards failure. Why? Because it is an innate part of the growth process.

My advice to leaders is to allow yourself and your team to fail. And at that, to fail often, even to fail hard and fast when the situation requires. That’s not to teach you to settle for mediocrity or to underperform but rather to pair your hard work with the mindset that no failure is final unless you let it defeat you. If you adopt this technique, you stay compassionate to your team when they make mistakes, which they will undoubtedly respect you for. More importantly, you help yourself develop the grit and tenacity required in the startup world.

Zain Jaffer, CEO of Zain Ventures

Being Transparent

One particular area of focus that we believe drives effective leadership in our organization is our culture of transparency. Our CEO, Eric Allen, exemplifies this in many ways, for example:

• He hosts weekly virtual stand-ups, sharing successes and challenges, and everything in-between to make sure we all feel included and connected
• He includes the team in goal setting so we have a 360-degree perspective and alignment 
• He also has all-hands monthly “connection” time during the day to learn about one another and have some sort of team-building game, like trivia

His advocacy for communication and intrapersonal engagement truly keeps us all on the same page and pushes us forward.

Julie Chadbourne, marketing & PR lead at LISNR

Creating and Reiterating Team Values

Most startups are founded because a person or a group of people have a great idea. What they often neglect in this process is the culture of their startup. Particularly as they begin to grow. When utilized effectively, nothing drives culture better than the creation and repeated messaging of team values. Every meeting, every conversation, and most importantly, every decision should be grounded in team values. The constant repetition of those values will keep the team on track and help newbies acclimate in no time.

Michael Sonbert, founder & CEO of Skyrocket Education and Rebel Culture

Servant Leadership

Here are the leadership traits that successful entrepreneurs need to possess —  integrity, decisiveness, good judgment, the ability to form a vision and execute it, confidence in your own competence, etc. But, without the ability to be selfless, to put the needs and wants of others before your own, you will never get people to follow you to a place where they wouldn’t go to by themselves. One other important thing: Practice servant leadership. If you take care of your employees and customers or clients, profits will come. Don’t put profits before people.

Paul A. Dillon, founder of Dillon Consulting Services LLC

Self-Awarenness

The most effective leadership is always able to foster a sense of shared purpose, and you can best accomplish this for your startup through accountability and self-awareness. There is a fear amongst many startup leaders that admitting to a mistake or to not knowing something will somehow diminish their standing with their teams.

However, a startup leader who owns their mistakes, admits to not knowing a subject, or defers to others on their team for their expertise, will not only create a shared sense of purpose but make themselves more approachable. In addition, through showcasing their own accountability they will make it less intimidating for their team to do the same. By practicing self-accountability and awareness, a leader can move towards their goals with their team and not just preach from above it.

Kevin Miller, SEO expert, angel investor & entrepreneur, kevinmiller.com

Having Ability to Admit Your Mistakes

Because of the volatile nature of a startup company, humility is quintessential to a leader’s success. A good leader knows he or she will be wrong in most decisions, and pivots will seemingly happen every week; being able to admit the faults in an idea, absorb new information, and make the decision to take the company in a new direction are extremely important actions. A good founder will put aside ego and do what’s right for the company, which will mean discarding even precious ideas or recognizing weaknesses and taking immediate action to patch these before the company suffers. Peers and subordinates will actually appreciate, not scoff at, a leader who can admit when they’re wrong. This also encourages team members to step up with new, perhaps contradictory information, which balances the company’s leadership and prevents authoritarian or narrow decision-making.

Matthew Schneider, founder & CEO of e-States.com

Trust But Verify

Leading Start-Up businesses can be a hectic challenge. The foundation of leadership for an entrepreneur whose startup that is heading toward success: Trust but verify! The business gains momentum, and it becomes difficult to do it all. You’ll need to bring in help and delegate tasks. Delegation requires trust… and trust requires verification. It’s how you build trust both ways.

Yes, patience and communication are also two very important pieces, but making sure tasks are completed and the business (and customer) is getting what it needs is paramount!

Megan Alarid, strategic business guide & leadership coach at Heightened Leaders