There have been several research on the kinds of leadership in start-up firms. A result of this brainstorming has evolved a term “Entrepreneurial Leadership” which encompasses the concepts of entrepreneurship and leadership. For every entrepreneurial venture the kind of leadership and theories associated cannot be generalized. Most of the start-ups see failures due to proper leadership behaviour. The foundation and progression of any new venture is essentially connected. Bass and Stogdill have coined very sensibly.
Leadership is an interaction between two or more members of a group that often involves a structuring or restructuring of the situation and the perceptions and expectations of members . Leadership occurs when one group member modifies the motivation or competencies of others in the group. Any member of the group can exhibit some amount of leadership
Entrepreneurial Leadership:-
It describes a person influencing and directing another person towards a certain action or way of thinking in the context of a start-up.
If we drill down into literature, authors have not specifically spoken about entrepreneurial leadership, but they have emphasized more on the Management based on the operations of any organization. Essentially the leadership depends on various variables like size of the organization, processes, structure, scope, networks, distribution channels, mode of operations and the size of investment at various time periods. Generally, to resolve the queries pertaining to these factors situational theories of leadership play very important role and sometimes contingent theory also justifies it. Delegation, support, coach and direct can guide employees at various scenarios and to certain extent evolve as a good technique for development of the firm. But entrepreneurial leadership describes a person influencing and directing another person. Towards a certain action or way of thinking in the context of the entrepreneurial venture. Transformational, transactional, and laissez-faire Management are mostly talk of the towns in context to start-ups.
Hence, these leaders transform people associated with them for the development of the organization. Transformational leaders explore new ways of working, seek opportunities in the face of risk. Prefer effective answers to efficient answers and are less likely to support the status quo.
Transactional leadership :-
It is characterized by contingent reward and management by exception. In other words, a leader clarifies and communicates to the follower what is expected and what they will receive if these expectations are met. It’s considered to be receivables for the expectations of the workers.
Laissez-faire leadership :-
It is also known as delegative leadership, is a type of Management style in which leaders are hands-off and allow group members to make the decisions. Not all organizations are suitable for laissez-faire leaders. This style is most effective when leader supervises team of highly skilled individuals. In many cases, team members will have a higher level of skill than leader or diversified in which leader has no idea in. For start-ups if the team is highly skilled and small in size than this type of leadership can work really well. If the team size is big than the delegation may result into loosing chain of command. It needs to be chosen carefully.
Goleman Daniel has described six types of Management style in Harvard Business Review which can get results based on different kind of situations and these might work well in case of start-ups.
· Commanding- It demands immediate compliance
· Visionary- Mobilize people towards a relevant vision
· Affiliative- It creates harmony and builds emotional bonds
· Democratic- It forges consensus through participation.
· Pacesetting-It sets high standards for performance
· Coaching- It develops people for future
These styles can be opted at various situations and circumstances for a firm. It depends upon various factors for a leader to use it accordingly.
Leadership can make it or break it all, as the entire value system percolates down from the top. So, its important to identify the style and type of leadership a start-up opts for.
References: Sage Publications, Harvard Business Review