Leadership best practice

In this article I aim to provide some good tips on effective leadership when scaling a business. 

My belief is that great leadership is about building willing followers, and getting the team on board in the collective quest to drive business growth. It's also today very much about about collaboration, engagement, and creating a positive work environment.

Most importantly it is about contionuously developing yourself on the journey ot be an even greater leader.  Finding time to engage externally and learn from diverse others, both people like you on a similar journey in a similar situation and more importantly diverse leaders with difference attitudes, experiences and ideas.

As someone with an MBA with a first class honours degree I'm proud to say the people who taught me most about business were those who left school at sixteen with no qualifications. Likewise as a corporate emplopyed Managing Director with 500 staff I learnt most from the entrepreneurial owner manager with 20 staff.

So keep on learning about leadership through the university of life. If you can help others avoid a dead-end you've discovered the hard way you'll be saving them time and money.  And they are likely to return the favour by helping you learn from their mistakes because none of us is perfect.  Likewise our successes.  Shaing what works is helpful too!

Efficient leadership is essential for the success of any organisation. A competent leader can inspire and motivate their team to attain their objectives while also promoting a positive work culture and driving growth. However, being a good leader is not an inherent trait that one is born with; it requires practice, discipline, and a willingness to learn and improve. In this blog, MD2MD explore some of the key good leadership practices, providing insights and tips to help you develop your own leadership style and become a respected and effective leader in your field.

A great leader creates willing followers 

A huge question for entrepreneurs is “how can I scale my business and accommodate growth?”. There is no easy answer to this question. Most businesses struggle with scalability. However, scaling doesn’t need to be so daunting, and one way to kick-start the growth of your business is by developing your leadership

Strong leadership is the foundation for a successful and healthy long-term business. Building your leadership development strategy effectively can be the driving force for an organisation to effectively achieve its goals. A strong leader will run a business that can accelerate growth and innovation, develop market agility, and earn more revenue. It is a no-brainer. 

Developing strong leadership is also not a one-off quick fix. It requires continuous learning. We can always do better, we can always improve, and we can always grow. The best leaders are those with hunger to grow and learn. Leadership is also not a simple process. It requires dealing with complex situations and people that cannot always be addressed simply. There is no one-size-fits-all solution. 

To help you learn more about leadership when scaling up in a business, we’ve listed all the information you need, including recent trends in leadership, different leadership styles, the common mistakes to avoid, and tips to help you on your way to being the best leader you can be.

Patterns in leadership

Things change all the time. It is important to adapt but actually many leadership behavours are common across the ages as well as across sectors and geographies:

1. Accountability is key

The problem of accountability is centred around having competent and effective leaders. Structures ensuring that the lines of accountability are clear are essential. How are jobs delegated, and what are the clear expectations? Once this is outlined, let them get on with it. 

Overruling their decision-making brings the accountability of that area back to yourself. Whilst it is important to know when to step back, good managers should have some degree of influence. Overall, as a leader, it is super important to lead the way by holding yourself and those on your team to account with your core set of values in mind.

2. Embrace continuing education

Businesses now need to be able to pivot and adapt to fast changing trends. You can prevent yourself from this headache by ensuring employees have training to cope with new technologies, regulations, global interconnections and ways of working. 

Learning provides a competitive advantage and ensures business agility. Furthermore, according to Forbes, taking a vested interest in employees and their development helps them thrive not only at work, but in all areas of their lives. This in turn creates more engagement, productivity and happier employees!

3. Employee engagement is important

Generation X and Y value collaborative workplaces, so leadership empathy will skyrocket in coming years. The ability to understand and be sensitive to employees and key stakeholders is also key, especially as companies now work with a more varied workforce. We are now seeing greater emphasis on soft skills, emotional intelligence and listening to drive effective leadership. 

4. Effective leaders are conscious of their impact 

One of the most important values for leaders is an appreciation for sustainability. In fact, a report by PWC highlighted this as one of the most important trends in leadership. This means demonstrating social responsibility for the greater good. It is much more than just environmental impacts, but also health and safety. A “conscious” and self-aware organisation will be a draw for the best talent in the world.

Leadership styles

A “leadership style” is a leader’s characteristics when guiding, motivating, and directing a group of people, including the implicit and explicit actions the leader performs. There are many theories about leadership styles. One fundamental theory was present by Kurt Lewin, who led a research study in 1939 and identified three key leadership styles:

Authoritarian or autocratic: The leader tells their employees what to do and how to do it, without their input. This style is only best when decisions need to be made very rapidly and decisively. However, it can create a hostile work environment if employed for the long-haul.

Participative or democratic: The leader includes their employees in decision-making, but will typically make the final call. Lewin argues that this is the most effective style of leadership, because workers feel engaged and motivated.

Delegative or laissez-faire: The leader allows the employees to make the decisions, but takes responsibility for the outcome. Whilst this could be useful in situations with highly qualified experts, it can create little or no direction.

This study is extremely influential, and acted as a foundation for further models and theories of leadership styles. However, as you’d imagine, it isn’t the only set of theories. 

The power of the leader

Other studies focus on the sources power used by leaders. This is useful because your ability to lead is influenced by why people follow you. Some studies suggest there are three sources of power that are common in business leadership:

1. Hierarchical power

The closer to the top you are, the more power you are perceived to have. Power in this structure means that you have the ability to give orders directed downwards in the organisation. The greatest strength of hierarchy was that it maintained the status quo, which worked decades ago. But times have changed. 

Leaders want to lead in a different way and organisations around the globe are looking for alternatives. There are many challenges in hierarchy that organisations now want to avoid: innovation halts, collaboration ceases and engagement suffers. This type of environment has several layers of bureaucracy, can be extremely sluggish and has no focus on employee experience. 

2. Expert power

You can earn the respect and influence independently from hierarchies within your organisation, because you have a recognised talent, knowledge, and ability. For example, accountants, IT specialists and lawyers have power because of their expertise. 

To be granted expert power, followers must believe that you are a credible, relevant and a trustworthy expert. The key is knowing the ‘ins and outs’ of your job. Cross-training is a great way to boost expert power so you get to know the job of others as well.  

3. Respect Power

No form of power is more influential than respect. We gain this form of power when others trust us and have respect for how we deal with situations. When employees respect their leader, or anyone else in the business for that matter, they are more engaged, more devoted to the organisation and their role. Respect power can take time to develop. It requires great patience for the respect and trust to be earned. Once it is earned, it has the potential to positively impact people’s lives and empower them. 

It’s not a formal type of power, but a personal one. Respect power is bestowed upon the leader by their followers, naturally. This type of power is increasingly important as growing organisations seek greater collaboration, engagement, and innovation. 

Although hierarchical power has typically been the norm, leading with respect power should be the goal because it creates accountable, engaged and importantly willing employees. 

Having a positive influence over others is the most valuable form of power, and there is no greater compliment than being told you lead in this way. 

Bad Leadership Practices

There are plenty of tips out there on how to improve your leadership, strive for respect power, and generate willing followers. However, there are still some common pitfalls obstructing the ability of businesses to fully maximise the potential of any leadership development. 

It is extremely important to outline these mistakes, so you don’t make them.

Mistake #1: Not developing a clear communication plan 

Insufficient communication is a leading mistake when trying to scale up and move employees through change. Organisations that are transparent before, during, and after change have a more accepting and informed workforce. A clear communication plan should be developed, maintained, and updated.

Mistake #2: Focusing too much on overall strategy

It is important to focus on both the big picture and the small picture. A good leader will also keep an eye on day-to-day tasks. It is different from micromanaging, and simply means that the everyday running is not mishandled or misunderstood.

Check in with the team regularly, answer any questions they have and provide constructive feedback. Stay aware, naturally.

Mistake #3: Neglecting outside training

Much of a leader’s value is providing opportunities for growth, development and on-the-job training. Opportunities for valuable outside training and sources should not be overlooked. An effective leader continually looks for ways to grow and positively impact and motivate the team.

Training is not only beneficial for the individual, but for the organisation as a whole.

Mistake #4: Delegating badly

This mistake takes on two forms. Firstly, not delegating at all, lacking trust in your team and controlling all aspects of your business. This could also lead to micromanaging, which ultimately can discourage creativity, turn off initiative and disengage the team. It is important to remind yourself to let them do their job. Secondly, is a leader that gives out tasks without properly considering the team and their strengths.

Remember, being a leader is about effective delegation!

Mistake #5: Tinkering the strategy at the top

Continually changing the core strategy and following the latest trends for growth can be detrimental. It could cause your team not to trust you, losing their respect and confidence. It is better to stick to core competencies, be persistent and make changes with care. 

Leadership tips when growing a business

Understanding how to be a great leader means understanding how to create willing followers. This means getting to know what drives people. There are some reasons why people follow a leader, whether it is for less-inspiring tangible reward like getting paid, or emotional reward such as personal fulfilment. 

In any case, the best leaders are positive, encouraging and enthusiastic. They motivate the team, recognise and appreciate their contributions, and create a sense of achievement and purpose in the workplace. Ultimately, this makes people willing to follow positively.

These are some of our tips for good leadership practices:

Tip 1: Empower those around you

An effective leader is team-oriented and shares their successes with those around them. Work on the development and training of your team. They will value you more for it.

Tip 2: Read and learn

Leaders are readers. Natural curiosity to learn and grow can help you on your way to lead your business and help it grow. Larry Page, the CEO of Google, when asked how to run a company said: “I read a lot”. 

Tip 3: Be aware of the way you act – walk the walk, and talk the talk

A good leader leads by example. If you want a positive, hardworking work culture, work in this way – practice what you preach. Be willing to overcome obstacles and take responsibility with an air of confidence. Doing these things will help you earn the respect of your employees and stakeholders. 

Tip 4: Hire the right people

Easier said than done, of course. The people you hire can make or break the organisation. Every person should align with your company and its culture. Effective recruitment is paramount; and must be done with strategic context about the present position and future growth of the business. 

Tip 5: Avoid micromanaging and trust your team

We already discussed that bad delegation and falling for micromanagement can be very detrimental to your work environment, team happiness, and business growth. 

Tip 6: Focus on the mission

Fuse yourself with the company mission, help others to succeed, and believe in your employees. Weave the mission and values into the everyday fabric of the organisation, and get your employees on board. This also includes knowing your niche in great detail and understanding when to say no to things that are not going to help the business achieve its growth goals.

Tip 7: Have a plan 

It’s obvious, but many leaders fall short here. Create a simple strategy with goals for each quarter and year, and broader targets for a few years down the line. Communicating a clear transparent strategy gives your team an understanding of what you are all working towards. 

Tip 8: Take no shortcuts in scaling; they don’t exist

There is no greater way to harm your business than to cut corners. Taking shortcuts makes compromises. It compromises your ethics, values and can misalign you from your mission. The path to success is long, with many ups and downs. But ultimately, you need to do the job properly, consistently… and legally!

Leading in different industries 

There is no perfect blueprint for how to run a business. Each organisation and industry is different. What we do know is that leading through respect power and engaging your willing followers is preferred route.

The Center for Creative Leadership conducted a trend report, and discovered that in the six biggest industries (pharmaceuticals, healthcare, tech, finance, energy and government), most leaders share the same beliefs over which competencies make a successful business. 

These include building collaborative relationships, taking initiative, and participative management. These can all be achieved through, and are part of, respect power. Although functional skills and know-how is incredibly important, in all industries, high level leadership can be achieved through developing skills centred around people skills that motivate the team.