There are a number of reasons why startups must carefully consider their leadership style: the right leadership style can help employees and stakeholders thrive on change; it can encourage an open and learning culture; and most of all, it can help you to retain your best people.
But loose leadership isn’t the same as “laissez faire.” Rather, it’s a high-investment strategy that includes capacity building, risk management, and effective communication to succeed. Loose leadership is really about unlocking the leader in everyone in your organisation.
By now, the alarm bells are probably starting to ring. Why would you want a whole team of leaders, all potentially pulling in their own direction, when you’re trying to get your vision off the ground? Done right, loose leadership addresses all of the challenges outlined above – challenges that are particularly pressing for startups.
Share the responsibility
A number of studies have looked at “Participative Decision Making” (PDM) and, while loose leadership is about more than shared decision making, these findings hold for loose practices. When people at all levels of the organisation have substantial influence, research shows that productivity rises, members of the organisation are more satisfied in their roles and, perhaps most importantly for startups, people in these sorts of organisations are more likely to embrace change.
If every member of the team is developing their own leadership abilities, you also get better, faster decision-making. However, to make the most of this you need to have excellent communications: you have to be sure that everyone in your team understands the ultimate goal of your startup. This requires an open and comprehensive communication stream, which becomes more challenging as your organisation starts to grow. In our experience, once you pass beyond the initial configuration of the founding team, communication can already become an issue that you have to address. For first time founders, this can often come as a surprise and can develop into an organizational bottleneck.
Lean and movable structures
Not everyone in your organisation has the knowledge or experience to get every decision right so you need to ensure that you have created what educational theorists call “scaffolding.” You create structures that prevent people from making irrecoverable mistakes. This has to take the form of some bureaucracy, unfortunately, so you might instigate rules about who can sign off purchases over a certain amount (or when changes are pushed live servers!). But a little scaffolding can allow your team to make a lot of good decisions, rather than coming to you for approval.
You also need to accept that mistakes will happen (and that you might make some of them). When they do, focus on learning rather than blame. That way you’ll not only foster openness from your staff, you’ll also learn lessons as an organisation. You might want to incorporate some of the ideas of Scrum meetings to make this process more effective.
Loose leadership, don’t lose people
Perhaps the most important benefit that you’ll reap is the ability to keep good people in your organisation. “Everybody thinks people quit over money and, yeah, there’s times they do, but that’s always the stated reason why somebody quit: you know, ‘I got more money elsewhere’ or ‘I got a promotion’ or something,” Robert Kaplan, Professor of Management Practice at Harvard Business School told input/output blog. “[But] I believe the reason most people quit is because they’re not learning and they’re not developing and they don’t see upward mobility and opportunity … the biggest cost I find of not developing successors is you lose good people.”
Michael Abrashoff, former Captain of the USS Benfold, recognised as much when he accepted his commission. “As the new captain of USS Benfold, I read some exit surveys, interviews conducted to find out why people are leaving. I assumed that low pay would be the first reason, but in fact it was fifth. The top reason was not being treated with respect or dignity; second was being prevented from making an impact on the organization; third, not being listened to; and fourth, not being rewarded with more responsibility… Further research disclosed an unexpected parallel with civilian life. Low pay is also the fifth reason why private sector employees jump from one company to another. And the top four reasons are virtually the same as in the military,” he wrote, in his book It’s Your Ship, delightfully subtitled Management Techniques from the Best Damn Ship in the Navy.
Stand by the crew
Giving everyone ownership of decisions and involving them in setting the direction of the company certainly offers benefits, but how can you ensure that your crew doesn’t steer you off course? A 2002 study in the journal of Organisational Behaviour concluded that “managers can improve workers’ attitudes by providing them with a clear sense of direction (or vision) and by encouraging more opportunities for employee initiatives, autonomy, and participation”
Abrashoff again: “Empowering means defining the parameters in which people are allowed to operate, and then setting them free. But, how free was free? What were the limits? I chose my line in the sand. Whenever the consequences of a decision had the potential to kill or injure someone, waste taxpayer’s money, or damage the ship, I had to be consulted. Short of those contingencies, the crew was authorised to make their own decisions… I would stand by them…The more responsibility they were given, the more they learned.”