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Let’s Talk: What leadership styles work best for SME owners?

Many small business owners learn leadership skills through hard-fought experience rather than formal training. They begin with a small team of people they know and understand how to support, but more sophisticated leadership skills are required as the workforce grows.

So, what leadership style results in a cohesive, motivated, and loyal workforce, irrespective of size?

Let’s talk…

Vijay Raghvani, Head of Customer Experience at Airwallex

“One of the key challenges for business owners is learning to let go. While it can feel overwhelming to hand over areas of your business to others, delegating can also be rewarding; helping to foster a growth mindset and build a high-performance culture. 

“Therefore, it’s crucial to develop a leadership style that instils trust in your team and empowers employees to make the right decisions. For example, if your focus is driving the business through metrics and data, your team will not only have a clear focus on metric-based outcomes but is also empowered with the authority to deliver and meet objectives.  

“So, how do you develop a leadership style that builds trust? 

  1. Hire character, and train skill
  2. Understand and communicate the variables that drive your business
  3. Empower your team with the tools they need to succeed.”

Danny Lessem, CEO, ELMO

“Staff in small businesses have far more exposure into how their leaders are responding to situations than their peers in larger organisations. This is why it is so important for leaders in small businesses to lead by example and be mindful that their actions and inactions speak volumes when there’s only a small number of employees.

“It’s also important for small business leaders to actively demonstrate the values of teamwork and collaboration. 

“Strong leaders act as anchors in the workplace. With less than half of Australian workers reportedly feeling secure about their jobs, those in management must make every effort to acknowledge people’s hard work and set the tone for the organisation.” 

Mark Collins, CEO, JUMP! Swim Schools franchise network

“The leadership style a small business adopts will vary depending on the nature of the business and ultimately, the personality of the business owner. We work with a lot of small business owners who are choosing to go into business for themselves to find more time and flexibility – so if that is your aim, then it’s something you have to factor into your leadership style. 

“There is no point adopting a micro-management or autocratic style where you heavily monitor what employees are doing and don’t allow others to make decisions. You will be more likely to achieve the life balance you’re looking for if you lean more towards a collaborative approach, where you find the right people for the job, empower them in their role and encourage them to be involved in decision making, ensuring there is a clear framework to help guide them. 

“As a small business owner, you also can’t afford to have high levels of staff turnover, it’s too time consuming and draining on the business – so ensuring your people have a voice, engaging in open and honest communication and allowing plenty of opportunities for feedback are all critical.”

Nick Hunter, CEO & Executive Creative Director, Paper Moose

“I believe that the best managers lead by example and have a natural, entrepreneurial drive to build something. We recently adopted a new corporate positioning as the Change Makers which is about embracing and embodying change, both in terms of our creative output, doing things differently and giving back. It’s meant that our leadership team is now committed to continually innovating and looking for the best ways of doing things operationally.

“To build solid working relationships, leaders need to use their EQ to help identify the highly individual motivations of each staff member and decide how to best support them. For example, a junior might be motivated more strongly by the kudos of an award win, rather than financial incentives, so it’s about how to create the opportunity to fulfil that. Understanding the aspirations, frustrations and behaviours of each member of a team in detail is vital to an effective leadership approach.”

Emma Kirkwood and James Meurer, Founding Directors, Frontier Leadership Training

“A common leadership challenge is for owners/ managers to shift from being in control of all aspects of the business to being able to delegate and empower others to take as much ownership, pride and accountability as they themselves do.

“Being able to collaborate and communicate with employees in ways which encourage them to want to come on the journey is important. If you’re going to grow your business, you need your employees to also be fully engaged and invested in what you’re wanting to achieve. This requires a leadership style that acknowledges their own individual skills and needs, empowering rather than limiting and that takes a certain level of consciousness and training to achieve!

“We find this leadership dynamic is really powerfully demonstrated when leaders come and work with us for a day in our equine training program. Horses are quite similar to employees in many ways – if they’re more concerned about their own safety and survival then their focus is on that, rather than on doing their best in their job. You’re either going to create a willing follower or a submissive one – if they’re willing, they’re actively participating and invested in achieving positive outcomes and overcoming challenges. If they’re submissive, they’re just focused on getting to the end of the day and that’s going to show in the end results.

“A leader who demonstrates genuine care and interest in their employees, who creates a psychologically and physically safe environment and who encourages ideas and contributions from others and seeks win-win partnerships, is always going to bring out the best in others, resulting in individual and business growth.”

Kris Grant, CEO, ASPL Group

“Being a flexible leader is key for SME owners. Being innovative, open to new ideas and willing to pivot gives employees confidence in knowing that when they speak up, they will be listened to. 

“Empathy and listening are so important when you’re growing and scaling a business because people are people and deserve to be heard and respected.”


Read more: Let’s Talk – Toxic employees: How to deal with troublesome staff

Read more: Let’s Talk – How can you drive motivation and teamwork among staff?


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