What’s the “best” leadership style? — Part 1

That’s “big company”

If you have worked in a start-up, then you know that phrase. And you know that it isn’t a compliment. “Big company” refers to doing things in a way that is perceived to be overly complicated. And it has negative connotations on the use of time and money. 

On the other hand, if you are in a multinational, well-respected people will say “let’s get it right.” They exhort their teams to think an idea through, build widespread support, and execute it right the first time.

So is there a universal “best approach” across different size organizations to getting something done? Like so many things, the right approach depends on the situation. And savvy leaders in large and small companies recognize that the best approach for a given situation sometimes demands that they step outside of their organization’s comfort zone.

But let’s start by taking a look at the “how and why” of typical execution in large and small firms.

The power of size

In large corporations, the investments and the scale of initiatives are bigger. More people and departments are involved in decision-making and execution. And multiple business lines and geographies compete for the same resources. So the decision makers in large firms want to know that their investments are justified by strong evidence.

These companies also budget the time and money to thoroughly explore opportunities. And when they are at their best, they execute with the resources necessary “do it right.” By leveraging their brand and footprint, these organizations can be a force to be reckoned with in the market.

At the same time, when a mistake is made on an important decision, it tends to be costly. Consequently, personal reputations are frequently nurtured by avoiding the big mistake. And that is why people in larger organizations tend to operate more conservatively than those in smaller ones. 

The value of agility

In contrast, smaller organizations – particularly VC-funded – are in a race to get to market, grow revenues, and preserve cash. For them, survival depends on hitting milestones – a lot of them, and fast. They simply do not have the time and money to check and re-check every decision.

In the early days at Medtronic, legendary founder Earl Bakken exhorted his employees to “Ready, Fire, Aim.” That’s not a misprint. That’s a culture and a way of thinking that serves small companies well in many facets of their operations.

Additionally, start-ups tend to have higher levels of alignment. The success of the company and the individual are more closely tied together. And that’s because they tend to have fewer product lines and a higher proportion of compensation tied to equity. In smaller organizations, individuals succeed by implementing quickly – and adjusting on the fly – with limited resources.

So which approach is right?

In my experience, all companies compete to create, communicate and deliver value to customers. Fundamentally, large and small companies need to achieve the same things. But the “best” approach and tactics tend to be unique to each. That is why people who switch from a large company to a small – or vice-versa – usually go through a period of “culture shock.” Those who successfully make this transition have the wherewithal to “figure it out” and quickly adapt.

Skilled leaders in large and small organizations have the “conscious competence” to recognize why cultures and approaches evolve. They understand the differences in approaches and the rationale and motivations behind them. Consequently, they don’t limit their recruiting to only people from one type of organization or another. Rather, they evaluate adaptability in hiring. And they coach new employees to help them to be successful.

Additionally, the best leaders recognize when their organization’s traditional culture serves them well and when it doesn’t. And they challenge and lead the organization in a different way when they recognize a situation in which an alternative approach is required. 

We’ll explore this further in our next blog – shockingly titled, “What’s the best leadership style? – Part 2.” 😉