Finding an Effective Management Style for Your Small Business

Two man talking together at a table.Quick, name the worst manager you ever had. Chances are, it didn’t take you long to recall the name (and the experience). At the heart of the issue is often their management style. Some manage too much and others too little. Now that you’re a manager, what’s your management style? Take a look at these management styles and see which best describes yours. Examining different styles can help you find which works best for your small business.

As a manager, you’re called on to plan, control, and organize how your business operates. But in order to do those things, you need to be able to motivate and inspire your staff to meet those goals. That takes leadership. Consider these approaches to the leadership part of management.

Autocratic Style – It’s my business and I make the calls.

It’s all about getting the job done for these individuals, regardless of how it impacts staff. They unilaterally make decisions, give the orders, and expect others to follow. They like to be informed about all aspects of the business so they can make the right decision. Donald Trump and Steve Jobs are examples.

  • Pros: Tend to be efficient at making decisions, especially in a crisis since they have knowledge of all aspects. Can be effective at producing output around a single vision.
  • Cons: Can miss out on input from others that might provide relevant information. Staff can feel unacknowledged which can lead to low engagement.

Democratic Style – Let me see a show of hands.

These individuals want to get the job done too but they share decision-making with staff. They incorporate input from many sources before making a final decision. So they encourage participation and teamwork. It’s sometimes referred to as “leadership by committee.” Examples include Jimmy Carter and Mark Cuban.

  • Pros: Increases staff engagement since they had input into the decision. That makes implementation easier since everyone has bought into the solution.
  • Cons: Often takes longer to gather input from multiple sources and that can slow down the decision-making process.

Laissez-Faire Style – Do what you think is best.

These individuals take a hands-off approach to decision-making. They trust that their people are knowledgeable about the business. That means they don’t have to micromanage every aspect of a project. It is common for them to delegate many tasks so those closest to the action make decisions. Both Warren Buffett and Richard Branson are examples of this type.

  • Pros: Encourages a high degree of personal ownership among staff. Frees the manager to concentrate more on strategy.
  • Cons: There’s the danger of chaos in the hands of employees who do not have the skills or experience to make good business decisions.

Compassionate – My people are my biggest asset.

These individuals value their staff above all else. So they emphasize harmony and good working relationships. Interpersonal relationships are important and they seek out the temperature of the business often to see how people are feeling. They tend to make decisions that everyone will like. Examples in this category are Arianna Huffington and Joe Biden.

  • Pros: Emphasizes coaching and team development. Motivates staff by giving them a sense that they are valued. May be more appropriate when in maintenance mode.
  • Cons: Less effective in crisis situation where direction is needed. Less emphasis on getting the job done.

So which management style is best? Some management experts say that the most effective managers are ones who can flex among several styles. The idea is to match the style to the situation. So, a directive style might be used in a crisis while a laissez-faire approach might be more appropriate for seasoned employees.


Consider these management styles to find what works best for your small business.

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