To sustain successful outcomes, entrepreneurial leaders must embrace an adaptive management style.
With ever-changing or evolving market environments across the globe, entrepreneurs must focus on how they can maintain a flexible mindset to continuously adjust their business and meet new market demands.
Embracing an adaptive mindset allows business leaders to consistently navigate their company to positions of strength where competitive advantages can be sustained and new opportunities seized.
Here, we examine how the leadership style and focus of entrepreneurs must evolve to match the needs of their company as it grows from startup to an established market player.
Changing circumstances that stem from without and outside a business will often dictate the evolutionary path of the company, demanding different managerial approaches.
At times these circumstances can conveniently play towards the established strengths of the business, however changing circumstances can also damage a company's competitive edge.
This unpredictability is the underlying reason why entrepreneurs must develop a nimble mindset to adapt to changing market circumstances. At each evolutionary turn of the business, the required leadership style and approach that can effectively lead the company will change.
Even a simple and predicable change such as growing sales will force entrepreneurs to adopt new strategies and methods to sustain the growth. This may include; increasing inventory, securing cheaper fulfillment contracts, or adopting a new distribution model. Whatever the required reactionary adaptation, it is imperative that the change supports the continued growth and evolution of the business.
This simple example illustrates how new challenges manifest into complex demands that test the leadership styles of entrepreneurial leaders. Maintaining a receptive mindset to identify actual or potential market changes, and being attuned to new technological solutions that can address/facilitate the changes is a fundamental requirement for successful entrepreneurs.
This demands keeping one eye on the environment outside of the company, while the other closely fixed on what is happening within the company. A dichotomy and balancing act that is without doubt a challenge.
To effectively navigate a business through constant change, entrepreneurs must practice flexibility in their management styles. They must be willing to change their entire business model at a moments notice, recognize and accept when a previously held belief is wrong, and be open to the ideas and opinions of others.
Clinging too much to any single management style, methodology or process can doom a company. Leadership isn't about being right at every turn, its about doing whats right for the group and the business.
Business & Leadership Evolution
The best way entrepreneurs can effectively navigate their business through dynamic markets is to practice balancing humility with confidence. Humility allows leaders to be receptive to outside ideas and confidence allows them to identify the best ideas to implement.
Practically speaking this means being receptive to new methods/technologies that can enhance the company's operative processes, and possessing enough foresight to anticipate where potential changes are likely to occur in the market.
The result of this practice is effectively steering a business through the many challenges that emerge in order to sustain the growth and maturation of the company. Not every challenge will be effectively handled because people are not perfect. But entrepreneurs must be able to grow and improve upon their leadership and change-management competences.
The objective is to simply manage each individual challenge in the best possible way. Overtime entrepreneurs must continuously improve upon the conflict resolution skills that work in order to leverage them to manage future challenges.
The Chinese use two brush stokes to write the word "crisis". One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger-but recognize the opportunity.
Challenges should be perceived as opportunities of growth. The perspective will not only improve the probability that challenges are effectively overcome, but the mindset allows for the entire process of managing change to be framed in a positive and rewarding way.
Once the right management style & focus is adopted, entrepreneurs can become effective leaders and successful navigate their company from inception to maturity.
The following table provides a simple illustration of how management styles and responsibilities evolve to match the needs of a growing company.
Management Style Evolution
As demonstrated by this table, the evolution of different leadership styles change dramatically as a business matures.
For start-ups, entrepreneurs must possess a diversity of skill sets to be effective leaders. They must be able to touch every part of the business that affects the strategic vision. For mature businesses, entrepreneurs must be effective delegators and excellent communicators to outside parties including the board of directors and the media.
This reality poses a real challenge to many entrepreneurs who may be effective leaders during the 1st and 2nd stages of their business, but less effective as leaders during stage 4 or 5 of their company.
This reality should not come as a surprise or represent a real concern.
In some cases entrepreneurs possess the strength and resolve to adapt their management styles to maintain their leadership position. However, other entrepreneurs choose to adopt specific roles within the company and recruit more qualified individuals to spearhead the business.
The best way to anticipate how an evolving business will affect an entrepreneur's leadership competences is to simple be aware of how the company will change as it grows.
Successful entrepreneurs cannot lock themselves into a specific management style. Doing so will not only hurt their ability to lead the company, but it stifles the company's ability to mature naturally within its market.
The fundamental goal of all entrepreneurial leaders is to sustain, or accelerate the growth of their company, and achieving that requires a flexible mindset.
Crisis Management Evolution
Rather than focus on how leadership responsibilities evolve, another way to look at how leadership styles & focus change over time is to frame change as a series of incremental crisis.
At each stage of a company's evolution, entrepreneurs face specific forms of crisis which must be properly managed in order for the business to mature to the next stage.
The benefit of this approach is that it probes entrepreneurs to actively brainstorm about what possible solutions can be leveraged to resolve the crisis. This encourages outward thinking focused on the problem, rather than inward thinking that focuses on evolving leadership responsibilities.
The following chart illustrates how leadership strategies must evolve over time to address different forms of crisis that correspond to the growth stages of a business.
Crisis Evolution Stages
This chart reveals and important insight. As a company matures the leadership style and focus of entrepreneurial leaders shift from strategic direction towards team cohesion.
This logical progression illustrates that as a company matures the different crisis which emerge become less focused on what the business aims to achieve, to how the business achieves its aims.
This transition from the "what?" to the "how?" matches the adaptation entrepreneurial leaders must posses to effectively navigate their business in a dynamic market. Once a viable solution has been identified, the "what", the main focus of leaders becomes how to execute on the solution and grow/maintain the company's position in the marketplace, the "how".
Moreover, the chart reveals that as a business matures the areas of crisis become increasingly granular. Early stage crisis focus on the company's solution and its leadership, while later stage crisis focus on specific team cohesion and adaptability to change.
The increasing granularity of crisis is a good thing for entrepreneurial leaders because it means the crisis become smaller and more management. However, the trend presents a challenge to leaders because they must be able to identify where the crisis actually exists.
Early on it is easy to identify that the business solution needs to be adapted to meet market demands. But, it is much more difficult to identify that the product development team needs to change vendors in order to streamline the development process and reduce overhead costs.
This real challenge reinforces the need for entrepreneurial leaders to maintain extraordinary focus on what is happening outside and within their company. The best leaders are able to recognize broad trends as well as identify individual components.
The secret to managing this challenge is to be engaged in every part of the business and maintain strong human connections to the people who are working in each vertical.
To sustain an adaptive leadership style and focus, entrepreneurs should be encouraged to map out strategic responsibilities and probable crisis on an annual or quarterly basis. The exercise should illustrate how responsibilities evolve over time to mach potential crisis.
The goal of the exercise is to anticipate where crisis or changes will occur according to a linear pattern and brainstorm ways to manage them. Underlying this practice is the desire to either maintain or improve upon a companies efficiencies so that when problems occur, they can be easily identified and swiftly resolved.
Problems that fester produce costly inefficiencies and damage moral.
And, the exercise should not be limited to company leaders. All managers and business segments should embrace the method and cyclically put it into practice.
The maps can become effective tools to promote cross-functional understanding among different business segments and align groups to a defined strategy. The exercise clarifies roles, defines specific responsibilities, and illustrates what challenges needs to be focused on in the short and long-term.
The practice can also educate executive leaders on how their responsibilities are likely to transform as the business matures, which can make people more comfortable when facing change and more receptive to personal development initiatives.
For entrepreneurial leaders, the underlying value of mapping out future crisis and responsibilities is to anticipate where and how their leadership style must adapt.
Every entrepreneur wants to successfully navigate their business through the various stages of company growth. The endeavor however, demands balancing a clearly defined long-term vision with a flexible decision making mindset that can match the day-to-day objectives with a company's strategic goal.
In this way, effective leadership styles must always be of two minds.
Of the whole, and of the parts.
Of the system, and of the processes.
Of the future, and of the present.
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