Leadership

Businesses come in all shapes, sizes and stages of growth—which means leadership can take many different forms, depending on whether you’re running a new small business or a more established larger one.

Business leaders who succeed tend to have two key things figured out: their business direction and themselves.

What makes someone a good leader?

A leader is someone who can share their vision and values while inspiring a group of people to jointly achieve shared goals. Successful leaders usually have:

• a sense of purpose
• self-awareness and a conscious leadership style
• emotional intelligence
• strong communication and listening skills

Leaders have a sense of purpose

According to BDC Advisory Services Senior Business Advisor Sharon Horne, a successful business leader must pair the ambition of turning a profit with an authentic sense of purpose. “Beyond being profitable, what do you want to accomplish? What are you trying to create or change?” she asks.

If you are an aspiring leader, your first critical task is to fully explore what you’re looking to accomplish. If you dig deep into what you truly value—for example, integrity, creativity or environmental stewardship—a vision for your company will emerge. That vision, born from a purpose and strongly held values, needs to align with your business model.

Then, says Horne, you can start to instill those values among employees. She suggests meeting with them regularly to make sure everyone is clear about what the business is trying to achieve and how it will do that, and supporting them in their work.

Self-aware and conscious leadership

Successful leaders tend to spend time analyzing both their business and themselves. Understanding yourself is more challenging than it sounds, but it can contribute to insights that can help you shape a more successful business model.

Part of the self-reflection process involves discerning your natural leadership style. Once you’ve decided where your style falls, consider whether it suits your company’s size, stage and circumstances.

Entrepreneurs often gravitate to a particular leadership style—for example, you may delegate rather than consult. But you can also consciously work to adopt a new style if change is needed to overcome a business challenge or pass through a growth phase.

Leadership takes emotional intelligence

Changing your leadership style requires versatility—but more than that, it requires emotional intelligence. This means being attuned to other people’s emotions so you can have better intuition about their needs.

Emotional intelligence can also help you create a safe environment, where people are willing to share their thoughts and opinions. These meaningful conversations can lead to positive change.

“I would suggest engaging in regular self-reflection and taking a careful look at what your business and employees need from you right now,” says Horne. “Developing emotional intelligence usually requires you to engage in some self-directed learning. To do that, you’ll need to bring an open mind and a sense of curiosity.”

According to the Harvard Business Review, there are four domains that every leader looking to develop their emotional intelligence should work on:

Strong communication and listening skills

Clear, frequent communication can turn your personal vision into shared values, says Horne. But it’s not all about talking.

“While leaders must have good communication skills, it’s equally important for them to listen,” she says. “When employees know you’re listening, they often feel more valued and become more willing to contribute—and you won’t find yourself missing out on their ideas and suggestions.”

She advises leaders to ask strategic questions, listen attentively to people’s concerns, strive to understand their perceptions of where the business is headed and encourage a collaborative approach. Leaders who are good listeners create honest, authentic connections, which can generate meaningful and productive change in an organization.

Leadership in a growing company

“Leaders are leaders are leaders,” says Horne, “whether they are launching a small tech start-up or running a multinational company.” Roles and responsibilities can differ significantly, but the essential qualities and aptitudes—vision, communication skills, self-awareness and emotional intelligence—are a constant across the board.

That said, a leader’s main day-to-day responsibilities are likely to differ according to the nature of the business. Entrepreneurs in smaller operations often play multiple roles and may be more hands-on, whereas those in larger businesses can play niche roles and spend more time strategizing. It is essential, says Horne, to continue to share the vision and purpose of the business whether you are leading a small or large company.

If your business is still small, you will more often lead by doing. Not only is that essential when you have a lean staff, but it builds credibility and lets you zero in on shorter-term goals and systems. Another key task is to build trust and personal relationships in your tight-knit group. This allows for such things as team-building exercises and creating ties outside of the workplace.

As your business grows, you will focus more on setting direction—vision, mission, strategies—and thinking ahead. Larger organizations may struggle with quick change, so you need to anticipate what’s coming. For a larger company, you’re also likely to focus more on delegating and communication.

How does a leader share their vision?

It’s not enough just to have a vision; to lead effectively, you also need to share it in a way that will get employees to care about it.

One way to do this is to invite people to collaborate and share their ideas on a particular problem you are trying to solve or a goal you are trying to achieve.

Smaller businesses may have an edge in this regard because they can be nimble and are more likely to have employees that can help create a foundational vision.

“Never underestimate what a good meeting can do,” says Horne.

How does a leader handle failure?

Failure is something an effective leader does not shy away from. They are open about it and ensure their employees know that it’s okay to fail. In fact, never failing can be an indication that you aren’t innovating enough. Many successful businesses encourage a culture where employees are not afraid to voice ideas and try new things.

Having to redirect can be part of the learning process and help you grow in new, unexpected directions.

Leadership can mean pivoting and redirecting

Leaders must be prepared to adapt their business models and practices to a changing world. “This means being nimble, versatile and flexible enough to steer a company through a crisis or help it adapt to new circumstances,” says Horne.

COVID-19 is a case in point. During the pandemic, some businesses that were unable to adapt (or deftly guide their employees through change) ceased to operate. Those that survived had to pivot quickly.

Other leaders will pivot if they see a business opportunity, and do it by retooling, expanding or completely rethinking their operations.

Leaders need to embrace technology

“Leaders should consider whether or not they are using the optimal tools available to them. Adopting digital technology can make employees’ lives easier while helping the business accommodate clients—or even expand their client base,” says Horne.

It’s not enough to know how and when to bring in new technology. It’s also important to build a culture where people are eager to learn and ready to work with new technology.

What’s the difference between management and leadership?

Managing a project or a team does not necessarily make you a leader.

“Being a leader is less about your job responsibilities and more about you, personally—the qualities you cultivate and the way you get others to buy into your vision,” says Horne.

It’s not uncommon to confuse management with leadership, given that managers oversee and guide more junior employees. But while a manager may lead and a leader may manage, the two are not always the same. Managers don’t necessarily inspire others, push for innovation or have the latitude (or inclination) to operate independently of the corporate chain of command.

Is there such a thing as a born leader?

There is a misconception that people are born leaders—that the quality of leadership is somehow innate. Some may be destined to be leaders, but leadership can also be learned. As mentioned earlier, that process starts with self-reflection, purpose and vision.

In short, being a leader has nothing to do with your salary, work title or place in the company hierarchy. It doesn’t matter if you’re running a neighbourhood shop or a national corporation. Leadership comes down to a set of core values that you can work to develop, including self-awareness, emotional intelligence, open-mindedness, versatility, passion and authenticity.

Next step

Identify your leadership style and learn how to coach your employees and delegate tasks more effectively with our free guide for entrepreneurs: Leadership is Key to Growing Your Business.