A management style is a short descriptor summarizing specific behaviors exhibited by managers. There are hundreds of theoretical models describing what makes a good manager or leader, typically based on personality or temperament traits such as directness, empathy, flexibility, and agility. Some management styles are better suited than others for certain scenarios and business types.
We at Fit Small Business believe that there’s no ‘one size fits all’ leadership style when it comes to management. So we asked business leaders and educators to tell us what they think.
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Here are the best management styles for small business owners:
1. Strategic Management Style
Strategic managers focus on the big picture, the long term, in terms of the vision of the company and the brand. They not only communicate that vision, but actively seek feedback on the steps necessary to get there. They involve managers, staff, and customers into their planning process and gain buy-in from them.
Strategic managers are typically ‘hands-off’ once they have transferred the vision to those who will execute it. They are the opposite of micro-managers because once they determine and communicate a vision, they tend to trust their employees’ progress toward those goals.
Pros and Cons of Strategic Management Style
- A benefit of this style is that it communicates well and helps employees buy into the company’s vision, brand, and direction. Employees are motivated to jump on board.
- A downside of this style is that it sometimes fails to focus on the details, such as implementing systems to measure progress toward goals.
How To Know If Strategic Management Style Is Right For You
Many entrepreneurs are naturally strategic. If you were bureaucratic, you’d likely never have opened a business and subjected yourself to so many ‘unknowns’. Most businesses benefit by having at least one strategic leader, often the owner at the helm. If you are visionary, can see opportunity and can create a road map to get there, then this leadership style might be best for you. But, in addition, you’ve got to be good at communicating and listening to others who can help – customers, marketers, advisors.
You have to be excellent at not only sharing your vision but delegating, because the enthusiasm your employees feel about what they do will be undermined if you start micromanaging how they do it. Since being strategic and being highly detail oriented don’t often go together, you may want to support your strategic leadership style by working with a business coach or by hiring a detail-oriented-person, project manager, or a staff member who likes to get into the weeds. That person can keep you in the loop and give you a heads up if things start to fall off schedule.
“Strategic leadership is the most successful style for small business owners due to the high number of confusing situations in a growing organization where the meaning of certain events needs to be communicated to employees. Strategic leaders can assess a complicated situation and then communicate an interpretation that assists employees with making sense of the confusion without alienating them.”
“As the owner of a small business, it’s easy to get stuck in day-to-day operations. I put a lot of trust in the people I’ve hired to manage each team, and give them the authority to make their own decisions to lead their teams. This leadership style is ideal where there’s a great deal of trust and when you’ve had the chance to hire great people. I’ve been fortunate to work in that kind of environment, but if I didn’t trust my team or they didn’t trust me, that would be a major roadblock.”
— Donnie Shelton, Owner, Triangle Pest Control
2. Servant Management Style
Servant management style, or servant leadership, is a management style rooted in spirituality, with the business leader being one who serves not only their customers, but their employees. Managers who use this style care for employees on a personal level.
For example, a servant leader sees himself not as one who has power over employees, but as one who provides for their needs so that they can be successful in their job. A servant leader demonstrates by their behavior that his employees are his most important assets, and puts them first, knowing that if he satisfies their needs, the customer needs will also be satisfied, and the business will thrive.
Pros and Cons of Servant Management Style
- A benefit of this style is that employees and customers will feel heard and their needs will be met
- A downside of this style is that unscrupulous employees may take advantage of you
How To Know If Servant Management Style Is Right For You
This style works well in businesses that focus on service, such as a healthcare company, home services, or consulting where you want all employees to follow your service example when working with clients. It also works well in non-profits, where all employees are focused on a common good — such as feeding the hungry or advocating for seniors.
Servant leadership is a management style that requires you to be all in, behaving outside of work with ethics and values the same as you behave at work. If you are a naturally empathetic person, a good listener, focused on the physical and emotional wellness of your employees, this might be the best leadership style for you. Here are what some servant leaders say:
“The leadership style present in the most successful small businesses is servant leadership. The only time I’ve seen servant leadership backfire is in extremely rare instances where what is expected (culturally) is an autocrat.”
“I believe the single greatest trait of a leader in a small organization is a servant mindset. Understand the needs of the team, recognize the tensions and stresses of individuals, foster their growth, and protect them from the unnecessaries. Those belong to you. If you walk into the office every day with the attitude of, ‘How can I make someone’s life better today?’ you will achieve tremendous things as a team. Nothing is more important than the team.”
— Jim Hume, Owner and Principal, Phire Group
3. Transformational Management Style
Transformational management focuses on leading transitions, adopting innovation, and getting ahead of the curve. Managers with this style are aware that no matter how well they plan, things will change, and they not only expect those changes, but lead their organization through them, up to and including modifying their business model if need be.
Pros and Cons of Transformational Management Style
- A benefit of this style is that it’s futuristic, willing to adapt, and innovative – likely to remain relevant even as the industry changes.
- A downside of this style is that the status quo and institutional wisdom have value, and some employees may not want to adapt — they may jump ship if too much change happens too fast.
How To Know If Transformational Management Style Is Right For You
If you like new ideas, are a fan of innovation and are often on the cutting edge of your industry, this management style might suit you. It works well in startups where rapid change is occurring. Lots of industries are ripe for innovation, from biomed to web-based marketing to engineering. For example, even if you’re a lumber company, are there new tools, processes you could use to gain a competitive edge? In fact, good old fashioned service companies like plumbing need to adapt to things like reverse osmosis systems and tankless water heaters. Transformational management works best to help those and other industry-disruptive businesses remain relevant. Here’s what we heard from business owners using this style.
“The great thing about transformational leadership is that you are always on the brink of change. You’re never stagnant nor do you allow others to remain complacent.”
— Jennifer Waterman, Consultant, In Purpose On Purpose, LLC
“The reason why that style of leadership is good for small business is that business is developing. You do not know from one month to the next, what you’ll be doing in the future, one year from the next, and so it is best to be very fluid in your management style.”
— Trave Harmon, CEO, Triton Technologies
4. Lead by Example Management Style
Leading by example is a management style employed by many successful small business owners and department heads when bringing new employees on board or developing employees for future leadership roles. The focus is on modeling the behavior you want your employees to adopt by ‘being the example’ yourself.
This style, sometimes also referred to as a coaching or training style, can be used in any industry, from a customer service business, where you want your staff to demonstrate good listening, empathy, and problem solving skills, to contracting, where you want your staff to follow your example in quality and safety.
Pros and Cons of Lead by Example Management Style
- A benefit of this style is that it’s easy. You get to be yourself.
- A downside of this style is that mistakes and missteps you make will be repeated by your employees. You must make sure your work ethics are demonstrated in your business and that you don’t behave in ways you don’t want your employees to copy.
How To Know If Lead by Example Management Style Is Right For You
If you have the temperament, skills, experience and abilities that you want your employees to learn from, then this style is for you. It allows you to demonstrate, as a coach or trainer would, how best to perform work tasks. It can work in any business where your employees are not necessarily experts themselves and need your example. Even if you employ subject matter experts, your personal style might motivate them to be more friendly, empathetic, patient, or customer focused — or demonstrate any other behavior you’d like to see become a part of your organizational culture.
“While growing from a team of 4 to a team of 14, we quickly figured out that leading by example was the best way to manage. When your team sees that you, the founder-owner, do things properly, they will follow suit. They will go beyond merely being a member of a team and will take ownership in their role at the organization. If you show your team that you care, they will care too. However, this management style can be dangerous if you like to micromanage. You run the danger of taking on too many tasks, so it is important to remember that you’re there to delegate.”
— Blanca Valbuena, Co-founder, Social Draft
“I have found it most effective to show my employees how a given task should be done, rather than just giving orders. By demonstrating that you are an expert at what you are asking them to do and are there to help, it will often result in more respect and productivity from your staff. It’s impossible to deny that the work ethic of an entrepreneur is contagious; if you work hard for them, they are more likely to return the favor and work hard for you.”
— Sacha Ferrandi, Founder, Source Capital Funding, Inc.
5. Collaborative Management Style
Collaborative management style is based on the philosophy that two heads are better than one. Managers using this style share ideas and problems, and encourage employees to participate regardless of their level or job title — by sharing thoughts, concerns, suggestions and solutions — to help the business grow.
Using this style, a leader retains decision-making authority, but gives much more weight and credit to the opinions and ideas of others. This style can be used in any business where there is time to plan. It’s not best in an emergency based business, such as with a surgical team that requires an expert to quickly make and execute decisions.
Pros and Cons of Collaborative Management Style
- A benefit of this style is that it makes employees feel like ‘part of’ the business and encourages them to contribute their best ideas and their best selves at work
- A downside of this style is not all employee ideas are good, and you have to be a master at facilitation to prevent hurt feelings when you choose to go a different route
How To Know If Collaborative Management Style Is Right For You
If you are in a highly creative industry, like advertising, soap making, or real estate sales, this style might work best to encourage employees to contribute their enthusiasm, passion, and ideas to the business. One business owner below referred to this as the ‘Team-Member’ management style where all employees are somewhat on the same level. In addition, this style is great if you’ve hired industry experts to work for you, such as in many technology-based industries, where you need ‘all brains’ to contribute to your business success and everyone in the business is equally qualified to participate.
“Open information sharing with employees and partners makes us smarter, faster, and allows us to provide greater value to our clients. (However), the collaborative leadership style may foster too many trying to lead the group, and not enough members willing to take a backseat and just do what it takes to get the job done. Regardless, the power that a collaborative approach brings to small businesses far outweighs the downsides.”
— Tara Phelan, Owner & Consultant, Outside the Box
“You are not the CEO of Google and if you act like it people don’t want to work for you. Be a team member. Your employees will work harder and be happier if you are on the same level as them.”
— Mark Tuchscherer, CEO, Geeks Chicago
6. Authentic Management Style
Authentic management style allows people in your organization to be themselves, whether it be by demonstrating awesome skills or a having a quirky personality. When the leader behaves in an authentic manner, not ‘acting’ like a manager but being a ‘real’ person, it allows employees to relax and be themselves too.
Although this management style is similar to leading by example, the leader managing with authenticity creates a wholesome, honest, open culture, much like a family or group of friends. It requires self-awareness, and is best in close-knit team based environments.
Pros and Cons of an Authentic Management Style
- A benefit of this style is its openness; everyone is aware of and appreciates what others bring to the table.
- A downside of this style is it may not mesh with your employees who are uncomfortable with candor, or prefer to have a bit of separation between their private and work lives.
How To Know If Authentic Management Style Is Right For You
This style is excellent for those who consider themselves extroverts, open, and honest. If you love people and enjoy talking to them, learning about them, and bringing out the best in them, this might be your management style. It’s less focused on bottom line metrics and more focused on identifying gifts and talents in your team. Authentic managers are self aware, open about their strengths and weaknesses. They allow others to be ‘human’, creative, and bring their ‘whole’ self to work. Authentic managers get things done by aligning an individual’s core competencies to the job role.
“The ONE true leadership style which works for me is doing as I tell my employees to do – being real and authentic, with compassion, humor and playfulness – even and especially in stressful situations. Controlling does not work! I need to allow my employees to take on their own projects, become creative, and make their own mistakes.”
— Karen Hartman, Owner & Marketing Director, ShoomKloom
7. Authoritative Management Style
Authoritative management style is the traditional style you think of when considering a business owner as ‘the boss’. It’s often used by experts who know how to accomplish business outcomes. Authoritative managers know what they want and direct what needs to be done. Managers with this style tend to be candid and to the point.
Pros and Cons of an Authoritative Management Style
- A benefit of this style is that things get done. It is results oriented, and the buck stops with the manager.
- A downside of this style is that it doesn’t give much room for feedback, doesn’t ask for input, and often leaves some of the best ‘thinking’ behind.
How To Know If Authoritative Management Style Is Right For You
If you are the founder of a business, you’re in the best position to direct, instruct, and provide feedback to your employees. For example, let’s say you’ve been in the telecom business all your life, and you open your own radio station bringing on new, somewhat inexperienced staff to help you. You’ll want to provide specific expectations for everything from how the programming schedule is set up, to a electricity back-up plan in case of a power failure. Your employees are learning from you, and you need to be ‘in charge’.
Lots of small businesses use this management style – from independent insurance agencies to small manufacturing firms. However, once the business starts to scale up, and you begin to bring in experts, you may need to be open to other ways of getting things done.
“I am a coach for C-Level execs as well as entrepreneurs and helping them find their voice as a leader is important. I tell them the same thing I tell parents–be authoritative as opposed to being authoritarian. Set expectations and rules, support them when needed, and reinforce behavior you like to see. Doing anything less means they are missing one of the main points of having employees; they micromanage and wind up doing a great deal of the work themselves.”
— David Ezell, Executive Coach, Darien Wellness
8. Autonomous Management Style
Autonomous management style focuses on trust and professionalism. It is the opposite of micromanagement and doesn’t use metrics or project plans to get things done. Instead, it relies on employees to manage their own workload. It is best in those industries that hire licensed professionals or independent contractors who don’t actually need to be ‘managed.’
Pros and Cons of Autonomous Management Style
- A benefit of this style is that people who are experts have full reign to exercise control of their work environment.
- A downside of this style is that hiring is more difficult. Hiring professional staff is critical, and you may need to work with a staffing firm to ensure top-performing licensed talent join your firm.
How To Know If Autonomous Management Style Is Right For You
If you’re in a business that relies on 1099 staff, consultants, or licensed professionals, this is a good management model for you. You may be in a business such as a law firm, a notary service, a mortgage brokerage, or a medical clinic, where your employees are licensed professionals who get it, know what to do, have certification to prove it, and really don’t need training or day-to-day work direction.
“Giving your employees the autonomy to work without constant reassurances or checks gives you the time to get the important things done right. Not only this, but it also gives your staff the confidence and time to work in a way that they know will work – helping both you and the business to achieve more.
I’ve found I’m able to get far more done by letting employees do their jobs without interference, and the company has grown faster than it could have done if I’d been giving my opinion at every juncture.”
— Sean Mallon, CEO, Bizdaq
9. Effort-Based Management Style
Effort-based management style focuses on work accomplished (what) rather than work procedures (how). This style may use project management software to monitor key dates, deliverables, quality, and resources and typically employs some sort of back-end quality control.
Pros and Cons of Effort-Based Management Style
- A benefit of this style is that employees are motivated by the projects they work on, and in some cases, they can choose what they want to work on.
- A downside of this style is that quality assurance and metrics are needed to ensure all projects are assigned and managed within time, budget, and customer constraints.
How To Know If Effort-Based Management Style Is Right For You
If you’re in a field where work comes in the form of projects, such as marketing campaigns, technology implementations, or custom manufacturing, this style might work best for you. Your work environment would be structured with project leads reporting to you who provide you with regular updates on project status, and relieve you of the day-to-day operations. If your business manages multiple and complex projects, with matrixed reporting relationships, this might be the best approach. Here’s what one business leader suggests:
“We’ve taken project-based leadership mechanisms and transformed it into our own style. When we receive a project from a client, there’s usually a queue in which it funnels to a central repository. An employee can choose whatever project he/she wants to engage in, harnessing the productivity of the employee. It’s up to the employee to assess the life-cycle of the project and determine what elements he/she will need to complete the project,. This type of style isn’t without faults of course. Drawbacks would be working to actually develop the skills they (employees) need to achieve day to day and monthly tasks you’re looking for.”
— Reginald Swift, Founder / CEO, RubixLX
10. Good Parent Management Style
Good parent management style positions the business owner or manager as the head of the business ‘family’. It makes sense for family-run businesses or small organizations that treat all their employees like members of the family regardless of their job titles or relationships.
Pros and Cons of a Good Parent Style
- A benefit of this style is that employees feel cared about as individuals, not just as workers, and they are often motivated to help the company achieve its goals.
- A downside of this style is that it works best in very small businesses and may not work well as you grow and no longer have the ability to get to know each employee.
How To Know If Good Parent Management Style Is Right For You
If you have a really small business where all employees are co-located in a shared office space, then this style might work well due to the close proximity and tight-knit structure of your work environment. For example, let’s say you run a coffee shop, retail boutique, or computer repair company and you truly feel that your employees are like your family. This might be the perfect style for you. Here’s what one business and entrepreneurship coach had to say:
“The best leadership style for small business is Good Parent. Leadership and parenting are analogous because you have more power and are responsible for the wellbeing of the whole business family. Since caring about your followers is the number one predictor of leadership success, you always show the kids you care about them, but hold them accountable for their contribution to the business family so they don’t become spoiled and hurt the whole family. There is no situation in which this style doesn’t work best.”
— Terry “Doc” Dockery, Ph.D., President & Business Transformation Coach, The Business Psychology Company & Program Director, CEO Roundtables, Kennesaw State University Shore Entrepreneurship Center
Honorable Mention! Cersei Lannister Management Style
The Cersei Lannister style comes to us from a media savvy contributor and is a direct style that requires you to take on a competitive, ‘winner takes all’ approach to your business. It may also be referred to as a top-down or conventional style of management.
Pros and Cons of Cersei Lannister Management Style
- A benefit of this style is things get done by lobbying the team around the idea of beating the competition.
- A downside of this style is that it is not for the faint of heart, and people might be turned off by your “anything goes” mode of leadership.
How To Know If Cersei Lannister Management Style Is Right For You
If your business is in a highly competitive industry, such as telecom, or the primary focus of your business is outbound sales, this leadership style just might work. Consider thoughts from this business owner:
“The best leadership style for small business owners is absolutely the ‘Cersei Lannister (Game Of Thrones) style’! This approach dominates all others because as a small business owner you bear the ultimate responsibility for mastering your competitive landscape and industry rivalries. To not only survive, but thrive, you must develop and execute this leadership style to dominate your competition. This leadership strategy is not ideal in a business that wishes to continue the status quo.”
— Gerald Ratigan, CMA, CPA, Founder, Virtual CFO Advisors
Worst Management Styles
While researching the best management styles for small business leaders, we identified and wanted to make brief mention of some of the worst styles exhibited by managers, such as:
1. Laissez-faire Management Style
These managers are lackadaisical about how employees work, providing no oversight, feedback, or support. This may result in rising costs, poor quality, and unhappy customers as employees are left to figure things out on their own.
2. ‘Know-it-all’ Management Style
These managers behave as if their employees have no skills or expertise. They constantly blurt out their opinion where it is not needed, insulting and demoralizing all but the most entry-level employees, likely increasing turnover.
3. Micromanager Management Style
These managers constantly check up on employees and look over their shoulders. They give workers little to no autonomy in how they perform their jobs.
4. Autocratic Management Style
This style, also known as “my way or the highway”, is one in which procedures must be followed to the letter in spite of common sense. There are a small number of highly detail-oriented individuals who may be willing to put up with this style, but most employees will find the workplace stifling, and morale will suffer.
If you’ve ever found yourself falling into these less than effective management styles, we urge you to review the list of our best management styles above, and pick a better approach — for you and for your business’ sake.
Determine Your Best Management or Leadership Style
Many training and consulting organizations provide tools to help you determine your personality or temperament style and are based on an ancient model that identifies four primary traits. It is thought to be the combination of these traits that determines your management style. Of course, there are hundreds of well-researched academic and business models, such as Myers-Briggs, with validated assessment tools and consulting services you can engage to improve your management style and develop leadership skills in your staff. Or just for fun, search for personality ‘test’ or ‘quiz’ on your Facebook page to learn more about yourself.
Below are some websites that I’ve personally used to measure management strengths, improve leadership skills, and train others to build their management skills:
- Lominger – Tools and consulting to assess leadership competencies in yourself and your staff
- Gallup – Books, research, and survey tools to identify management strengths
- Management by Strengths – An easy to use model and survey tool to assess management strengths
- Situational Leadership — A management model that suggests managers change their approach based on the situation
- Model-netics — Management models used by IT and project managers for management communication
Bottom Line: Best Management Styles
As you may have guessed, there is no one size fits all when it comes to managing your business. The best management style starts with identifying your personality traits, your temperament, and your business needs. And as a sentient being, you are able to change your behavior regardless of your personality or natural style. However, choosing a leadership style that best suits your business and your personality is an opportunity to grow your interpersonal skills and self-awareness in a way that helps your employees perform (and thrive) and ensures your business will grow. The examples provided above are a good start. Best of luck in your journey. We’d love to hear what works best for you in the comments below…
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