Life as a startup founder can be unpredictable, to say the least. How are you dealing with this uncertainty? Some founders allow their fear to influence their leadership style, turning them from scared to scary leaders and managers. Sounds unpleasant? It’s worse than that. Scary leaders may be costing their companies money and making it harder for tech startups to thrive in the first place. Here is a closer look at how fear turns into loss.
How Fear Destroys Effective Leadership
One in four leaders in the UK makes decisions based on fear. That is the result of a global leadership survey conducted by executive coach Margot Faraci. Faraci interviewed 2,500 leaders of corporate businesses, 1,000 of them here in Britain. Her findings paint a staggering picture. Worldwide, one in three leaders is strongly influenced by fear.
In practice, the fear experienced by corporate leaders translates into creating an environment of fear in their workplaces. Far from cowering fearfully in the corner of their office, these fearful leaders pass on those negative emotions to their teams. What does it all have to do with tech startups? With that many leaders driven by fear, it stands to reason that there are tech startup founders with that leadership style.
While I don’t have data relating to startups specifically, it’s only logical that the uncertain nature of startup life and development would make it more likely for founders to experience fear and pass it on to their teams.
The problem is that fear doesn’t lead to more successful work. Instead, allowing a culture of fear to develop within a business will be detrimental to the company, no matter how new or how small that business is. Scared and scary leadership creates a toxic work environment where creativity is lost, productivity and performance drop, and growth is at best stunted. For a startup, that spells disaster.
Are You a Scared / Scary Leader?
As a startup founder, finding out whether you are one of the 25% of leaders who inspire fear among their teams could be critical to the success of the entire enterprise. Moving away from being a toxic leader and toward being someone who inspires their team can make the difference between turning your big idea into a reality or remaining stuck at the ideas stage.
So, how can you determine what kind of leadership style you have? Theoretically, you could ask the people you work with what they think. However, in practice, scared leaders are unlikely to ask for feedback, and depending on how deeply ingrained that fear is within your team, you may struggle to get direct answers.
If asking others is not an option, try to take a long, hard look at your behaviour as a leader and ask yourself some tough questions.
- Do you often feel anxious about the company and your work?
- Do you tend to micromanage?
- Is that tendency combined with a feeling of being an imposter and an inclination to get angry easily?
If the answer to one or all of these questions is yes, there is a good chance that you’re leading by fear.
The consequences of that leadership style are not only reflected in the atmosphere you create in your workplace, but they also show in the company’s financial results. Research suggests that so-called fearful leadership costs companies ten hours in leaders’ productivity every week. That translates into just over £9,500 per leader per year. That’s more than a tech startup can afford.
How To Change Your Approach
We’ll all have heard the saying ‘a leopard doesn’t change its spots,’ but the good news is that a leader can change their approach to being in charge of a team.
To begin, it helps to understand the source of your fear-driven leadership style. Many leaders are repeating behaviours they previously experienced from their managers. Consciously or unconsciously, they’re perpetuating negative and ineffective leadership styles. Ask yourself what your managers have been like in the past. If they fell into the scared/scary category, there is a good chance you may be repeating some of those mistakes.
Having narrowed down the source of the issue, let’s take a look at the potential solution. The Business Development Bank of Canada (BDC) offers a few excellent, practical suggestions here. Without wanting to repeat everything they said, I will highlight some of the behaviours that would be most applicable to startups and add thoughts of my own.
- Have a clear vision: building a tech startup is fraught with uncertainty, and without your vision as a north star, it is impossible to stay on track. Make sure your team understands and shares that vision.
- Avoid creating a blame culture: mistakes happen in every work environment. Try identifying where the problem is in the company’s process rather than searching for a person who made a mistake. Processes and procedures may push team members to act in a certain way. Changing the process can change their action and improve the outcome.
- Stay close to the ‘daily grind:’ as your team grows, you may find yourself further removed from the proverbial shop floor. As a founder or part of the company leadership team, your time may well be spent working on securing additional funding and finding new investors. At that stage, it’s all too easy to lose your connection to the people you’re relying on to build your product or deliver your service. Make sure you schedule time on the shop floor.
- Recruit top talent: for the past few years, skills shortages and a lack of qualified workers have never been far from business-related headlines. As a tech startup founder, you’ll quickly reach a stage where you can no longer do it all yourself. At that point, you ideally need to have a talent pipeline, a database of people who may be interested in working with you. Keep building this pipeline, even before you think you need it. It’ll avoid delays when your business takes off.
- Admit to failures: remember what I said above about mistakes happening in every environment? That includes your tech startup’s leadership team. Admitting to mistakes or lessons you learned will make you more authentic and relatable as a leader. At the same time, your team members will feel safe to talk about their own ‘lessons learned.’ The entire business benefits from that kind of culture.
What About the Finances?
If you’ve read my blog for a while, you know that I love bringing things back to the financial aspect of running a business.
That is no different when it comes to scared/scary leadership. We already said above that this approach to leadership is costing your business money every month. It’s hard to see the impact while you’re still practicing ineffective leadership. You’ll only be able to measure the impact of the changes as they’re being implemented.
Aside from an increase in turnover, look for greater staff retention, an influx of applications from suitable candidates, and measure changes in operational productivity and overall staff morale. These areas, as well as the overall trajectory of the startup, are where you’ll see the difference a more effective leadership style is making.