Business leadership and business growth go hand-in-hand. You can’t have one without the other. So read on to learn all about it.
Understanding Business Leadership
What is Leadership?
Leadership in a business can refer to an individual or a group of individuals that influence important strategic decisions. In many businesses, leaders often hold high-ranking positions in the company.
For example, the business owner, founder, president, chairperson, CEO, COO, CFO, and even some managers are considered leaders. Different types of businesses will require a variety of leaders or leadership teams.
Regardless of the management structure, leaders are usually in charge of the following tasks:
- Sets the company’s vision, mission, and development goals.
- Manages resources of the company.
- Develops strategies to help the company stay competitive.
- Makes quick decisions when needed.
- Sets the company’s culture.
- Inspires employees’ performance and innovation.
- Communicates important messages.
Read more about the qualities of a leader and what differentiates them from bosses.
Why Is Leadership Important In Business?
Leadership can make or break a business. For a business to stay competitive, effective leaders need to pay attention to the bigger picture.
Senior management is usually in charge of developing and communicating new strategies to their team members. On top of that, businesses can go through operational, organizational, and strategic changes.
So effective leadership skills are especially important when companies need to navigate through change. When it comes to day-to-day operations, employees naturally take their cue from the leaders. So they need good role models in their leaders.
What’s the difference between leadership and management? Here are five things you should know.
What Is a Good Business Leader?
Regardless of the business context, here are some best practices that many good leaders follow:
- Use metrics to make sure that the business is on the right track.
- Keep everyone focused on long and short-term goals.
- Invest in employee training.
- Communicate confidently, clearly, and effectively.
- Continue to learn and gain new knowledge about their industry.
- Balance organizational needs and employee needs.
- Delegate responsibilities and leadership roles.
- Accept and offer feedback.
- Maximize their employees’ talent.
- Inspire employees’ motivation with the right incentives and rewards.
Why is it important to keep your employees motivated? Read all about transformational leadership and how they build the future.
What Are the Different Types of Leadership?
A leadership type or style refers to an individual’s approach to giving instructions, implementing plans, and motivating others. Experts believe that leaders usually have one or two dominant leadership styles.
Common leadership styles include:
- Participative leaders – this type of leader doesn’t hesitate to delegate tasks to their employees. They trust them and look forward to their insight.
- Directive leaders – this type of leader relies on role clarity. They make sure their employees know what they need to know to accomplish their tasks.
- Achievement-oriented leaders – This type of leader is likely to establish key performance indicators (KPI) with each employee. They like to focus on results and efficiency. These leaders push their employees to meet and beat their KPIs.
- Action-oriented leaders – Leaders who use this style are often hands-on with their work. They like to lead by example while employees observe and play supporting roles.
- Transformational leaders – With this style, leaders make sure that employees have ownership of their roles and tasks. They bank on their employees’ potential and invest in their development.
- Supportive leaders – These types of leaders are very approachable and tend to display a lot of empathy. They can foster a high level of employee loyalty.
- Laissez-faire leaders – They are the opposite of directive leaders because they tend to delegate everything. Unlike participative leaders though, they aren’t present in the process and they’re very hands-off.
- Transactional leaders – These leaders rely heavily on predetermined incentives to get their employees to perform well.
- Bureaucratic leaders – These leaders are sticklers for rules. They expect their employees to comply with established procedures leaving little room for creativity or innovation.
There is no single path to good leadership. Each leadership style has its own pros and cons.
Business leaders need to know their natural leadership style. That way, they can maximize their strengths.
However, it’s equally important to address their weaknesses. Certain leadership styles may be more beneficial for certain types of employees.
So leaders need to be flexible in how they engage with their team. Through training, leaders can develop other styles.
Understanding Business Growth
What Is Business Growth?
Business growth is an ongoing process. Business growth can occur any time a leader attempts to improve certain aspects of the business.
Regardless of the industry, all businesses seek to grow. However, it’s especially important for small businesses to achieve business growth.
Many start-ups need to grow to survive in this competitive climate. They may not have the safety net that many larger businesses have.
Interested in learning more about growing your start-up? Read How to Succeed in Business: Hiring A Virtual Assistant for Startup Growth!
What Are the Types of Business Growth?
Leaders need to operationalize and define their business growth targets. In most cases, these targets involve the following performance indicators:
- Number of customers
- Number of employees
- Company’s overall value
Companies don’t grow along these metrics all at once. For example, an increase in revenue doesn’t necessarily mean an increase in customers or employees.
Sometimes, they’ll notice an inverse relationship between certain metrics. For instance, if you boost sales by reducing the price of your products, your revenue can go down.
It’s important for start-ups to reduce costs to thrive. Many businesses rely on growth strategies to increase their bottom line.
Looking for some help to grow your business? Learn from Janet Kafadar and how she restructured her business for growth with the help of a virtual assistant.
What Are the Four Growth Strategies?
There are four main business growth strategies:
- Organic business growth
- Strategic business growth
- Merger or Acquisition
- Internal business growth
Organic business growth refers to the traditional way of growing a business. It focuses on increasing product stock or the service capacity of your business. An example of this would be increasing the store size.
Strategic business growth involves long-term goals and investments. Usually, leaders use this strategy when they’ve maxed out their organic business growth opportunities.
Strategic business growth strategies can include spending on marketing to reach untapped markets or producing a new product. It’s important to note that strategic growth doesn’t happen as quickly as organic growth.
The merger or acquisition strategy involves creating, buying, or partnering up with another business to expand your market. When you merge with another business, you usually inherit their customers as well.
Internal business growth involves analyzing the business’ resources and assets. With this strategy, leaders try to figure out how to maximize what they have and identify ways to cut costs and become more efficient.
Looking for new ways to drive business growth and success? Read Matthew Barby’s testimonial and find out how he used the expertise of specialist virtual teams to grow his business.
How Can You Make Your Business Grow Faster?
Business isn’t black and white. Many contextual factors can promote or prevent business growth.
It’s important to analyze and capitalize on business trends. An undeniable business trend is e-commerce. There’s been tremendous growth in e-commerce in the last few years and experts believe that it’s here to stay.
Taking your business online is a great way to grow your business. Digital marketing strategies allow you to reach markets that would otherwise remain untapped.
Taking your business online can be intimidating, but you don’t need to do it alone. A virtual assistant can help you. From marketing to customer relations, a virtual assistant can help put your business on the online map.
On top of that, employee hours can be a limited resource for many small businesses. Hiring too many full-time employees can increase your overhead.
Are you interested in alternative ways to staff your company? Read all about virtual assistants and how they can help you grow your business—even if you have to take time off.
Business leadership and growth go hand-in-hand. Leaders help keep businesses on track to meet their growth goals.
In addition, effective leadership behaviors provide opportunities for the business to succeed. So when businesses invest in leadership development, they’re also investing in long-term business growth.
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