Any experienced entrepreneur or manager will tell you that as a business grows, one of the biggest challenges is leadership. That challenge begins the moment you hire your first team member, and the challenge only grows with each addition. So what's the best model for leadership in a startup environment? The old one -- of the authoritarian boss -- is rapidly being replaced with leading by example.
What do many successful entrepreneurs in this day and age do? They choose servant leadership.
The concept of servant leadership is based on principles that are centuries old. But the actual term for a leader who upends the power pyramid to put others' needs first was introduced by Robert Greenleaf in his influential 1970 essay "The Servant As Leader" in 1970. And it's since risen in popularity in the United States.
Adam Grant, for instance, a leading management researcher and professor at the Wharton School of Business, wrote in his breakthrough book Give and Take that research shows servant leaders are more productive and more highly regarded by employees. Servant leadership has also been implemented by incredibly successful companies like Whole Foods, UPS and Ritz Carlton.
What are servant leadership's main principles? Here are six, identified by author-writer Larry Spears (who established a center on servant leadership), along with real world examples to help you distill this philosophy into practices that can help transform your business.
Satya Nadella is only the third CEO in Microsoft history, following in the footsteps of Bill Gates and Steve Ballmer. Nadella has spoken of the important role empathy plays in being an effective leader. He's even written a book about it, saying that empathy "will become ever more valuable in a world where the torrent of technology will disrupt the status quo like never before."
The servant leader strives to understand and share the feelings of each team member as well as those of his or her customers. Giving trusted coworkers the benefit of the doubt by assuming the good in them goes a long way toward instilling loyalty and trust in you from your team.
Servant leaders have a strong awareness of what's going on around them. They care deeply about the welfare of their team members and don't view them simply as cogs in a machine.
Servant leaders care passionately about their employees' well-being. Tesla's Elon Musk recently demonstrated such awareness by pledging to work on the production line at one of his manufacturing sites, performing the tasks that had resulted in some of his workers being injured.
More importantly, servant leaders are self-aware. They have a deep understanding of the effects their decisions and behavior have on others around them. Awareness comes at a price -- as Greenleaf wrote: "Awareness is not a giver of a solace -- it is just the opposite. It is a disturber and an awakener. Able leaders are usually sharply awake and reasonably disturbed."
3. Building community
Paul Polman, CEO of Unilever, the world's largest consumer-goods company, believes passionately in building a community where both employees and customers can thrive. Unilever's brand of conscientious capitalism is hugely successful. The company is a $170 billion dollar empire and its products are used by 2.5 billion people every day.
Unilever is particularly active in emerging markets. An initiative called Perfect Villages, for example, provides 1,000 towns in Vietnam with Unilever assistance. Executives have mandatory weeklong stays with "poor rural families that might share one toothbrush among five people." As Polman has said, "You can put yourself to the purpose of others, and in doing so, you can be better off."
Rather than simply directing employees to follow orders based on a rigid hierarchy, the servant leader relies on persuasion rather than coercion. The late Steve Jobs of Apple was widely regarded as a master of persuasion. His employees often spoke of his ability to persuade them to meet seemingly impossible deadline goals.
In fact, skill at persuasion is one of the differentiating factors between a traditional authoritarian management structure and the service-driven approach. Persuasion involves one important component that orders don't: dialogue. When you engage with your employees on why something is a good idea for the team, and work with them to see how it benefits everyone, employees are more likely to develop the internal motivation required to complete the task effectively.
Servant-leading entrepreneurs focus on the big picture and don't get overly distracted by daily operations and short-term goals. According to Virgin CEO Richard Branson, while you need to pay attention to every detail in the early, survival mode stage of your business, later you should delegate and focus on the big picture.
Servant leaders empower their staffs to handle quotidian matters, freeing themselves to dream a better future for the team and the company. This doesn't make the servant leader an impractical daydreamer -- just the opposite. An effective servant leader will have a deep understanding of every aspect of the business, but won't allow himself or herself to be distracted from long-term goals. Feeling this freedom is also a good sign that you have competent employees whom you can trust.
Servant leaders care passionately about the personal and professional growth of each member of their team. The Washington Post described a servant leader as someone who doesn't think he or she is better than the people lower on the ladder or that unless employees are carefully watched, they won't work hard. Servant leaders believe that if you create the right values and culture, normal people will do extraordinary things.
Facebook was crowned best company to work for in 2017 by GlassDoor. Free food and 18 weeks' paid leave for new parents (male and female) are among the many benefits that CEO Mark Zuckerberg offers employees.
Though servant leadership may appear at first to be an oxymoron, it is a leadership strategy that's been embraced by some of the world's most successful companies.
There is powerful data to back up the advantages of servant leadership. The University of Illinois at Chicago Business School conducted a recent study at national food chain Jason's Deli with a sample size of 961 employees at 71 restaurants in 10 metropolitan areas. Among those restaurants, the stores with servant leaders showed a:
6 percent higher job performance
8 percent increase in positive customer service ratings
50 percent higher staff retention rate
So, if you're launching a business, consider taking a page from Jason's Deli's book. There's no better time to build a positive corporate culture than starting at the top.