Innovation. Creativity. Delegation. Empowerment. Flat organizational structures. These are just some of the management styles that most academics, journalists, and the Small Business Administration will tell you are “right” for small businesses, startups, and even large organizations.
These management styles all sound great. After all, who wouldn’t want to work at a place where there is unlimited creativity, bosses don’t get in the way, and you’re allowed to make every decision for yourself?
However, small business management isn’t quite that simple – especially if you plan to grow or scale your business with any success. In fact, these flavor-of-the-month management styles are often times the worst possible formula for certain situations.
Before we get into that discussion, though, it is helpful to first understand the two primary general management styles available to small business owners:
Flat, creative, independent, hands-off, and innovative
This is the management style described above, and quite frankly, about the only one you will find covered in modern management journals or courses. It’s the one most preferred by employees, academics, and others with no real responsibility for navigating the many pitfalls of small business growth.
The general philosophy here is that employees are empowered to make decisions on their own, there isn’t much of an organizational hierarchy, managers don’t get overly involved in employees’ work, and there is a focus on innovation and creativity. This is the management philosophy commonly adopted by startups and small businesses in the early stages of their growth.
Standardization, control, and execution
Not surprisingly this management style is less popular in popular business literature. It is often viewed as an “old school” management style that is less appropriate than the above philosophy in today’s culture.
However, small business owners often find this management style to be appropriate at times, especially during times of crisis or high growth. Once a small business or startup tests and tweaks their product offering and operations and prepares to scale for growth, that is where this management style becomes more appropriate.
Which small business management style is best?
As you may have guessed, neither of these management styles are “the best.” Instead, they both have strengths, weaknesses, and tradeoffs that are appropriate during some times and less appropriate in others. As a general rule of thumb – and at the risk of generalizing and over-simplifying – the flat, creative, and hands-off style can be very powerful during the early startup stages of a small business, particularly when your product, service offering, and business model is being tested and modified to find the best combination.
Once you have adjusted your business model and start to realize significant growth, the second management style becomes more important. This is where standardization, control, repeatable business processes, and quality benefit from the more control-oriented management style.
In addition, the second management style can be more helpful during times of crisis, such as downsizing, legal or financial issues, or anything else that could threaten the ongoing viability of your business. During these times, innovation and creativity can be a liability, while a command-and-control philosophy can help the business work its way through the challenges.
In short, there is no easy answer, and there is certainly no one-size-fits-all approach. It is important to understand both philosophies and understand when to use each of the management styles. Throughout the small business lifecycle, both management styles will come in handy and be used – it is just a matter of what mix of both that you use at any given time.