For managers – whether you’re a budding entrepreneur or a seasoned leader up the corporate ladder – understanding the nuances between the two may help you find your leadership strength.

Leading a startup – hands-on and agile

Entrepreneurial spirit and agility define startup leadership. You are adaptable and resourceful if you’ve founded a small business from scratch. You’re still in the earlier stages of business growth, often with limited resources and a small team but with high potential for doing more.

This environment usually requires every team member to wear multiple hats. A hands-on approach lets you keep a firm hand on the reins and still connect with every aspect of your budding business.

At your core, you are a visionary thinker. You look toward the future and communicate goals in a way that empowers your team to contribute. Your ability to inspire your staff will prove invaluable when stakes are high and resources are thin. Your leadership sets the tone for the startup’s culture. Make sure it values creativity, adaptability and a strong sense of commitment to your mission.

The unpredictability of a startup means plans often change. Being able to pivot quickly is a necessary skill. Startup leaders must be willing to embrace novel ideas, respond swiftly to market demands, and incorporate customer feedback.

Additionally, tight constraints on resources are part of the startup package. Resourcefulness is an essential leadership trait, including finding creative ways to do more with less. Work closely with your team to maximise efficiency, learn what you can from failures and constantly innovate.

A startup’s primary priority is customer acquisition, which necessitates a consumer-centric approach. Every client matters, and as a leader, you must ensure your team remains deeply engaged with your target audience’s needs, refining products or services based on direct feedback. This continual cycle of improvement often defines success for startups.

Leading an established company – structured and strategic

In contrast, established companies operate within a more defined structure. Years of operation have produced time-tested practices that work best for the organisation. Leadership here is more strategic, focusing more on sustaining growth, optimising processes and managing larger teams. Unlike in startups, where speed and flexibility are paramount, leaders in established organisations often deal with longer-term planning. Calculated thinking becomes essential, as your role connects to the company’s broader goals.

Managers in established companies should master the art of delegation. With larger teams and a more complex organisational structure, delegating responsibilities, assigning tasks, and empowering employees are vital skills for maintaining productivity. You keep your focus on higher-level strategic planning while ensuring the team operates efficiently.

Leaders in established companies also face the challenge of change management. Though the business may have a stable market position, external forces like technology shifts or economic factors often require restructuring or introducing new processes. Guiding your team through transitions requires finesse and confident leadership to maintain morale and performance.

Risk management is pivotal for companies with a long track record of success. While startups thrive on taking chances, your business must approach innovation and growth more cautiously. As a leader, your ability to balance innovation with the need for stability is key to long-term success. You make decisions that ensure the company remains ahead of the curve without jeopardising its existing success.

Shared leadership challenges

Whether you’re leading a startup or a large company, effective people management will always be necessary.

Employee development

Developing employees focuses on building their skills and nurturing collaborative relationships.

A recent study found that 79% of participants believed their supervisors to be effective managers of their work, while 67% felt their supervisors successfully supported their professional development. In startups, leadership style will more directly impact these figures. Since these businesses are smaller and less formal, managers will likely be more hands-on with mentoring and overseeing their team’s development.

Conversely, established companies have dedicated HR or department managers who handle the responsibilities of mentoring and training employees.

Communication

Leaders at every level must be excellent communicators. In both environments, managers need to convey a shared vision, provide regular updates and keep teams aligned. For startup managers, this means a high degree of transparency and flexibility in communication. With fewer hierarchical layers, you must be able to address challenges quickly and provide feedback.

In contrast, communication within larger companies may be more structured and formalised while maintaining clarity. Effective communication at this level requires strategising to reach all tiers of the organisation effectively.

Chart a course to leadership success

While company leaders may approach their responsibilities with different skills and styles, the core characteristic remains consistent – the ability to manage, inspire and align your team toward your shared goals. Ultimately, regardless of your work environment, you should base your leadership style on the unique needs and challenges each setting offers.