
How Much Does Leadership Actually Matter in a Startup?
The Leader's Roles
We tend to see startup entrepreneurs as visionary leaders, coming up with the ideas, directing the team and ultimately taking responsibility for the success or failure of a company. And, yet, there are countless examples of companies with good ideas that have failed because of poor leadership, and companies that have thrived despite merely decent ideas. At least, that’s the general perception.
But before you put too much pressure on yourself to be some inspirational, charismatic gift of a leader, let's explore exactly how much the “leadership” factor actually plays in to the ultimate success or failure of a company.
The leader's roles
First, consider the roles a leader plays within a startup organization:
Idea generator. It’s the leader's job to come up with new directions and new possibilities for the organization (and solve tough problems).
Decision-maker. When it comes time to make a hard decision for the company, the leader is the one who has to make it.
Team-builder. The leader hires, fires and inspires people to work their hardest under his or her banner.
Image-maker. The leader is also the figurehead of the company and the “face” of the brand.
There are undoubtedly other roles that a leader plays, but these are the primary influential ones. And all of this is nice in theory, but how much of an impact does it actually play?
The scientific viewpoint
According to one Harvard study, the significance of “leadership” is actually misguided. Examining arguments ranging from “leadership doesn’t matter at all” to “leadership is the only thing that matters,” empirical research has shown that what is important isn't the consistency in leadership at a company so much as the degree to which leadership is exhibited during critical moments.
As an example, if you tend to be somewhat distant from your employees, and you frequently procrastinate in making decisions, such inactions may not matter as long as you step up during stressful times or react well to a crisis.
The issue of 'luck'
Another study suggested that a CEO’s performance isn’t entirely measurable in terms of his/her leadership ability, or diligence or any other factor that is isolated. Instead, the research suggested, a significant chunk of objective performance can be attributed to the outcomes of random factors -- a fancy term for "luck." This study suggested that anywhere from 2 percent to 22 percent of a CEO’s performance is reliably attributable to luck, depending on the industry of the business.
Source: entrepreneur
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