Start, change, reorganization – different stages demand different types of leadership

Researchers say there is no one type of leadership personality, but it is a question of the right type of leadership for different situations. That is why recruitment needs to focus on suitable leadership for each development stage of a company. 

Illustrations: Tim Lahan

Annukka Oksanen, 25.10.2019

Googling ‘leadership types’ in different languages makes it seem like fun and games for the masses, as the search retrieves dozens of ways to categorize leaders into groups between three to fifteen. Visionary, growth leader, reorganizer. Authoritarian, democratic, laissez-faire. Coaching, serving, go-getter. Charismatic, delegator. Strategic, transformative, team leader… Although researchers point out that a certain leadership personality does not exist, suitable leadership for different situations does. It is important to think about what type of leadership is best suited for each development stage of a company. 

At the startup phase, others need to be persuaded to believe in the vision. 

“The startup phase requires a crazy amount of faith to create something out of nothing. It’s easier to accelerate from one to ten than from zero to one”, Professor of Practice Lauri Järvilehto specifies. He has personal experience from founding a startup. ”Startup leaders need to make you believe in something that’s not even true yet”, Assistant Professor Timo Vuori adds. “They have an ability to imagine and make others believe. Or then they need to hire someone to do it for them.”

The startup phase requires a crazy amount of faith to create something out of nothing."

The growth phase requires organizational skills. 

”The growth phase is chaotic. It requires the leader to be familiar with metrics and key performance indicators and have operative competence. It also takes vision; Tesla, for instance, doesn’t stay afloat because of its numbers but its vision”, says Järvilehto.

How about the established phase? Järvilehto laughs that he is not sure how much the leadership style of an established firm is even needed now that everything is constantly changing. “But factually, many large companies are led this way.”

Change management requires stress tolerance and a clear direction. Järvilehto calls it ”wartime leadership”. He mentions how he has come to see the importance of keeping spirits up through his own work.
”If you arrive at work huffing and puffing, it immediately catches on. I used to think it was fake not to show all your feelings, but it’s not the case. It doesn’t mean polishing the surface, though.”

The leader of a mature, declining company needs to have empathy. 

Vuori says that an empathetic leader can fire people without destroying the whole organization in the process.

Leaders can also be boxed into categories like people leaders, product leaders, customer leaders, and business leaders. 

A business leader reshuffles when the economic cycle slows down, describes Järvilehto. The focus is below the line, which the leader uses to define his or her strategy and actions. 

A people leader does the opposite. Järvilehto mentions Kone corporation’s handsome dramaturgy during the period of Matti Alahuhta between 2005–2014.

”During the financial crisis, Alahuhta invested in retraining, innovation and product development while others were letting people go and cutting expenditure. He sought growth in a declining overall market. It was a genius move as the cycle turned.” A people leader puts people first. 

People leaders often stay out of the spotlight."

Another example of a people leader mentioned by Järvilehto is Supercell’s CEO Ilkka Paananen. “Paananen has claimed to strive to be the world’s least influential CEO. If you design the organization and recruit well, there’s no need to get involved. Leadership means getting involved only when needed. Paananen and Alahuhta have a strong human-centered approach and ability to get results. They take care of the organization and are systematic.”

Järvilehto describes Jeff Bezos from Amazon as a customer leader taken to the max. 

”Even the wellbeing of his own staff comes second. The main thing is to deliver the package to the customer on time”, Järvilehto points out. Another leader who puts the customer above everything else is Richard Branson from Virgin, whose main concern is to offer the best possible flight experience to customers. 

Steve Jobs from Apple and Elon Musk from Tesla are examples of product leaders, meaning the focus is on the product or vision determined by the product. 

”They are what hero myths are all about. People leaders often stay out of the spotlight, as taking care of the preconditions doesn’t look so interesting on the outside.”

This story is part of a long form story called "How to choose the best possible leader for different situations?"

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