“Coming together is a beginning, staying together is progress, and working together is success.” — Henry Ford
Every startup is composed of a team and leadership. Much is said about each of them separately, however, organizational complexity, innovation and disruptive changes lead us to propose using the concept of “team leadership” as a value proposition in startups.
The startup founder is the leader who induces others to act to achieve a common goal. Traditionally, leadership has been conceptualized vertically in three dimensions:
- Trade VS Behavior base: A trait-based approach to leadership relies on the premise that leadership is an inner attribute that cannot be learnt; it is almost a matter of the person’s genes. Contrary behavioral approaches hold that leadership can be learnt. Startups have proven this last point to us.
- Technical VS Adaptive: Technical leadership is focused around technical knowledge where the problem definition and solution are clear and there is a hierarchical authority. On the other hand, adaptive leadership deals with ambiguous problems which require learning. This is one of the main characteristics of successful entrepreneurs. The pandemic has been a filter to separate technical leadership from adaptive leadership.
- Universal VS Situational: The universal approach is based on the applicability of leadership without taking into consideration the situation. Finally, the situational approach, used by successful entrepreneurs, considers external factors as well as group dynamics and holds that leadership varies according to the situation.
Traditionally the conceptualization of leadership has been: Top Down or Bottom
The top-down leadership model supports the traditional definition of leadership, where the leader is the “superhero” with unique characteristics that influences the followers. Thus, influence is exercised downward from a single leader toward the subordinates. This is the most common perception of leadership held by people from diverse industries, including startups.
Contrary to the above in the bottom-up model the influence is exercised in the opposite direction from the followers toward the leader, who does not have an independent view or imposes his/her influence on others. Therefore, a “leader” in this model is in name only.
Today there is a new model of leadership, called team leadership, defined as the “individuals” purposeful efforts to influence their team and its members toward the achievement of objectives and goals. (Zigert)
Due to the new reality in the dynamic entrepreneurial ecosystem where the teams and not the individuals are the basic unit of production, the solo leadership is ultimately inefficient and ineffective, with a high risk of serious error. No one founder or team member, no matter how gifted, has the relevant information to make every important decision and can be right all the time (Pasternack, 2001). As the startup grows and becomes a large organization, Team leadership could be the answer towards its organizational complexity.
When team leadership is applied under the right conditions (collegiality, mutual trust, and respect) it creates an environment where ideas, energy, and enthusiasm can circulate freely and that will enhance innovation (Herb, Leslie & Price, 2001). Problem solving capacity will be enhanced within the startup, when solutions are provided by people who have direct relationship with the problem (Clemmer & McNeil, 1988). Behaviors and roles may be performed by more than one individual at different times (Carte, Chidambaram & Becker, 2006). Thus, leadership is not exercised by a single individual, but is shared by team members of the startup and not only the founders.
Innovation is a way to differentiate and sustain competitive advantage. However, to promote innovation, even in startups, the organizational structure must be adequate and flexible. Past approaches to leadership have not allowed this flexibility. Thus, a new approach is needed, and team leadership could be the answer.
The startup founding team sets the basis of the organization and promotes Team Leadership that relies on organized group effort to achieve superior performance. Within team leadership each team member is responsible for structuring work processes, understanding and promoting interdependence between members and tasks, and developing a sense of individualized consideration (mutual trust and respect for each other’s ideas and feelings) (Carte, et al., 2006; Clemmer & McNeil, 1988). However, the survival of team leadership will be challenged by different processes occurring at various stages of team dynamics throughout the life of the startup. The ability of team members to manage these internal and external conflicts affects problem solving, creativity and the ability to achieve desired performance outcomes.
So, the challenge of a founding team is not only to find the best talent, but to get the best potential out of them. Team Leadership is a leadership model to dynamically and efficiently manage the startup through its growth cycles. Founders should avoid labeling jobs from the beginning and not lose flexibility as the startup grows into a large corporation.
“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.” — Andrew Carnegie
ACV is an international Corporate Venture Capital (CVC) fund investing globally in Startups & VC funds.
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