Personal Development for Entrepreneurs

Cultivating Authentic Leadership as an Entrepreneur

Authentic Leadership as an Entrepreneur

Cultivating Authentic Leadership as an Entrepreneur

Leadership is one of the most important skills for entrepreneurs to develop. As the founder and visionary behind a company, an entrepreneur’s leadership style sets the tone and culture for the entire organization.

Authentic leadership, in particular, is key for entrepreneurs looking to build sustainable, values-driven companies in today’s transparent business climate.

What is Authentic Leadership?

Authentic leadership is a type of leadership where leaders demonstrate and openly share their genuine selves, qualities and experiences with their teams. Rather than putting on a facade or conforming to expected leadership stereotypes, authentic leaders relate to others in an honest, vulnerable and trustworthy way.

There are four main components of authentic leadership:

  • Self-awareness: Understanding your own strengths, weaknesses, values and vision.
  • Relational transparency: Openly sharing thoughts and feelings to build trust.
  • Balanced information processing: Objectively analyzing all relevant data before making decisions.
  • Internalized moral perspective: Leading from a place of ethics and your moral compass.

Benefits for Entrepreneurs

There are many advantages for entrepreneurs who consciously develop an authentic leadership style.

  1. Builds trust and loyalty: By being transparent about who you are as a leader, you build trust and connection with your team on a deeper level. Employees are more likely to stick with a company when they feel aligned to the authentic values and vision of the leader.
  2. Attracts top talent: In today’s market where candidates can be selective about job opportunities, authentic leaders are more successful at recruiting and retaining top performers. Talented people want to work with leaders they can trust and relate to.
  3. Drives innovation: The open flow of information and ideas in an authentic culture fosters innovation. Employees feel safe to take risks and think outside the box.
  4. Weather hard times: During turbulent times, transparent leader-employee relationships provide a solid foundation to overcome challenges. Teams go the extra mile for leaders they know truly care.
  5. Healthier culture: Authentic organizations often have less politics, deception and toxic behavior because the modeled values start from the top-down.

leading entrepreneur

How Entrepreneurs Can Cultivate Authentic Leadership

Becoming an authentic leader takes time and conscious effort, but is invaluable for entrepreneurs looking to grow impactful, sustainable companies. Here are key tips:

1. Look inward first: Do the personal work to understand what your values, purpose, strengths and growth areas are through self-reflection, assessment tools and advisors you trust to provide honest feedback.

2. Get comfortable with vulnerability: Let go of the idea that you need to project a perfect image as the fearless leader and instead show your authentic self, flaws and all. Admit when you’re unsure, acknowledge mistakes, ask for help when needed.

3. Communicate vision clearly and often: As the entrepreneur, you feel the vision for your company deeply but don’t assume others grasp it as clearly, especially as you scale. Repetition of the vision in an inspirational way provides continuity and motivation during growth.

4. Encourage transparency company-wide: Make it clear across the company that you welcome diverse opinions and information to make the best decisions possible. Employees should feel psychologically safe bringing concerns and problems to light early so they can be addressed.

5. Align decisions to values: When facing difficult choices, refer back to your company, leadership and personal values to guide decisions from an ethical, authentic place.

6. Keep evolving: Authentic leadership is a continual journey of self-improvement and staying grounded as the world around you changes. Keep listening, learning and enhancing self-awareness.

Addressing Criticisms

While embracing authentic leadership has many upsides, entrepreneurs may face criticism in some cases for being “too real” as leaders. Some common concerns include:

  • Oversharing leading to loss of competitive advantage if sensitive information is leaked outside the company.
  • Admitting uncertainty or weaknesses making the leader seem unfit to successfully drive the company vision.
  • Letting emotion drive business decisions rather than logic and data.
  • Allowing too much casualness diluting the authority a leader sometimes needs to make difficult calls.

To avoid these pitfalls while still leading authentically, entrepreneurs should focus on maintaining appropriate organizational boundaries and understand where retention of competitive, strategic or legal information makes sense. Showing emotion yet backing decisions with data provides a nice balance.

Leaders can be real while still conveying the competence and influence to inspire teams when needed. With some experience finding authentic leadership rhythm, most entrepreneurs come to leverage transparency as one of their key competitive strengths.

Authentic Leadership in Action

Patagonia founder Yvon Chouinard built a billion dollar sustainable outdoor apparel brand with authentic leadership critical to the company’s DNA. From putting planet before profits, open book management style, transparent supply chain to treating employees exceptionally well – Patagonia lives up to its values in an authentic way.

Chouinard admits mistakes, shares power across the company and connects his personal passions with the organizational vision in an inspirational style of leadership.

Takeaway Tips for Entrepreneurs

Here are three key suggestions for entrepreneurs working to level up their authentic leadership abilities:

  1. Know thyself – Deeply understand your own values, strengths and blindspots.
  2. Be vulnerable – Don’t be afraid to share fears, admit uncertainty, ask for help and apologize for mistakes.
  3. Align decisions to values – Let your ethical compass guide all choices, especially difficult ones.

Authentic leaders build trusting relationships, and attractive cultures and drive meaningful outcomes. Rather than fake it as an entrepreneur, take the time to do the self-work and then boldly let your real self shine. Your employees and stakeholders will thank you – and likely reward you with their loyalty in return.