Mar 03, 2018

Study Shows Hands-On Management Can Save Your Startup

Recent research from the Harvard Business School shows the best-performing startups have founders with a hands-on management style. Founders who adopted a more intensive management style saw 19.6% fewer employees leave their firms and became 20% less likely to fail. For a startup, that’s no small feat! So why aren’t more founders embracing this startup-saving leadership style?

The blurry line between hands-on management and autocratic leadership often leads well-intentioned founders into the dangerous realm of micromanagement. “It’s easy to confuse hands-on management with micromanaging,” said Rembrand Koning, a professor behind the research. “No one wants to work for a boss who’s doing everything or giving (workers) only the bad parts of the task,” he says.

Successful founders are finding a happy balance by adopting an empathetic leadership approach, a concept known as “servant leadership.” “It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead,” said Robert Greenleaf, the man who coined the term. Companies like Zappos, Whole Foods and the Container Store attribute their success to this unique management philosophy.

“Being a servant CEO means inverting the traditional organizational chart and putting the CEO at the bottom,” said Sameer Dholakia, SendGrid CEO. Sameer spends about half of his working hours meeting with employees, checking in to provide feedback and see where leadership can help.

A study conducted at the Jason’s Deli national restaurant chain proved stores with servant leaders experienced the following positive outcomes:

  • 6% higher job performance
  • 8% increase in positive customer service ratings
  • 50% higher staff retention rate

Although servant leadership may appear at first to be an oxymoron, these results make the effectiveness of this management style hard to refute.

Hands-on management with a servant leadership emphasis can give startups the employee retention they need to gain traction and succeed. If businesses lead by caring for their people, the profits will take care of themselves. And what better time to build a corporate culture of caring than from the early startup stages?

Applying is free and it won't impact your credit

About the author

Jesse Sumrak
Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He's created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he's not dabbling in digital marketing, you'll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.

Quickly Compare Loan Offers from Multiple Lenders

Compare Offers
from 75+ Lenders

Applying is free and won’t impact your credit
Talk to a rep at (855) 853-6346

Mon–Fri | 7:30am–5pm MST