As an entrepreneur, you must be capable of adapting to many different work environments and leadership situations. While many business owners feel most comfortable using a more autocratic form of leadership, where checks and balances keep a hierarchy in place, this structure is often stifling and counter-productive for more creative organisations.
One popular alternative to the top-down approach is delegative leadership. By entrusting your most important decision-makers with the freedom to make their own choices, you may be able to increase efficiency and make your company more profitable. To illustrate how, let us look at six examples of delegative leadership, and how their adherence to this method enabled success.
What is Delegative Leadership?
First, though, it is essential to understand what precisely delegative leadership is. At its core, delegative leadership is about empowering employees to make decisions and then carry them out. It is often employed in creative-minded sectors, although it can be applied to any business type. The most important thing to make it work is that you recruit and build as strong a team as possible, and then let them loose.
One of the balancing acts of delegative leadership is how far the scope of empowerment extends. Your company, depending on its size and structure, may empower employees on a departmental, team or individual level.
What Type of Businesses Benefit from It?
As mentioned, there is no right or wrong industry for delegative leadership, as its success is contingent on the individuals within the organisation. However, there are some businesses that are more likely to see positive results. These include:
- Creative Businesses – If you are running a company that requires key creatives to produce results for clients, then it is often preferable to entrust your experts with the power to make their own creative calls.
- Research and Development – Industries that depend on long periods of research and input from experts or scientists often need their own timetable to complete projects successfully.
- Design Firms – Design companies depend on creative input and expert analysis to build products successfully. While some design firms do work autocratically, others encourage freedom.
- Venture Capital – In the same vein, organisations that depend on predicting unpredictable markets sometimes benefit from relaxed leadership.
The key is to ask yourself if an abundance of structure is restraining your employees. If so, then ask yourself if you feel comfortable in allowing your team to achieve their goals with minimal oversight. The latter can be a particularly difficult concept for business owners to embrace, but if you are honest and the answer to the first question is "yes", then you should consider a less restrictive form of leadership.
Examples of Delegative Leadership
To see how delegative leadership can be applied in practical terms, let us look at some key examples of the concept in action, and see how it has benefited organisations in the past.
1. Robert Noyce
The technology giant Intel is an excellent example of how delegative leadership can create a pathway to significant success for a research and development focused organisation.
Founded in 1968 by Robert Noyce, Intel used a hands-off management style that helped attract the highly skilled engineers that would make the company a household name. Two of these, Andrew Grove and Gordon Moore, would thrive under Noyce's freedom, with the latter establishing Moore's Law, an essential principle in modern technology growth.
While Intel is a shining example of what is possible with an effective delegative leadership approach, it is worth noting that once the company began to grow into a commercial behemoth in the personal computer market, its leadership style changed. It would gradually adopt a more authoritarian structure, which is a common theme among startups that outgrow their initial offerings.
2. Andrew Mellon
While Intel may have eventually outgrown its delegative leadership style, that does not mean that this approach cannot be effective in larger companies, too.
Andrew Mellon was a US businessman and industrialist (and later politician) who grew a vast conglomerate, the basis of which was built on placing trust in his management teams to run their own divisions.
By leaving business operations in the hands of those who knew them best, Mellon was not only able to amass a large fortune, but also to create a wide-ranging empire, with significant interests in the shipbuilding, chemical, and energy sectors.
3. Warren Buffet
A more modern example of delegative leadership can be seen in the investment and business dealings of Warren Buffet. Known globally as one of the world's premier investors, his company, Berkshire Hathaway, owns significant portions of some of the most valuable brands in the world, including Coca-Cola and Apple.
In practical terms, though, Buffet is an astute leader who expects his employees to take responsibility for their decisions and actions. He values mentorship and education over authoritarian task management, and keeps business decisions squarely in the hands of the companies he has invested in, instead of trying to influence their paths after buying in.
4. Paul Allen
Paul Allen's story is a great example of how a business owner can transfer delegative leadership skills from one organisation to another. The co-founder of Microsoft, Allen decided to leave the company in the early 1980s as it began to assume a more authoritarian management style in line with its success.
He then began investing in various enterprises through his business management firm, Vulcan, with investments in areas as diverse as real estate, space exploration, and media. Arguably his most high-profile properties were sports teams, however, with majority stakes in the Portland Trail Blazers NBA franchise and the Seattle Seahawks NFL franchise, as well as a minority stake in the Seattle Sounders MLS franchise. Although his status as owner made his sign-off on trades and free agents critical, he very rarely interfered with choices made by his coaches, bowing to their expertise. Prior to his death in 2018, the Seahawks had won the coveted Super Bowl, the most-watched sporting event in the US, while the Sounders are, to date, the most valuable franchise in the MLS.
5. Ronald Reagan
Delegative leadership is not only observed in the business world; it has an important place in many fields, including politics – as former US president Ronald Reagan proved in the 1980s.
Reagan was mocked during his election campaign for his inexperience in day-to-day politics and government management. However, when he arrived in office, he made up for these deficiencies by entrusting key economic positions to industry leaders from Wall Street. In addition, he is remembered for assigning an unprecedented amount of power to his Chief of Staff and other secretaries and, while Reagan is a somewhat controversial historical figure, he can certainly be remembered as an influential delegative leader.
6. Jack Welch
Although known primarily as more of an authoritarian, there are still elements of delegative leadership in Jack Welch's story. As CEO of GE – one of the most important companies in the modern business world – Welch's strategy of making acquisitions in emerging markets and finetuning their output made the company one of the most powerful in the world by the time of his retirement in 2001.
Welch found many ways to manage during his tenure, but he displayed delegative leadership when it came to GE's acquisitions. Although he held high standards – and the consequences of his subordinates failing to meet these could be brutal – he knew that the key to building these companies into more profitable entities was in letting their people manage themselves.
While it is undoubtedly a tricky balance to get right, there is no doubt that delegative leadership can enable your team to accomplish their own objectives. If your company depends on key employees being allowed to do their own thing in order to obtain success, then it could be the secret to unlocking higher levels of productivity and employee happiness.
What do you think? Is delegative leadership too risky, or is it an effective motivational tool? Let us know your thoughts in the comment section below!