Leading by Example as an Entrepreneur

Anyone can be a CEO or a founder if they start a business, but the title of leader is earned. True leaders know how to inspire others and get the most out of the individuals on their teams. 

What’s their secret? 

While each person has their own unique strengths, most successful leaders know how to lead by example. They don’t just talk a big game — they deliver when the time comes. 

Most importantly, they win the trust of their employees by putting in hard work and committing to the core values they espouse.

What does ‘lead by example’ mean?

When you lead by example, you demonstrate the type of behaviors and actions you want to see from your team members. In other words, you’re not just talking about your company’s vision — you walk the walk by acting as a role model.

For instance, if attendance and punctuality are something you want from employees, you show them that by always showing up on time for work and meetings. 

Why is it important to lead by example?

Leading by example can create several positive ripple effects in your organization. Culture, morale, and performance all benefit from effective leaders. 

You earn the trust of your team members

It’s hard for people to trust their leader when they say one thing and do another. Your workers are more likely to trust what you say when your actions back up your words. 

You improve employee engagement

Greater trust between employers and employees can boost morale and motivation. A recent Gallup study found that workers who greatly trust their company’s leadership are 4x more likely to be engaged at work. 

You create a better company culture

As a leader, you’re responsible for setting the tone of the work environment. If you’re open, honest, and trustworthy, you create a healthy working environment that values transparency and teamwork. 

Establishing a great environment can also boost your employee retention rates. According to Great Place to Work, companies that rank on the Fortune 100 Best Companies to Work For list experience 50% less turnover than the average company.

You increase performance

High employee engagement levels can create benefits across your organization. Gallup found that companies with the highest levels of engagement had 18% higher productivity levels and 23% higher profitability than those with the lowest levels. 

What happens when you don’t lead by example?

Companies with poor leadership rarely last long. That’s especially true for startups and new businesses. 

Here’s what can happen when you don’t lead by example.

• Turnover increases
• Absenteeism increases
• Employees don’t trust or respect you
• Employee morale and motivation decline
• You often become the bottleneck in your own company
• Your teams struggle with decision making and productivity
• You have a hard time creating a sense of community in the workplace

Over time, your company culture will become based on suspicion and self-interest. And that’s no way to turn your vision into a thriving operation. 

Lead-by-example leadership styles

While there are many leadership styles to choose from, some lend themselves better to leading by example.

• Servant leadership: Servant leaders put their team first and create an environment where everyone can thrive and grow. They do this by leading with empathy, listening to others, and persuading instead of giving top-down orders. 
• Participative leadership: Also known as democratic leadership, this type of leader makes decisions by considering the input of their team. This encourages participation and creates a sense of influence for employees.
• Transformational leadership: These leaders are inspirational team players. They embrace change and give their employees a safe place to think creatively and find innovative ways to approach problems.
• Strategic leadership: Strategic leaders focus heavily on the company’s future goals. They visualize a path to reaching those goals and know what to do in the present to help their teams grow. 

Strategic leaders often adapt their leadership style to give their team what it needs, such as freedom to innovate or a clear top-down strategy.

These four leadership styles rely heavily on trust to build authority. As such, setting an example and acting as a role model can make you a more effective leader by using any of them. 

How to lead by example

1. Deliver on your promises

Most entrepreneurs know that delivering on promises to customers is key. Good leaders know that this also applies to promises you make internally. 

Make it a habit to deliver on your promises and demonstrate the core values you set for your company. If something changes and you can’t deliver, be transparent and communicate it as soon as possible. 

2. Respect the organization’s hierarchy

Gaining trust with your initial team of five is much easier than keeping the confidence of a team that grows to 100 and beyond. As your company scales, creating an organizational hierarchy provides the structure you need to support a growing workforce. 

Once you put someone else in a leadership position, like a director or manager, it’s important to support that hierarchy by not undermining their position. 

For instance, if you want to make a change to your product, go through the chief technology officer (CTO). Don’t go straight to their team and ask for something different than your CTO did. 

That also means you need to avoid micromanaging the leaders you appoint. If you trust your leaders, their teams will, too.

3. Listen to others

If you want people to listen to you, lead by example and listen to them. Listening is one of the most underrated leadership skills — just because you can hear what people are saying doesn’t always mean you’re listening. 

You can set a good example of active listening by eliminating distractions (yes, your phone) in meetings, maintaining eye contact, letting people finish before you talk, and asking clarifying questions. 

4. Follow the rules you set

Being a leader may mean you get to set the rules. It doesn’t mean you’re above them. 

In fact, it’s the opposite. You have the responsibility to demonstrate the standards of behavior and performance you set. 

“When you adhere to the standards you set, your employees will feel respected and equal in the workplace,” Eric Dalius, executive chairman of content discovery platform MuzicSwipe, says. 

Doing so also encourages them to follow your lead and aim to match your work ethic. 

5. Ask for feedback

Agile workplaces are environments that foster continuous improvement. As a leader, you can demonstrate this value by asking for feedback on your own performance. 

Larissa Pickens, founder of fragrance website Everfumed, recommends that leaders regularly seek feedback from their teams and “listen to their concerns, suggestions, and ideas without judgment.” The real key, she adds, is to “take action based on the feedback you receive.” 

Showing that you’re open to feedback and learning will make it easier for your team members to receive criticism without feeling insecure or attacked.

6. Take care of your well-being

When your company is in its infancy, it’s tempting to sacrifice everything to keep it going, including your health. But that’s not sustainable. If you’re consistently sacrificing your well-being for the company, your employees will learn that’s the expected behavior. 

In a Sifted survey, 87% of startup employees reported that their mental health was negatively impacted by their work, which includes experiencing burnout. When it comes to valuing your employees, you have to start by valuing yourself.

When your team sees you prioritizing your mental health, they’ll feel that they have permission and the responsibility to safeguard their own. You can take steps to do this by leaving the office at a reasonable hour, not responding to emails around the clock, and taking vacation time.

7. Understand that consistency is key

Trust isn’t built overnight. It’s based on the actions you take over time. As such, none of these tips will work well if you only do them once. If you want to be a true leader, you have to be consistent. 

Showing up on time once doesn’t set a standard. Showing up on time for every meeting shows commitment to your values and encourages others to do the same. 

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