How leadership influences the organizational transition from startup to corporation.


The organizational transition from startup, mostly a loose structure of flat, organized ties among founders and the rest of the team, to a much more hierarchically organized corporation with clear processes and areas of authority, is a rather underdeveloped field in leadership theory. Davila et al. (2010) investigated 78 Californian startups with 50 and 100 employees each, with many of them backed by venture capital. Results provide that startups that put a stronger focus on formal management styles performed better in terms of growth and size. However, there is limited research on this. Further, their research emphasizes on management systems and less on leadership.

The more startups are founded, the more important leadership theory becomes to successfully accompany the transition from a young startup to a more mature corporation.

This research aims to investigate the current leadership practices of startups during organizational transition and the outcome of these. This will require a focus on the strategic development of the organization, particularly on terms of team and revenue development. Also the impact of the corporate culture on leadership and vice versa, will be analyzed.

In the third year after foundation, startups usually witness an organizational transition from a mostly loose structure of flat, organized ties among leaders and employees to a more hierarchically organized corporation with clear processes and arranged authority. The impact in both directions, positive and negative, can be immense (Davila et al., 2010). However, even though there is good, qualitative research on the fields of leadership, this particular stage in organizational development is still rather underdeveloped.

Also, past research has not fully demonstrated how leadership is associated with organizational performance, i.e. revenue development for instance (Carter & Greer, 2013). However, this is one of the main objectives of the research. The author would like to examine which leadership approach has led to the greatest performance during and after the organizational transition from startup to corporation. Only then, future startups and all stakeholders can benefit from the research by understanding the importance of leadership and its effects on organizational performance.

Research questions

In short, the following critical questions will be addressed:

• R1: What kind of role does corporate culture play for leadership in the examined startups?
• R2: In which way do leadership practices affect the organizational transition in the examined startups?
• R3: How well have the examined startups performed under certain leadership practices?
• R4: What improvements can be made to existing leadership initiatives with regards to the corporate culture?
• R5: What are the general leadership trends in the startup scene?

Research objectives

One of the objectives is to understand the leadership actions that are taken during transition fit with the existing corporate culture. For this, the characteristics of the organizational culture will be first analyzed and second, a review of the actions will be conducted to observe if there is conformity with each other. The importance of culture becomes evident when looking at the study of Aguirre et al. (2013), in which 84% of all participants (2,200+) believe culture needs to be considered when organizational change takes place, hinting to its importance for the success of the organization. The study reveals that there is a general need for more culturally oriented management approaches.

Also the type of leadership and its development since the beginnings of the organization will be evaluated to better understand the current practices. This will lead to essential insights, e.g. if there is a democratic, participative leadership in action or a non-democratic, non-participative leadership style. Under certain circumstances both of them can be very efficient. In the following, it will be revealed how much standalone power the CEO owns in terms of recruiting. It will also become evident if the current team is ready for transition or if different types of employees need to be hired. The outcome of these two will ultimately lead to a better understanding of how conflicts are addressed by leaders and/or HR departments.

Corporate culture can play a decisive part in organizational success as Aguirre et al. (2013), Wang (2015) and Northouse (2013) show. If the existing corporate culture does not leverage the transition approach, the organization may face an identity crisis with parties and ideals in steady clash. The outcome of using the same measures for different corporate cultures can lead to completely different results. Stagnation in development, open conflicts and even loss in reputation are potential outcomes in one case. Increase in revenue, team building and operational efficiency on the other (Davila et al., 2010).

Known leadership theory and practices will be analyzed. This will range from general theory provided by the likes of Pasmore (2009) and Northhouse (2013) to future developments and psychological empowerment models by the likes of Avolio (2009) and Houghton & Yoho (2005). Coherently, qualitative interviews with multiple stakeholders in the startup ecosystem will be conducted, including founders and employees.

Interview questions

The interview questions have been selected to address the five research questions of this study. The five research and therefore interview questions conducted on the startups are:

Question 1
What kind of role does corporate culture play for leadership in the examined startups?

This question attempts to dKeefine the leadership style that is used in the startup and the reasons behind it. How does it make itself visible in the organization and which activitiesthat demonstrate its role.

Question 2
In which way do leadership practices affect the organizational transition in the examined startups?

Question number two wants to examine the effects on organizational performance such as revenue development, traffic growth or time efficiency on the one hand, and team evolution such as role changes, team morale, employee satisfaction and level of innovation on the other.

Question 3
How well have the examined startups performed under certain leadership practices?

This question covers two dimensions, number one being the interviewee’s personal perception and number two being validated, approved data that shows the impact from a data driven perspective.

Question 4
What improvements can be made to existing leadership initiatives with regards to the corporate culture?

Question number four once again examines two dimensions, organizational performance as well as team evolution. However, the focus is not on how leadership practices have already affected the organization or corporate culture in particular, rather than how they can still be improved.

Question 5
What are the general leadership trends in the startup scene?

The last question focuses on the future of leadership and how it might look in general, on a large-scale basis. Interviewees contribute their personal thoughts on this and thus give the author a better understanding of current trends.

Interview analysis

Interviewee 1

Personal background

Interviewee number one is the Co-Founder and current CEO of a hardware startup. He is male, 39 years old and has technical background. After finishing his studies, he co-founded his first software company in the automotive industry. He observed that the industry is still very inefficient when it comes to real-time asset monitoring to optimize workflows. As a result the idea of changing the way data is acquired and his new startup evolved.

His role as a CEO is to drive the overall vision, team management, product development, marketing, sales and everything that relates to close-to-market activities. During his time, the company changed into a sales-driven company, where the product is built by the requirements of the market. Clients come from the B2B area. In five years the company has grown from three to 20 employees.

Question 1

The interview believes that corporate culture plays a major role for leadership. There is no scientific approach behind used leadership practices. However, according to the interviewee the company would have not been as successful if leadership did not play a major role.

Furthermore, the product is very complex and combines hardware and software features. Yet, team resources are rather limited and therefore leadership practices even more essential.

The interviewee describes the current leadership approach as vision centric, where the leader is coaching employees on goals, planning, tactics and execution. There is management by objectives. Without a clear vision, it is impossible for employees to follow and understand the frameworks they are working within and thus, achieve the goals they are expected to meet. Role models like Apple co-founder Steve Jobs are used for guidance and constant reading of leadership literature is being practiced.

In the last years, several visions have evolved over time, which also led to misunderstandings and controversies. This was the result of several co-founders with different leadership approaches. Facing frustration, they decided to form one universal vision. Even though, there are several co-founders, the company also highlighted one clear, determined leader who sets the direction and monitors all corporate goals. There is often the impression among employees that these are not feasible. As a result, the CEO regularly meets with his employees to discuss the feasibility and push them beyond borders.

There is a range of further leadership principles that are actively practiced:

• Be an authentic leader.
• Be a role model for employees.
• Lead by example and work harder than anyone else in the company.
• Technically challenge employees when it is necessary.
• Leadership is not static, but dynamic and constantly evolving.

Question 2

In early 2016, the organization started its transition. Since then, it has significantly affected the company. First, there was a negative impact on organizational performance and team evolution. However, this changed over time and the new leadership approach turned out to be positive in the long run.

Changes had to be undertaken as goals were not met and stakeholders such as investors became dissatisfied. They asked for change and a more data driven mindset. Also, there was a lack of communication regarding the corporate vision. This led to frustration in the team, however, once certain changes took place, employees started questioning themselves and insecurity was dominating. One Co-Founder eventually left.

One of the changes was the implementation of quarterly reviews where the strategy is challenged within mini pivots. This became necessary, as former leadership practices did not have the expected effect on performance. Now, there is more transparency and thus, less insecurity within the team. The positive effects have ultimately prevailed.

Question 3

When it comes to figures proving the positive development, the interviewee mentions revenue. Before changing the leadership style, overall revenue and revenue growth were poor. In this regard, data is the key indicator. Apart, team performance and overall quality were also considered poor and presumed as reasons for underperformance.

The main reason for the dissatisfying organizational performance however, is expected to be the lack in strategic focus. As mentioned before, there was only a limited amount of human resources available. The company was not having a clear and unified vision, which affected strategic focus, which again affected team performance, quality of work and ultimately revenue.

Changing to one determined leader, who sets direction and tone, resulted in more objective and execution driven strategies. As data shows, revenue is growing again as is the market responding to the progress in product development.

Question 4

On the one hand, the Objectives-Key Results (OKRs) model, which is practiced by Internet giants such as Google and LinkedIn and on the other, the Vision-Values-Methods-Obstacles-Measures (V2MOM) model practiced by Salesforce for instance, are used for orientation. OKRs focus employees on individual goals that easily connect with the overall corporate goals. This approach is supposed to make employees understand why they are doing certain tasks and how these contribute to the company (Jackson, D. 2015).
Similarly does the V2MOM model with an even stronger emphasis on the purpose (Jackson, D. 2015).However, current OKRs are defined on a yearly basis and the interviewee hopes to make an even clearer roadmap by introducing OKRs on a quarterly basis. This comes with and even more data driven mindset and clearer communication.

In reference with the V2MOM model, it is also planned to focus more on why it is relevant for employees to do certain things, i.e. manifesting the purpose behind each task. This needs to be undertaken to convince everyone in the team why certain actions are taken. As this has a strong emotional component, soft-skill initiatives are imminent. In this regard, the interviewee introduces a list of several soft-skill initiatives:

• Being authentic at any time
• Continuous self-improvement, including the management
• Letting employees know that the CEO has full trust in them.
• Understanding the private goals and interests of all employees.

Besides, work-life balance is an issue as half of the workforce has children. There is a wish for more flexible working including working at home or remote.

Question 5

The interviewee believes that leadership is generally underestimated in startups. There is currently a vigorous emphasis on hard data, e.g. business plans that often prevents founders from developing their own leadership skills. Based on this, the interviewee currently observes three trends that need or are about to happen.

First, there is a need for more visionary founders with higher ambitions. Similarly to startup hubs in Berlin or Silicon Valley, local founders will start asking for more funding and international markets.

Second, startups will exchange their leadership experiences within a trusted network, in order to learn from each other.

Third, the market needs more leadership coaches who involve themselves at early-stage. However, these should be people who have made experiences under similar conditions, e.g. Business Angels. Experience only is therefor not enough and could lead to cultural clash. In exchange, these mentors would earn shares over years.

Interviewee 2

Personal background

The second interviewee is also from the same hardware startup as mentioned in interview 1. She is a female office management assistant working under the current CEO. She first attended commercial high school before she later left for the polytechnic school. The connection between the interviewee and the CEO of the startup was sparked by the recommendation of her aunt. The interviewee plays a critical role in the management of the company. She has specialized in bookkeeping, logistics and human resourcesand is also coordinating the purchasing operations.

Question 1

The interviewee believes that leadership is not that strongly visible due to the fact that the company is headed by a single executive. This is also challenging for visiting clients or members of the public who often do not recognize the one leading the organization. The interviewee also points out that the CEO is not very strict in the coordination and running of operations when compared to the prior head.

The driving force in the execution of the organization’s operations is normally fueled by the ability of the employees and the subordinate to possess the virtues of self-management and self-responsibility across all the departments. The drive towards the achievement of the goal is provided by the sophisticated technological approaches emulated and adopted by the company, therefore favoring the better process efficiency.

Question 2

Regardless of the fact that the interviewee did not recognize much, her perception was that there was no change from the transition of startup to corporation. The only sure information or situation the interviewee seemed to be aware of was the presence of the initial problems, which were later effectively and efficiently addressed.At present time, the achievements brought by the measures and the strategies applied to ensure the resolution of the problem are evident. Among the indicators of the change and the success are the growing numbers of employees in the organization, which implied that more work was set to be done.

Question 3

When it comes to evaluating the implications of self-management spirit in the organization, the interviewee points out that it will positively contribute to the growth of organizational operations by ensuring faster execution of tasks. Moreover, the CEO also has a crucial role to play in the delegation of the duties to the rest of the employees to ensure that the workload is less for him. Based on her response on the past experiences, she stated that she had hardly anything to do, thus resulting in aboreout. Her morale was boosted by the incorporation of the new changes that made her feel that she was positively contributing to the development of the organization. She clearly mentions thatthe changes that were made have brought her a feeling of contributing something more valuable and bigger. Hence, she also started feeling more appreciated.
Question 4

The interviewee adamantly believes that there is a need to have a second executive, apart from the CEO, particularly in the sales sector. The situation in which only one individual makes all the decisions is clearly not appealing to the interviewee because decisions can take very long due to the power delegated only to a single individual. The interviewee stated that task sharing is the most appealing and the most efficient approach in the organization.

The accessibility of the CEO for consultation is also very limited by the large workloads, therefore, leading to frustrations in most cases. The reduced employer-employee interaction frustrates the subordinate staff.

Question 5

Pertaining the appropriate kind of leader, the interviewee was clear that the leader should be touchable and should have the ability to spend time with employees. For this, it requires a better coordination of operations. She adds that leadership influences structures and processes at a very early development stage. Therefore, leadership sets the foundation in the inception period of businesses. Trends will show that startups will focus much stronger on leadership at early-stage to ensure later success.

Interviewee 3
“The organizational transition from startup to corporation: How does leadership influence transition in Austrian startups?”

Personal background

The third interviewee already ventured into the entrepreneurial activity at 17 years while still attending school. He was sellingfood products. He then later indulged in events management. After finishing his studies, the interviewee co-founded the e-learning portal Courseticket, where he acted as the CEO and head of sales. He went on to become a startup business angel and founder of his current startup, a network that connects investors and startups. He is the CEO and covers all activities related to sales, partnership management, human resource management, corporate strategy, financial planning and team management.

Question 1

The interviewee has not thought of the corporate culture as a force that can be influenced in the organization. He believes that it builds itself up since you cannot force the people to behave in a certain way. The organization lacks guidelines and corporate culture evolves naturally. He believes in self-responsibility and self-management and does not want to tell people what to do. His leadership approach is to get assisted by the subordinate staff who tells him what to do. He also emulates the leadership style where one hires people who are better and more gifted than himself.

Question 2

His perception is that they have improved the performance of the team by tracking KPIs in a very transparent approach. Important indicators are the total number of investors in the network and how many calls and meetings have been conducted to address their needs. These are constantly monitored and reveal very positive developments. The interviewee wants figure out the appropriate measure of improving themselves and states that the employees themselves can also contribute to the improvement. He also explains that the operating team comes very well along with each other and creates a good working atmosphere, which also effects corporate success. However, he cannot tell if leadership is responsible for this.

Question 3

He believes that delegating responsibilities sound good, though, in the beginning, it did not work because common goals were lacking. Therefore he had to sit down and come up with goals that giveemployees a sense of direction. After forming the goal, everything started working our as expected. As per the validated data statement, everything in the company is more efficient than before. By delegating certain responsibilities to employees, he is able to figure out if the employee is good in particular areas or not. For instance, one is more gifted in direct contact with investors and presenting him- or herself in general. By monitoring goals and KPIs, one can detect potentials and use them for the organization.

Question 4

The CEO reveals that he still invests time talking with the people and also holds private related conversations with them. The conversations do not only focus on tasks or numbers, but also on celebrating success that covers professional, but also private life. Employees gave him input on this by revealing that they want to celebrate whenever something good happens. Sometimes, they even celebrate on their own.

Question 5

The interviewee believes that there is a huge lack of leadership and presence of irresponsibility because many people do not see what degree of responsibility is attached to leading a company. Usually, startups only have two or three co-founders as only a few people in the company are ready to take over responsibility. Instead, they hire business angels who can take over some of the responsibility. He describes that most of the startups do not think about how to lead strategically – they just do it. Most of the people do not use the strategic leadership approach due to the lack of knowledge. The probable reason behind this is the lack of self-esteem and self-confidence. Moreover, nobody cares about leadership before starting a company. This might change because it is vital to the success of startups.

Interviewee 4“The organizational transition from startup to corporation: How does leadership influence transition in Austrian startups?”

Personal background

The fourth interviewee has a bachelor in tourism and leisure management and also holds a masters degree in marketing and sales in which she specialized in key account management. She has some international experience, e.g. she moved to Toronto for six months of internship. She was also an intern at a Berlin tech-startup, which specialized in app development. While doing researching on crowdinvesting for her master’s thesis, she met a friend who later connected her to the current CEO and co-founder of her current employer.She first was as the assistant to the CEO, but half a year later she was already promoted to the sales department. Since July 2016, she has been operating as an investment coordinator, i.e. managing and connecting investors with startups.

Question 1

The interviewee points out that the team is quite small and thinks that the corporate culture in her current startup is different from other corporations. The relationship in the company is more family-oriented than usual employer-employee relationships. The corporate culture puts an emphasis on working together and each employee contributes ideas. Also, everybody has the right to make his or her own decisions regarding tasks and activities. She believes thatcompanies in general tend to be more willing to delegatedecision powers to employees.

Also, her CEO and the management trust in decisions that are made by their employees. Particularly the CEO emphasizes on self-management and self-responsibility and in the following, follows a trust oriented leadership approach. The reason why the CEO is willing to delegate more responsibilities is because it motivatesemployees and makes them fell appreciated. As a result, employees have a stronger and more emotional relationship to the organization.

Question 2

Considering organizational performance, the interviewee thinks thatit is important for the company that their leaders remain managerial protagonists and that the employer-employee relationship does not become too friendship oriented. Leaders sometimes need to make decisions that employees may like or not. As far as it is in the favor of the success of the company, certain decisions need to be made.

In recent months, the organizational performance had positively affected the growth of the company. This was due to delegating some of the decision-making to employees and following a self-management approach. By doing so, tasks could be executed much faster. This type of leadership also makes her feel more appreciated.

However, she states that the CEO is a friend of hers and hence, this makes it difficult for her to handle some of his decisions. She also mentions that regarding the type of communication, talking to a friend is different than talking to the executive. In this case however, the CEO represents both positions, which makes it confusing how to approach him in certain decisions. Concerning the emotional effects on other team members, she outlines that it depends on how close the relationship is with the CEO.
Question 3

On the impacts of higher inclusion of employees in the decision-making, she elaborates that it has positively affected the company because tasks are executedfaster.

Comparing the leadership of the current CEO to other leadership approaches is not possible, as she had never had worked under different leadership styles before. Therefore, she finds it difficult to evaluate the current performances and cannot tell if the company would have performed better or worse under different conditions. Nevertheless, she believes that that the choice of organizational structure was a good decision and paid off for the company. In terms of organizational structure, she generally believes that startups tend to have less hierarchical structures than traditional corporations.

Question 4

She explains that it does not matter how small the company is, leaders are always required to make clear what the company’s corporate culture is. They also need to make time to regularly explainit to all employees.

To avoid misunderstanding,leaders should also make clear how internal communicationswork and specify whether it is flat or hierarchical in nature. Apart from leader responsibility, also employees have a duty to understand and internalize corporate culture.

Question 5

Regardingtrends, she first that some of the usedleadership approaches are very chaotic or there is not predefined leadership style at all. Very often leadership is based on the features and characteristics of founders only, i.e. founder-oriented leadership.

Generally, internal communicationis becoming even flatter and in the process, employees are asking for more flexibility in when and where to work. This means regarding working hours, working remotely, working on weekends and take off Mondays for instance.

Employees also want to discover more perspectives, thus switching from one position to another, i.e. internal job rotation. They are looking for more diversity in their tasks. Leadership needs to find the potential of each employee and create new possibilities. It will be important to ask people what they really like to do and put them into other departments. This will lead to higher performances in the end.

Interviewee 5

Personal background

Interviewee number five is a communications science and German studies alumni. She always had a strong interest in the psychological interactions of communication and mediation among human beings. After finishing her studies, she started working as a copywriter in the fields of content management and marketing. She gained experience at several ad agencies and startups.

Question 1

The interviewee believes that corporate culture plays an imminent role for startups because one cannot lead without knowing what the startup’s company is standing for. In addition, people also need to know about the overall goal. Where the goal is lacking there is a higher probability that they will get dissatisfied. Therefore it is crucial for the sake of good and loyal employees. It is alsothe motivation aspect number one. This is because if you as a leader do not know what the companies stand for, you cannot share it with your employees. Further, if employees are not communicated how the corporate culture looks like, they might have something different in mind that what they were initially looking for.

The interviewee also points out that in the actual startup there is no defined leadership approach because there are more volunteers right now as well as beings that have been friends before. Leadership is not only about leading others, but also leading yourself. In this respect, they have practiced some degree of leadership strategy. She believes that working efficiently requires leadership skills such as founders and management advocating on how to work together, use of proper and transparent communication, setting priorities and involvingemployees in decision-making. Otherwise, no outspoken hierarchy may result in chaos. Therefore, leadership is integral in every action a company takes, including marketing sales and strategy.

Question 2

The interviewee states that leadership development is increasing and hascontributed to developing the company. One of the results is the higher focus on providing the right offers and services to the target group. Consequently, the organizational performance has been and is still continuously improving.

In addition,leadership has led to focusing on the competencies of each employee. They have realized who is better at what and coherently, started diving tasks, positions and responsibilities. This has become possible due to the mutual influence and interaction between the social aspect of leadership and the professional aspect of doing business.

Question 3

The interviewee thinks that there is data that proves the influence of leadership on organizational performance. However, as there is no centralized knowledge management it is not clear to her which one validates the development. She is responsible for the creative part in the organization and does not put a strong focus on data. She believes that leadership is more affected by emotions rather than sheer numbers. Further, she thinks internal communication needs to be clear and does not lead to misunderstandings, particularly on an emotional level. Instead, her partner is responsible for data monitoring, but the lack of centralized knowledge management prevents them from having access to all information.

Question 4

The interviewee thinks that leadership initiatives and rules need to be written down. Until then, leadership is too abstractive and only in the minds of specific people. She thinks her company is missing this too and therefore, looks for a leadership approach that is written and based on agreements and values. This is relevant to current employees, but also to every new employee that joins the company and should be an integral part of the onboarding process. It is significant that everybody in the company knows exactly, who is responsible for what, what are they working on and how processes are defined.

Question 5

The interviewee reveals that flat hierarchies are present, but do not work out very well. According to her, people need structures and authorities to be efficient. However, they should not be overruled. They should have room for own decision-making and assistance when it is needed.

In former days, employees were usually at the bottom of the chain and did not have much to say. Professional relations were also more formal. Today, they are often informal and more personally. Employers also appreciate whenemployees take leadership on their own. These employees can work independently and only need someone whom they regularly exchange ideas with, similarly to a sparring partner. Leaders in this respect are more acting in coaching positions. There can be disagreements, but less overruling.

Trust relationship is mentioned once again. Employees need to have the perception that they are trusted in what they do. Too much control will lead to the opposite and work against the company.

Interviewee 6“The organizational transition from startup to corporation: How does leadership influence transition in Austrian startups?”

Personal background
The interviewee points out that they are a small team with three people currently working on full-time basis. In addition, four to six employees work part-time.

Further information will be added shortly.

Question 1

The team knows each other and members have been friends before or worked together. As a reason of this, current corporate culture is therefore defined by former friendship among employees, which is the reason for the strong spirit in teamwork. The interviewee however states, that friendship does not overshadow working relations.

According to him, leadership is determined by the CEO and founders of the organization. He believes leaders need to act as role model by work harder than anyone else in the company. This way, they will be a source of the inspiration and motivation and only then, followers will pursue same ideologies and common goals.

Regardless of position, interaction always needs to take place at eye-level. Teamwork can be promoted by not overruling others and creating room for discussionand decentralized decision-making. Otherwise, organizations where single beings make all decisions will have little agility at all costs. Empowering employees is critical forensuring a team that can work independently.

Question 2

The interviewee outlines that initially the responsibility of decision-making was only left to one person, the CEO. This made processes slow and decreased development and growth of the company. The delegation of decision-making and responsibilities started, once it became clear that it is the most efficient way to operate. This led to many changes, including higher transparency and more operational efficiency. All members became more confidentand were less afraid to lose control as decisions were explained and visualized. Open feedback culture was promoted and everyone started giving feedback and gained self-confidence.

Question 3

The interviewee’s personal perception is that current collaborationis very useful and gives him room to work on different tasks at the same time. Formerly, he had to do all tasks on his own. Once this changed, his level of satisfaction also turned higher.

Using data as indicators, the increased number of published blog posts and social media posting manifest the success in change. Also in terms of team evolution, the organization is now facing more self-managing and independent teams. Team morale, employee satisfaction, innovation and the level of employee involvement,are all perceived higher when compared to the prior situations.

Question 4

Outlining views on the openness and the sharing of thoughts, the interviewee affirms that if employees are more directin their communication, things can be implemented. By hearing someone’s feedback, people can reflect on their performance and increase it even further.

There is still room for improvement according to the interviewee. Some of the employees have shown remarkable improvements in the transition, whereas othersneed to follow a similar path. The interview makes it cleat that during transition the primary role of the CEO is first, to keep the right direction and second, ensure that the relationship with the rest of the team is strong and enhanced by the increased communication with each other.

Question 5

The interviewee believes in the happenings of several trends. First, intra-entrepreneurship will increase, i.e. the evolvement of smaller, decentralized teams within bigger companies. Second, communication will become even more transparent and at eye-level, regardless of position.

Also team spirit is crucial. Therefore, the use of team events, holidays and the sporting activities will increase and leaders will be participating too as an act of role modeling.

The interviewee does not believe that cultural background or differences impacted him on his working behavior in the past. However, it has a greater impact now and might increase in future as well, once the company grows. He refers to the differentiation between a micro- and macro-level perspective.The Europeancontinent is home to many countries and yet, has some homogeneous work culture.

Last, digitalization will further increase the need for working remote and home office. Until now, the majority of employees have not been necessarily making use of it as meeting in person remains important.

Interviewee 7
“The organizational transition from startup to corporation: How does leadership influence transition in Austrian startups?”

Personal background

The seventh interviewee started as an intern at an automotive company while studying health care and the process management. He later worked as a consultant at a hospital and alreadyone year was promoted to team leader.Two years ago he then joinedhis current company and first started as a process manager. At one point, he recognizeda lack in leadership culture that led to process inefficiencies and therefore decided to take over leadership development. This includes developing young leaders, keeping the corporate culture when growing, developing new structures, ensure agile teams and everything that is related to office structures as open space culture is part of leadership.

Question 1

The interviewee believes that leadership culture plays a big role in the organization. There is a need to preserve the corporate culture when the company is growing as well as the need to spend time on corporate culture in general. He believes that the organization can only preserve the culture if it has chosen the right leaders.

He defines leadership at his current company through a “leadership cart” where missions are described and elaborated on.The cart also defines what employees expect from their leaders. The cart then leverages to define the right mindset, develop necessary behaviors and last, ensures theseare constantly trained.

In addition, it is important to regularly remind employees what type of leadership is used by making it visible to everyone. This can range from acting as a role model, realize team ideas, be honest, be physically and mentally fit. There is also a regular leadership meeting with currently eleven people who share responsibility.

Question 2

The transition from startup to company started in top management, which is made by the four co-founders.First, they realized change was needed due to accelerating growth, i.e. a change in mindset occurred. Second, they started defining new goals and in the following, they set up a leadership meeting where all team managers could democratically contribute with their own ideas. The four co-founders explained what goals they are seeking for, but gave room for further collaboration.

Another major factor is that if leaders want transition, there is a need for them to act as positive role models themselves. They should be the first who implement and execute. If others do not behave as expected, they need to remind them as vice versa. Every leader is told that he or she should act is it were their very own company. The organization also follows a theoretical approach, including change management tactics that focus on giving employees a purpose and reason to their daily operations.

Question 3

Employees are regularly asked how they feel and what can be improved regarding internal communications.One of these feedbacks was the need in accelerating the information flow when changes occur. The more changes took place, the more satisfied and in the following, the faster the company became. This was possible as employees themselves wanted to be faster. Also demonstrating the overall picture and vision gave employees reasons to improve themselves. Their leadership approach significantly influenced these developments.

As the company generally did not measure throughvalidating data, the focus was and is still on employee perception. However, there is some data that speaks in favor of the current leadership approach. Employee fluctuation has been steadily low throughout the years and the total number of sick days is lower than the average.

Question 4

The interviewee thinks that there is still room for improvement and it startswith choosing the appropriate individuals for leadership position. Currently, some of the leaders are in their position because they are technically skilled and the oldest in age.In future, all positions should be filled with the most suitable individuals, regardless of age. There will be an even bigger emphasis on what is expected and important for the position. They will be then supported and advised by the experts in their teams.

Even though, leadership transition has been taking place for years now, the transition is still running. One of the long-term goals is to take even more time for employees. To reach perfect leadership, these changes will require several years of operations.

Question 5

The interviewee predicts a change towards a more vision, goal and particularlytrust driven leadership approach. He believes that leaders will have to create an environment of less centralized decision-making where employees can make mistakes and still work on their own. Thus, they will learn more and improve their skills.

Further, it is important to offer perspectives and a purpose behind each activity. By doing so, every employee will become a relevant part of a greater overall vision. Coherently, they will feel more related to the company.

Last, startups willalso start ensuring that their leaders cooperatemore with each other – avoiding the silo effect – and promote real leadership teamwork.

Interviewee 8

Personal background
Further information will be added shortly.

Question 1

In a bid to define corporate culture the interviewee explains that culture and the people behind are the focal point. Co-founders and managers are supposed to be role models and focus on developing people because they are centric to the corporate culture. In 2016,the organizational structure changed into agile teams, creating mini-startups within the startup that totals 180 employees currently.

Question 2

Once the organization grew to 40 employees, the team started to define its core values by conducting several workshops. In these they determined how teams and individualsshould work together. For instance, flexibility was defined as one of the core values of the organization. In the following, they developed an approach of questioning and changing the organizational structure whenever it is needed – on a regular basis. Transparent and fast communication is another core value. When the organizational chart was going to change, it was quickly and directly communicated to all employees. This prevented a potential conflict due to misunderstandings. The leadership teams want everyone to clearly understand why specific actions are taken.

However, in the beginning there was some level of anxiety too. To decrease the exposure of fear, the management first involved everyone who was affected by the change and their team leaders via face-to face communication. Once this was clear, an email was sent to everyone in the organization with the latest updates on change regarding the organizational culture.

Question 3

In contrast to most of the other selected startups, the organization has already implemented data monitoring models regarding the effects of its leadership practices. Among them is the employee satisfaction index and employee net promoter score that are quarterly analyzed and reveals a current rating of 3.5 out of 4 points.

Apart, KPIs regarding budget, revenue and user growth all provide very positive developments for the last years. This is according to the interviewee linked to leadership.

Another very relevant initiative is the use of OKRs, a model that is often used in U.S. startups and less in European ones. The OKR framework focuses on agile transformation and builds a bridge between individual goals andoverall organizational goal. In doing so, every employee will understand how his or her specific activity will add to the organizational goal. Requirements are:

• All goals need to be transparent
• Reaching 70% of the final goal is the minimum and satisfying enough
Question 4

According to the interviewee, it was decisive that first all founders accepted that they represented leadership from the past and therefore, had to develop a new generation of leaders. Once the leader transition started, many of the selected leaders-to-be were still very young and needed guidance. Similarly to some of the other selected startups, role modeling was therefore a dominant factor. Every leader and every founder is supposed to act as a role model. In this context, mentoring by the founders and senior members and in addition, the collaboration with external consultants took place.

Another dominant factor is the people-centric focus where people and their needs are put into the middle of the organization. Too much formal structure that could hurt corporate culture was reduced, as well as the number of rules in general to reduce complexity.

Question 5

The interview believes that OKRs will be among the most popular trends in the startup scene. Particularly, startups from 40 employees upwards will start or are already implementing the OKR framework. The interviewee’s own organization is often asked for support in this respect. Mentoring among startups is necessary as many are not yet that active in the fields of leadership or human resource development.

Another significant trend is the change from founder leadership to leadership that is filled by persons with the necessary skills. In many cases individuals can be great founders and excellent motivators, however, when it comes to leading a growing organization, others are more skilled at it. Stepping down accepts real awareness, which is not guaranteed as the ego often prevents possible transition. Therefore, the interviewee does not completely agree that all founders are ready for the time being.

Interviewee 9

Personal background

The interviewee has a business and economic background. He is a serial founder and has run a startup community and NPO before. During this period, he realized his passion for coding and development in general and later co-founded his current startupin 2015. In the beginning, the company started with two employees only, him being the current CEO. It now has eight employees with five being employed and three working on part-time.

Question 1

Sixth months after foundation, when new employees apart from the original founders joined the organization, it became clear that they had been challenged to inform everyone in the organization about vision, mission and basic corporate culture of the company.
In the beginning, the interviewee did not focus significantly on leadership or corporate culture, as he was involved in many other duties. In 2016, they started evolving a clear vision, which also ignited new motivation among all employees. They started conducting presentations about the status quo and where the organization is heading, but also started sharing information more transparently in general. Also, regular team-buildings were and are held. As a result, members of the organization now feel more emotionally connected to the organization and they are interacting on a personal level with another too.

Regarding the two co-founders, even though he is the CEO, both share equal power and responsibilities. However, in Spring 2016, they adapted their roles as the interviewee is now the one that directly communicates with the rest of the team, even though, decisions are made together. This was necessary as employees had been confused concerning who was the one with last responsibility.

Current leadership is characterized by remote working, virtual teams, self-management, self-responsibilities and it is driven by vision and mission.

Question 2

The interviewee believes that the leadership practices have resulted in employees being emotionally more connected to the company, higher motivation and higher employee involvement. Moving to another country with a second office has influenced this outcome as it required organizational restructuring and transition. It not only influenced the foreign team, but also the domestic team. More independent working and self-management was required. Employees started solving problems on their own. The implication of this development saw the evolution of a self-driven team who are not dependent on founders of the company anymore.

In total, an experience-driven leadership approach is being used, i.e. changing processes and structures if experience shows it is vital.

Question 3

According to the interviewee, the company is yet too small and young to monitor the impact of leadership analytically. The lack in data monitoring was also due to the lack in resources and time to do so. In addition, there were no numbers available that show the growth of the company.

However, in a personal context, the interviewee positively perceives the current leadership practices, as the team has been moving forward. The interviewee had also been significantly engaged with self-leadership and observes progress in himself too.

Question 4

The interviewee expects all employees to be self-driven.However, the main challenge the company is facing now is the ability to identify and measure which employee is doing rightfully and who is not by implementing a data driven approach. This means, that the organization needs a transition from subjective perception to a more objective numerical values approach. This needs to be implemented for all the organization, not only a specific department.

Question 5

The interviewee has observed two different startup scenes, the one in foreign territory and the domestic one back at home. He believes that companies are to some extent more conservative. Nevertheless, he believes that as the startup scene in general is a global movement,organizations that want to be successful need to adapt global leadership trends such as:

• Sharing of employee stock options
• Reward-oriented motivation
• Promoting talent driven leadership

Interviewee 10
“The organizational transition from startup to corporation: How does leadership influence transition in Austrian sta
Personal background

The interviewee is operations manager and the current CMO of the company. She is also a serial entrepreneur and co-founded a private programming school before as well asinitiated projects that connect females with IT companies. She also worked at an incubator for two years where she consulted startup in online marketing and apart, was involvedat a NGO where she was leading a social media and public relations team.

Question 1

The interviewee believes that the company does not have a clear corporate culture yet. The organizational hierarchy is very flat and all responsibilitiesare delegated among four members. Communication is most significantly executed online and meetings are very flexible. These are organized by the CEO.

Even though, there is a clearly defined CEO who has last authority, there is no general impression of one leader making all the decisions. In fact, everyone is self-responsible for one area. Reporting involves all employees and is shared transparently.

Question 2

The perception of the interviewee is that democratic and participative decision-making is appropriate and the best solution for the company. This approach is faster, more agile and more efficientwhen it comes to making decisions, particularly in consideration with long-term effects.For instance, expanding to the business-to-business market segment was much easier. It demands more involvement and engagement by every team member and therefore, might be perceived lengthy in a daily context. However, from a long-term perspective the organization will be more flexible when it comes to moving forward.

Question 3

In spite of the fact that there are no valid KPIs that monitor the positive development,the current corporate culture is very important to her and further expresses her personal beliefs. Otherwise she would not be interested in working there.

Her personal perception is that she performed well under current leadership practices.She also believes that there is direct correlation as the way communication is being used, can lead to a learning culture with highly involved employees. This can be observed in every employee who have improved their skills significantly in the last years.

Question 4

The interviewee explains that as most of the team is working remote, personal contact is often missing. Consequently there is a lack of common activities. Higher proximity would lead to more exchange and in the following, to more innovation and organizational success. Apart, current leadership practices should focus more on work-life balance issues, which is not always guaranteed in startups.

Question 5

According to the interviewee, many startups currently oversee work-life balance, which will become a greater matter in future. The interviewee also thinks of diversity and gender equality as matter of facts that need to be addressed more significantly. This includes equal payments, no racial discrimination and incentives such as maternity and paternity leave. However, this will require a change in mindset before incorporation becomes possible.

Analysis and findings

Communication is vital for every organization. As Watzlawick (1967) once stated: “It is not important what A says, but what B understands.”If a chronic miscommunication is dominating and the management-employee relationship does not work well, the company will be impacted in various areas. Employee engagement and employee productivity is directly related to it (Boyatzis& McKee, 2013). Effective communication is therefore key to corporate success (Watzlawick, 1967).

In general, there is a tendency of strong overlapping between managements’ and employees’ perception on applied leadership practices in their companies. This should not be taken for granted, as according to the investigation by Beck & Harter (2015), communication malfunctioning among employee and employer relationship are among the most significant reasons for limited employee retention. Communication and transparency build one of the backbones of corporate success (Northouse, 2013). The findings speak in favor of the examined startups.

Similarly, corporate culture, which is related to leadership (Northouse, 2013), is mostly interpreted in the same way. However, there are discrepancies in perspectives too. The findings also reveal ongoing challenges in everyday management. Attributes such as emotions and cultural background add to the complexity. The better the communication flow, the lower the degree inmisunderstandings, even within heterogeneous workforce ethnicity.

The findings also reveal that for the most part a globalized worldview management approach is practiced, i.e. employees regardless of their cultural background are managed the same.Cultural complexity can affectmanagement in their decision-making process (Pasmore, 2009). Using a globalized worldview management can limit this complexity. The term “cultural membership” is often associated in this context (Northouse, 2013).

In terms of leadership, the examined startups use very popular leadership practices. However, some of them are making use of specific leadership practices rather unknowingly. For instance, when implementing marketing strategies, it is usual to revert to known models such as the SWOT analysis. This is the standard and known. When it comes to leadership however, there is often no established, standardized approach. Even though, features of transformational, resonant or leadership charismatic leadership are constantly used, some interviewees are not aware of it. It is rather executed unintentionally.

Another significant factor that should be considered are the four stages of group development as explained by Tuckman (1965) and shown in figure 3. Leadership is a predominant factor in this development. Starting from the very high need in leadership in the beginning, this need gradually decreases when roles and strategies become clear, usually in phase four where autonomous management is present (Tuckman, 1965).

Startups that are in transition phases tend to hire many employees within a relative short timeframe. Whenever someone new joins the team, group development takes place and the “forming” phase starts. In this phase, the team is determined by the needs of their individuals and clarification in roles and responsibilities is lacking (Tuckman, 1965). In phase two, “storming”, when members begin to establish their roles and responsibilities, conflicts arise in the following. Conflicts may reach a point where some members split and leave the company. Some of the selected startups have experienced incidents like this. In phase three conflicts are settled and there is a degree of consensus and collaboration among members. The role of leadership is to manage the lately clarified roles and responsibilities. In the fourth and last phase, clarity expands to vision and strategy. Teams are then in a stage where they can work and act autonomously (Tuckman, 1965).

Leadership is consistently present in all these stages and decisive to team effectiveness and performance.

Figure 3: Stages ofgroupdevelopmentbyTuckman (1965)

Implemented leadership models

The observed leadership models as provided by the conducted interviews are:

1. Charismatic Leadership in startups with experienced and non-experienced founders and startups that are significantly influenced by their founders’ vision

2. Transformational Leadership in startups with experienced founders

3. The Contingency Leadership and Psychological Empowerment Model in almost all of the examined startups

4. Specific features of Holocracy Leadership, even though, all examined startups use a limited amount of hierarchical structures

5. Resonant Leadership in startups with experienced and non-experienced founders

According to Northouse (2013), charismatic leadership focuses on emotional components, inspirational motivation, intellectual stimulation and individualized consideration. Leaders in four out of five startups (Interview 1, 2, 3, 4, 5, 6, 7, 8) focus on these elements and put significant emphasis on leadership by example and vision-centric management. At least one (Interview 1, 2) regularly challenges the beliefs and values of their employees to drive innovation and consider individual need of their followers (Interview 7, 8).

The latter has further implemented a standardized process for leadership development, including the focus on each individual’s strengths and weaknesses. In this respect, the standardized process also involves transformationalleadership approaches, i.e. a setting in which talents with leadership potentialare elected and trained to become future leaders. According to Bass and Riggio (2006), this is not unusual as charismatic and transformational leadership are connected in their behavior towards motivation. The use of emotions to influence employees are used in vision-centric management, most often conducted by the CEO to motivate employees long-term (Gebert et al., 2015).

Northouse (2013) and Boyatzis& McKee (2013) define transformational leadership as in the process of an employee’s transformation into a leader over time. There are three observed cases in this respect: First, startups with non-experienced founders who transformed themselves into leaders over time without experienced support (Interview 9, 10). Second, startups with non-experienced founders who transformed themselves or others into leaders over time with experienced support (Interview7, 8). Third, startups with founders who had gained leadership experience prior, e.g. in other companies (Interview 3,4, 5, 6).

In this regard, the success of transformational leadership is depending on the employee’s perceptionon high leadership.Whenever there is a high need in leadership, transformational leadership practices can be very effective (Breevaart et al., 2015). Contrary, whenever there is a low need in leadership,employee self-leadership practices can be very effective (Breevaart et al., 2015).
The examined startups tend to combine both of these approaches. One the one hand, employees are asking for a certain degree in self-leadership, on the other, they are asking for leadership by management and actions that lead to an increase in motivation and satisfaction. In order to understand these dynamics, Hofstede (2015) and his theory on cultural dimensions provide useful insights on this subject.

Literature to be used

The study wants to support startups in their managerial decision-making when approaching the most effective leadership strategies. In order to address the above-mentioned research questions, the works of Northouse (2013), Houghton & Yoho (2005) and Bird & Fang (2009) among others will be therefor used.

Established leadership theories such as the likes of Northouse (2013) and Houghton & Yoho (2005) will undoubtedly build one of the backbones of the research. Starting with Northouse (2013), it is first important to understand what leadership actually means to the author. Northouse (2013) suggests leadership as a complicated process with numerous dimensions. Rather than being a linear one-way event, leadership needs to be considered as a process, that involves the relationship among followers and leaders, the influence of so-called alphas on betas and the parameters of goals set. Leadership does not only involve leading others, but also following others when it is needed (Boyatzis& McKee, 2013).

There is research that believes leadership to be a born, characteristic attribute. However, there is also research that believes leadership to be an attribute only to be developed over time as Boyatzis and McKee highlight in their Resonant Leadership Theory (2013). In short, there are multiple theories: characteristic based, role or position based, emergent oriented or process oriented. Theories like the trait leadership for instance focuses on people’s attributes that will put them automatically into leadership roles (Northouse, 2013). Whether it isthe trait approach that says leadership mentality is given by nature, the skills approach that puts a focus on developing certain leadership skills or the style approach, in which leaders only act according to a specific situation, leadership is imminent for organizational success (Northouse, 2013). Great leaders establish an environment where followers feel engaged to improve themselves. Intolerant leaders will prevent employees from expressing ideas and thus creativity will be lost. That will have a negative effect on the corporate culture as well (Northouse, 2013). The following paragraphs depict some of the most widespread leadership models in detail:

Charismatic Leadership

The backbone of charismatic leadership focuses on different factors, which are emotional component, inspirational motivation, intellectual stimulation and individualized consideration (Northouse, 2013):

• Emotional component: Leaders are strong role models to their followers.
• Inspirational motivation: Leaders communicate great vision and gain their followers’ commitment.
• Intellectual stimulation: Leaders encourage innovation by challenging the beliefs and values of their followers.
• Individualized consideration: Leaders emphasize on each individual need of their followers.
According to Gebert et al. (2015), specific emotions can have a great influence on the outcome of charismatic leadership. There is a nexus to transformational leadership, which will be discussed in 6.3. Being emotionally intelligent, charismatic leaders are deeply influenced by their emotions. This becomes evident in their attitude of communicating with others. Also, their approach to follower relationship makes this evident.
In contrast, theories like the trait leadership model focuses on people’s attributes that will turn them into leadership roles (Northouse, 2013). This is criticized by literature as common belief see traits not to be enough to manifest the optimal leadership technique under all circumstances Waters (2013). For instance, environmental factors are very influential as they have strong implications on certain industry practices. Taking these into consideration will result in better leadership practices Waters (2013).
Regarding trait leadership, one would think of great entrepreneurs from the past such as Henry Ford. However, leadership practices that are charismatic, authentic and ethical in nature are most often stronger related to them. In order to completely understand this, it is important to take a look at the being’s “from rags to riches” success story. Henry Ford started from the very bottom of the organizational hierarchy and made himself a success-story. As of this, employees related to him as a similar being, whom they can look upon career-wise (Graves, 2013). Apart, his family man attitude further increased his status of being authentic and ethical when it comes to decision-making.
At least three of the four factors (Paragraph one in 6.2) that form charismatic leadership could be seen in Ford’s characteristic (Connelly et al., 2013). He was regarded role model by many employees. This created a strong emotional reaction and bond with the leader. He also constantly emphasized on motivating followers with a great, long-term vision. Further, he believed that employees needed to benefit individually from the success of the company.

Transformational leadership

For the research, transformational leadership style in particular seems very approachable when considering the stage of organizational development the author wants to make research on. Transformational leadership focuses on beings that have evolved into real leaders over time. This means, and for startups this can be very common, even interns or volunteers can become leaders over time. Therefore, it will be interesting to investigate how leaders have evolved over time in the selected startups. Whereas trait leadership believes in human beings born with certain characteristics that make them great leaders for instance, transformational leadership implies the process of members’ transformation into leaders over time (Northouse, 2013 and Boyatzis& McKee, 2013).

In order to understand the dynamics of transformational leadership, the role of charisma needs to be investigated. According to Bass and Riggio (2006),there is a connection between charismatic and transformational leadership. This is important because it implies a shared dimension of motivation, which again is important for the research questions. Motivation is often mentioned as the emotional bond in-between the leader-follower relationship. Leaders who can motivate their workface through intrinsic motivation will experience employee trust and loyalty over a longer period. Illustrating a great vision can leverage this as it implies a cause that is even greater than oneself. Leaders with a great vision can motivate members to follow wherever he or she wants to (Northouse, 2013 and Boyatzis& McKee, 2013). This particular leader-follower feature regarding motivation will be evaluated in the interviews.

However, according to a study by Breevaart et al. (2015), the positive effect of transformational leadership depends on employees’ needs for low or high leadership. Results that were taken from 57 leader-employee relations show that when there is a high need for leadership, transformational leadership practices are more effective. Whereas in the opposite case, i.e. low need for leadership, employee self-leadership becomes more effective. The latter will be discussed in the following paragraph.

The contingency leadership and psychological empowerment model

Houghton & Yoho (2005) present a contingency leadership and psychological empowerment model under which self-leadership among employees becomes beneficial to the organization. Houghton & Yoho (2005) highlight a self-leadership approach that promotes features such as self-determination, self-competence and self-efficacy. As a result, psychological empowerment will be enabled and followers will face an open environment where they are more likely to engage in self-leadership behavior. In particular co-working spaces that startups are very familiar with provide open innovation models that support the development of self-leadership practices (Örmgård, 2013). The authors define three types of self-leadership:

• Behavior-focused strategies
• Natural reward strategies
• Constructive thought pattern strategies

Behavior-focused strategies are strategies that increase self-awareness (Houghton & Yoho, 2005). In doing so, the higher the chance in successfully managing all necessary tasks. Natural reward strategies are strategies that primarily focus on intrinsic motivation (Houghton & Yoho, 2005). This means that employees feel motivated by the work itself and not by the financial incentives for instance. Last, constructive thought pattern strategies are strategies that involve three rationally oriented thinking patterns: self-analysis, positive self-talk and mental imagery of successful performance outcomes (Houghton & Yoho, 2005).

There is an interesting description of self-leadership provided by Man & Neck (2004): According to the authors, self-leadership is understood to be a systematic group of strategies that are used to influence performance and effectiveness in organizations. Again, key contingency factors such as follower involvement and situational urgency influence the outcome in both directions, positive or negative.

In their research, Houghton & Yoho (2005) postulate that self-leadership is not guaranteed in all organizations. It demands skilled and experienced followers (=employees) who can handle to organize themselves. When organizations strive for employees who are committed, independent and psychologically strong, they need to promote follower self-leadership. They also believe that particularly organizations characterized by decentralization and follower empowerment are suitable for self-leadership models. Therefore, self-leadership in loosely, flat structured startup companies is very common. Without proper process management, this seems inevitable for early stage startups in particular. However, even in bigger corporations, self-leadership becomes more and more important (Neck & Houghton, 2006). That can be a very valuable point for the research, as it will be interesting to observe the degree of self-leadership in the selected startups and if there is a change over time due to transition.

In reference with the research of Breevaart et al. (2015), it will be also interesting to observe if there is a potential conflict between transformational leadership and self-leadership behavior in the examined startups. Even though, there is a general trend for self-leadership (Houghton & Yoho, 2005 and Breevaart et al., 2015), it is essential to determine if this approach really leads to better organizational performances during and after transition.


The leadership approach of “Holocracy” has seen a significant rise in recent years, particularly in startups. This comes with the great success of Zappos, a former startup led by its founder and CEO Tony Hsieh (Greenfield, 2015).
Zappos organizational culture focuses on a new form oforganizational structure, in which self-managing teams are predominant, but hierarchy and micromanaging almost non-existent. Young leaders are quite common in this case. The emphasis is on so-called intra-entrepreneurs within the organization, i.e. every employee is an entrepreneur him- or herself. This approach fits very well to the current status of fast changing markets, which ask for flexible organizations and high responsiveness (Breevaart et al., 2015). In this respect, Brazilian company Semco comes into mind (REFERENCING). The relationship between CEO and employee is also usually very informal and equal.
Furthermore, it is common to challenge each other’s values and perspectives. By the use of controversial views and new working methods, the degree of innovation can be increased. Similar to other leadership practices, it can be indispensable to adapt, otherwise you will need to leave the group, i.e. company (Greenfield, 2015). The embracing approach for employee involvement does not prevent exclusion.
Looking at the core of Holocracy, it becomes evident that this leadership model is no other than a combination of modest leadership and the contingency leadership and psychological empowerment model (Owens &Hekman, 2012; Houghton & Yoho (2005). The pursue for modesty in behavior and look, which is common in Holocracy-influenced companies, turns teams into solution focused task forces. Being transparent in information flow and the creation of self-organized, autonomous teams can be found in the contingency leadership and psychological empowerment model too (Manz& Neck, 2004).

Resonant Leadership Theory

The Resonant Leadership Theory is described by Boyatzis& McKee (2013) by its strong focus on emotional behavior. It requires very mature beings with high degree in resonance, which is no other than employing emotions to ensure organizational success. Intellectual and technical knowledge are important to be perceived as competent and reasonable.

Apart, self-management skills and high emotional intelligence play bigger parts (Boyatzis& McKee, 2013). Particularly, the last is essential to be eligible for this leadership approach. Emotional intelligence involves self-awareness on the one hand and empathy or as some researchers prefer, containment, on the other (Boyatzis& McKee, 2013). These can be very valuable when communicating with employees to achieve goals. Optimism can be transferred too by connecting to ones’ employees. Resonant leaders can therefore drive motivation and in the following innovation.

In this respect, Boyatzis& McKee (2013) introduce a full list of requirements leaders need to be aware of if they want to exploit the full potential. In order to be eligible, resonant leaders should manifest the following:

• Resonant leaders need to be strong in social competence and emotional intelligence to connect easily to employees.
• As employees constantly evaluate their leaders to understand their decisions, it is important to change the emotional conditions within the organization if necessary.
• Resonant leaders should never be indifferent in their decision-making when situations become stressful. Indifference can be a sign of non-emotional behavior, which is contradictory to the purpose of leadership approach.
• Resonant leaders need to know where they are good at and where not. They need to be aware if there is potential for self-improvement.
• In this regard, resonant leaders also need to regularly challenge their decisions to improve.
• Finally, resonant leaders need to understand how their employees socially interact with each other and the social dynamics behind it.


For the thesis, the following topics need to be discussed in accordance with the five research questions mentioned under page 1 and the interview analysis from page 4 –21.

Further,referencesmentioned on page 30-31need to be used.

The goal is to analyze the conducted interviews with reference to the research questions and to include a conclusion:

The influence of leadership on corporate culture
• The importance of being a role model as mentioned by interview 6 & 7

Controlled versus uncontrolled leadership approaches

Controlled leadership
• More mature startups switched to developed and controlled leadership culture and are more efficient now: Interview 1,2 7, 8
Uncontrolled leadership
• Startups in early-stage put less focus on developed and controlled leadership culture: Interview 3,4, 5, 6, 9, 10
• There is no general perception that corporate culture can be influenced by leadership

Democratic decision-making versus non-democratic decision-making

Democratic decision-making
• Include input by interview: 2, 5, 6, 7
• Include input by interview: 3(Holocracy approach)
Non-democratic decision-making
• There is a “One CEO decides all” approach in early-stage startups that leads to inefficiencies. Mostly du to limited resources: Interview 3, 4, 5, 6, 9, 10
• But also startups, that are older who focus on the “One CEO decides all” approach tend to have inefficiencies: Interview 1, 2
• Include negative opinion towards this approach: Interview 2

Lack in data monitoring
• Except interview 1, 2, 7, 8, every other interviewee shows a lack in data monitoring that might validate the impact of leadership practices.
• Focus on OKRs (Objective key results) = Explain features, functionality & impact in accordance with used literature or add new literature on this (Used literature from page 30)

Trust leadership
• The importance of trust in leadership is demonstrated by interview 4, 5.

Startup trends in leadership
• Leaders with a coaching mentality
• Leaders that are acting as sparring partners to their employees
• Already a stronger focus on leadership at earlier stages of the company: Interview 2, 3.
• Stronger focus on OKRs (Objective key results): Interviews 1, 7, 8
• Stronger focus on diversity & gender equality


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