The Web3 space tends to attract a disproportionate number of self-starters: ambitious people who want to make a difference and reap the benefits of being involved in a fast-growing new sector, and who are prepared to work hard to make that happen.
If you’re establishing a career in Web3, there’s a good chance you won’t be satisfied with the kind of 9-5 existence you might expect in TradFi or Web2. You’ll be looking for roles in which you have a high degree of autonomy and responsibility, and where your creativity and drive is valued. You’ll be prepared to work long hours.
But more than that, you may be planning to break away from the restrictions of working for other people altogether. Maybe you have ideas, or simply ambitions – or maybe you’re already well on your way to starting your own business.
If that’s the case, then you’ll need funding and the skills to realise your ideas. If you’re even remotely successful, then sooner or later you’ll find you need to bring more people on board.
At that point, you’ll also need to do something that may not have occurred to you in the early days of your venture: lead your new team effectively. That’s a very different skill than anything you’ll typically have done before.
Leadership is a critical element of organisational success, and it’s a key factor in what sets apart good organisations from truly great ones. Leadership is not just about how you manage your team, but how you guide your organisation through the challenges of the marketplace and position it for success.
In his best-selling book, Good to Great, business management consultant Jim Collins introduced the idea of ‘Level 5 Leadership’: the result of personal qualities and an approach that often defines some of the most successful companies, and which he describes as combining humility with unwavering focus and commitment. Level 5 leaders typically demonstrate a lack of ego and profound modesty. Instead of seeking personal recognition, they put their organisation first and credit their teams with any wins. At the same time they are fiercely dedicated to the company's success and will do whatever it takes to make it great.
These are the personal characteristics of typically great leaders. There are many different ways that those qualities and priorities can be expressed in the day-to-day running of a company.
Leadership Styles And Web3
A vast amount has been written about leadership, and how to find the style you’re most comfortable with. A quick Google search (or ChatGPT query) will turn up pages and pages of different approaches: Autocratic Leadership, Democratic Leadership, Transformational Leadership, Transactional Leadership, Servant Leadership, Laissez-Faire Leadership, Charismatic Leadership, Coach-style Leadership, Bureaucratic Leadership, Situational Leadership, Authentic Leadership, Strategic Leadership… the list is endless.
There’s a vast literature on the subject. We’ll boil it down to a few major styles that stand a chance of working in the Web3 world. (You can forget bureaucratic leadership, for example; putting together extensive and rigid frameworks of rules and policies is a great way of crushing the kind of creative talent you need to succeed in Web3.)
Needless to say, such a list is necessarily simplistic. There’s also an overlap in the different leadership styles, and how compatible they are. Laissez-faire leadership (a hands-off style that gives your team a high degree of autonomy) might work well with democratic leadership (soliciting input from the team and making collective decisions). Even if you have a more top-down, directive approach, that can still be combined with periods in which you seek consensus.
Democratic Leadership, aka Participative Leadership
As the name suggests, the hallmark of democratic leadership is listening carefully to your employees and involving them in the decision-making process. This requires good communication skills, and a temperament that allows you to share power and responsibility.
Teams will collectively make decisions through discussion and collaboration. Your employees will have a high degree of autonomy, and rely on each other to maintain accountability and determine the best way forward. Trust goes with the territory, and your team will be encouraged to volunteer ideas and information without being asked.
This is a common leadership style in Web3, since it’s a fast-moving sector and different tasks may be highly specialised, so team members need to take the lead on different initiatives and work with each other, without being given top-down instructions. However, it’s not always easy to remain in constant communication, as is the ideal, due to the remote nature of Web3 teams. Maintaining a culture of openness and sharing – and a place in which to communicate freely – is critical.
A delegative or ‘laissez-faire’ style of leadership is a hands-off approach that entails giving as much initiative as possible to your team. It involves granting your employees a very high degree of trust; essentially, you are allowing them to get on with their jobs with minimal management or intervention from you.
If your team members are competent and prepared to take responsibility for their roles, this can be very successful. In the Web3 world, there are lots of people who work best this way, preferring simply to be left to their own devices and do what they’re best at, without being told how to do their jobs or (worse still) micromanaged. If your teams are remote, and some of them are in very different time zones to you, then this may be the best way to work with them.
However, care is required, since this style of leadership doesn’t work for everyone. Some team members will need more active management and guidance. It’s also important that everyone still understands who is ultimately in charge.
There are times when a far more involved and visionary style of leadership is necessary, for example in periods of particular challenge (which frequently occur in the Web3 world). Transformational leadership encourages team members to step up and tap into their full potential, achieving more than they thought possible, as you guide the organisation through a time of change.
This is a high-energy form of leadership, in which your team will be enthused with a shared vision and develop close relationships. Your focus as a leader will be on the future, thinking ahead to figure out what has to be done to negotiate the challenges facing you. You and your team will need to be comfortable with the prospect of change, as you adapt to the new circumstances. You will also be keenly focused on your team, drawing out the strengths of each person.
For Web3 organisations that aren’t in immediate crisis, or are not undergoing radical change, elements of coaching leadership may be appropriate. This style emphasises the growth and personal/professional development of individual team members, mentoring each one to increase their skills and value to the organisation.
Coaching leadership requires a heavy investment of time and potentially money, since you’ll listen carefully to each team member and invest in their skills and development, following their progress at every step. This approach entails taking a long-term perspective, seeking to equip your people with the tools and confidence to progress in their careers and add increasing value to the organisation.
This requires some judgment in the Web3 space, where it’s common for people to move jobs every year or two. While continuous learning is vital in the crypto world, and you’ll be increasing the value, engagement and job satisfaction of everyone in your team, don’t expect them to stick around and work for you for the next ten years. And, as a leader who may have left a conventional role to found their own organisation, can you blame them?
Often in the Web3 world, a hands-off leadership style that maximises autonomy and trust is the best approach. At the other end of the scale is transactional leadership, or ‘managerial leadership’, which relies on clear structure and extrinsic rewards (and punishments) to provide the motivation required to ensure everyone does their job properly. For every employee, you’ll establish roles and responsibilities. There will also be a clear reward structure, of pay and potentially bonuses.
This is a quid-pro-quo way of running an organisation, and it simply won’t make sense for many Web3 companies, since it works best when people lack any better motivation (in which case, you have serious problems in the fast-moving and high-stakes crypto sector). Where it might make more sense is if you are working with a large number of freelancers, who otherwise have little loyalty for your company. You can’t expect them to buy into your vision in the same way that your core team will, and so a leadership approach that is more cookie-cutter and transactional might be the only way to achieve your goals.
Not to be confused with ‘Authoritative’ leadership (which emphasises a clear vision and direction for the future), an authoritarian or autocratic style is characterised by a leader who makes unilateral decisions with limited input from other team members. The leader takes sole responsibility, and maintains tight control over the organisation.
There is generally a strict hierarchy in such organisations, which many employees might find stifling. However, at certain times such a leadership style might again be necessary, since it allows for fast decision-making and the execution of a clear plan or vision. At times of difficulty (imagine your dApp has been hacked, or the unexpected collapse of a platform has wiped out half your reserves), it’s vital that you be able to move quickly and decisively.
In the longer run, an authoritarian style is unlikely to fit with a typical Web3 ethos, since it robs your team of agency and autonomy, leading to low morale, reduced creativity and less innovation. Nonetheless, at times of crisis, you – and your team – may benefit from such an approach.
Finding Your Leadership Style
Unless you’re one of the rare people who seem to be born to leadership, and intuitively know how to interact with your team, then your leadership style is something you should consciously give some thought towards.
Choosing the right style isn’t a one-size-fits all decision. It will depend on multiple factors: your own character, the skills and personalities of your team members, the stage and size of your business, and any external factors that might influence how you need to guide and grow it at the present time. Your leadership style (or styles, since a mixture of approaches might be appropriate at different times and in different circumstances) can have a huge impact on the success of your venture.
Start by ensuring you’re clear about what you want to achieve, and any specific goals you have. Writing a Vision and Mission statement can help crystallise your thoughts on this, and make it easier to communicate to your team.
Once you’ve done that, you can experiment with different approaches. It’s likely that one style will naturally appeal more to you – and will fit the nature of your business best. In the Web3 sector, many startup leaders adopt a democratic approach; things can be very informal and you’ll all be relying on each other and working closely together. If you’re running a larger business, where it’s impossible to know all of your employees well, then a more structured approach might be appropriate – but you might give your top team the latitude to exercise their own styles of leadership, depending on who they’re managing.
Lastly, remember that authenticity is key to successful leadership. Be genuine, show respect to your team, listen to them, and be open to accepting feedback – even when it’s painful. Leave your ego at the door, and prioritise the success of your people and your organisation. It’s not a trivial thing to achieve, but if you can manage that, you have a shot at building a truly great organisation.