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81. The Most Common Leadership Blindspots in Small Businesses

Episode Summary

So many of my conversations with high level executives are about their disdain for their work. One told me he goes to the office every day to breathe toxic air. That's what prompted this episode.

Research from the National Association for the Self-Employed shows employees of smaller businesses report higher satisfaction than those at larger corporations, but only by about 11 points, which tells me there's still a lot of room for smaller businesses to do better. And the biggest lever for that sits with the founder.

In this episode, I move past the usual conversation about "happy employees" and make the case for something more durable, which is engagement. I walk through the three categories of reactive tendencies we all carry into leadership, the ones we developed as kids to keep ourselves safe, and how the overuse of those tendencies quietly erodes trust, culture, and performance inside small businesses. If you've ever wondered why your team isn't following through, why the same patterns keep surfacing no matter who you hire, or why you feel resistance to the harder parts of leading, this episode is for you.

Key Takeaways

  • Employees at smaller businesses report 11 points higher satisfaction than those at larger companies, according to the National Association for the Self-Employed. But small doesn't automatically mean engaged, and the founder's leadership is the single biggest variable
  • Happiness is fleeting. Engagement is different. William Kahn defined it in 1990 as the degree to which people bring their full selves physically, cognitively, and emotionally to their work. That's what we should be optimizing for
  • Reactive tendencies are behaviors we developed as young children to keep ourselves safe. They made sense then, and many of them still serve us now. The problem is the overuse, which is where they start damaging our leadership
  • The complying tendency shows up as people-pleasing, avoiding difficult conversations, and saying yes to keep harmony. It builds affection in the short term and erodes trust in the longer term
  • The protecting tendency shows up as "I can do it better myself," emotional distance from the team, or harsh critical feedback. It produces self-sufficiency and the ability to make hard calls, but it blocks the warmth and empathy teams need from their leader
  • The controlling tendency shows up as perfectionism, overworking, needing to be right, and pursuing results at the expense of people. High standards are a gift. Impossible standards are a shield
  • Leadership is not a fixed trait. You are either actively working on it and getting better, or you're not, in which case your unconscious patterns are making you worse over time
  • Your calendar, your culture, and the engagement of your team all reflect what's happening inside you as a leader. The work is internal before it's tactical

Memorable Quotes

  • "Walking into a new business and understanding how it operates is like walking inside the brain of the founder."
  • "Perfectionism is a shield we put on to protect ourselves. The lie of perfectionism is that if we do everything perfectly, we will not suffer. But perfectionism itself is creating the suffering."
  • "If you have 50,000 employees and one is disengaged, it barely registers. If you have 10 employees and one is disengaged, that's 10% of your workforce."

Resources Mentioned

  • The Leadership Circle Profile — the assessment tool Carolina uses with her private clients, including a self-assessment option on their website
  • William Kahn's 1990 research defining employee engagement
  • Brené Brown on perfectionism as a "20-ton shield"
  • National Association for the Self-Employed research on employee satisfaction across company sizes

Connect with Carolina

If you're interested in taking your leadership to the next level, I invite you to book a free hour call with me by going to carozuleta.com/consult. 

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