There are infinite possibilities for titles and positions in your business, but there are really only three kinds of relationships between any two of them. And understanding the dynamics of these three relationships - which are, more than anything, power dynamics - is critical to the professional development of your staff, the long term health of your business culture, and the personal sanity of everyone involved. The work here is intimately tied to having a well conceived org chart, as you seek to bring out 'hidden' dynamics in your company culture before they turn toxic.
... authenticity is feeling what you feel at all times, and then choosing what’s appropriate to say or do depending upon the audience.
If we shift our focus away from people's 'permanent' titles and instead look at the space between any two people, then the person across from you in any moment is either (1) an authority, (2) a subordinate, or (3) a peer. Now, if you're the business owner, you're always the authority inside your business (though you will of course have other people in your life: vendors, other business owners, etc. who are your peers). But besides you, most everyone else in your business is constantly shifting between the three. For example, for someone who manages a department inside your business, they are a subordinate relative to you, a peer relative to the other department heads, and the authority to the people who report to them. The point being, while who each person is doesn't change - how they hold themselves relative to other people does, and should, depending on the situation.
This view goes counter to popular belief and to many popular business bloggers who talk about authenticity and 'freedom' without acknowledging the nuances. Authenticity is not 'saying or doing what you feel' at all times. A better way to say it might be to say that authenticity is feeling what you feel at all times, and then choosing what's appropriate to say or do depending upon the audience. In that spirit, here are some thoughts about these three relationship 'roles' and some ideas to put into practice.
When you're "the boss": the art of firm but warm
When you're in a position of authority - especially but not just if you're the owner or CEO - every message you send is amplified 10 times whether you intend it or not. Even if what you meant to say was 'it was a little wrong', most people will hear you say 'it was very wrong'. Even if you truly mean 'I really want you to innovate and take risks', most people will hear that as 'he/she says that but she doesn't mean real risks'. Start with the assumption that the same exact words will have far more impact on a subordinate than they would on a peer.
You can't (and shouldn't) change the authority dynamic itself, but you can dramatically minimize its negative effects. The best way to do that is to be transparent with your own struggles with the thing you really want, perhaps by talking about a time when you were afraid to take a certain risk and why. And yes, this is tricky territory. Because the worst way to try and inspire or 'warm people up' is to pretend that you are just another member of the team (when you have the power to take away their paycheck) or by over-sharing details about your personal life to try and make yourself more approachable. That's not transparency, that's a collapse of your authority, and the fastest way to undermine the confidence of your employees in a way that's nearly impossible to recover from. Find someone you trust to help guide you here.
When you're "the employee": authenticity with respect
Reporting to someone else and not selling yourself out might be the highest and hardest art form in the business world, which is why great leaders take care of great managers when they find them. The art here is to take your passion, expertise and on-the-ground intel and bring your ideas to the boss with some breathing room around it, by asking questions rather than making demands, and respecting that he/she has a perspective on the business that you don't. And if you don't or can't trust that they have that bigger perspective, in integrity you should find someplace else to work.
When you're "equals": the high risk / high reward relationship
There's a lot of cultural momentum around everyone being on the same 'team'. And while that's true in one way in terms of everyone working towards a common goal, that doesn't change the reality of the underlying authority dynamics that are there between most people in the business. However, there are people within the business that are truly peers - two department heads or two associates on a customer service team for example. Remember that having peers isn't about age, education or experience - it's about structural authority in the business and whether two people have the same amount of it. In the simplest terms, the only time you have a peer is when neither of you can directly influence the other's compensation, career path or working conditions.
The challenge here isn't so much about collapsing as it is about colluding - in two different ways that are equally problematic. One kind of colluding is to fall into the easiest thing in the world to do - gossiping about 'what's wrong with the boss'. The other kind is when you see your peer slipping up in some other way and you don't point it out to them. To counter this tendency, try making an explicit agreement with your peers - shake hands on the challenge of challenging each other, and model it from your side by actively soliciting their perspective on how you could do better. As you can see, the peer relationship (and being clear when you are or aren't in one) requires as much if not more self-discipline, trust and open communication as the other two.
Experiment with these ideas, talk about them with your people, and watch how they start to open up some stuck places in your business. It's equal parts transparency and courage here. You need to call these power dynamics what they are, stand for the ones that need to be there and address the ones that are out of line with your values. And while it might seem totally unrelated, the more you do this the more you'll open up a wellspring of innovation and energy throughout the business that will feel like something magical happened. Because it did.