Five effective leadership styles for business leaders

 

 

 

The key to a successful business is a great leader, but there are many different management styles out there and the one you pursue will depend on who you are, company culture and your business model. Here we look at the five main leadership styles in more detail, so you can find the one most appropriate for you and your business.  

 

 

Transformational leadership 

 

This approach is used by leaders who are always looking for ways to help their team grow and develop further, so that workers can consistently learn new skills and make a greater contribution to the business. The goal here is to promote a shared vision, so that everyone is working towards the same objectives. As such, these leaders tend to focus on the bigger picture, rather than the finer details of management. This style of leadership is ideal for people who are empathetic, good listeners and strive for integrity and authenticity. They are good at dealing with conflict and hold people accountable for their actions, including themselves.  

 

 

Democratic leadership 

 

Here, decision-making is based on the views of the team. While it’s the manager’s responsibility to make the final decision, each team member is given a voice and a vote on the final outcome. This can be a very effective leadership style as it gives lower-level employees a say in how projects progress. It can make for a highly motivating and inclusive culture within the business, because everyone has the opportunity to make a difference.  

 

 

Autocratic leadership 

 

This is the opposite of a democratic leadership style and isn’t always effective. In this instance, the leader has all the authority and may not even consult team members before making a decision. As a result, this can lead to poor decision-making, as the manager may not see the full picture from every perspective. However, this approach can be useful if tough decisions have to be made and buy-in from employees is a challenge. That said, for most businesses today, this type of leadership tends to create more issues than it solves and can lead to staff retention challenges. 

 

 

Laissez-faire leadership 

 

As the name suggest, this style denotes a ‘hands-off’ approach to leadership where responsibilities and decision-making is delegated to lower-level managers with minimal interference and supervision. This can be very empowering for team members as it gives them autonomy and the potential to make a real difference to business outcomes. Some employees perform exceptionally well under this style of leadership, especially in start-ups with a loose hierarchical structure, where everyone collaborates to achieve business goals. However, it is important that the leader continually monitors and reviews progress as a result of this leadership style. 

 

 

Transactional leadership 

 

These leaders work from an assumption that rewarding excellent performance and penalising poor performance encourages employees to work to the best of their abilities. This can be effective in certain types of businesses i.e., where workers have targets or performance related benchmarks to meet. 

 

 

Who are you? 

 

Of course, depending on your personality and the type of business you work in, some of these leadership styles can be blended in order to bring the best outcomes for the business. For help in discovering what type of leadership style suits you, there is a management survey tool known as the Leadership Development Profile that relies on a series of 36 open-ended questions that can help you understand leadership styles in more detail and discover which might be best for your organisation. 

Developing a leadership style doesn’t come naturally to everyone, but it’s worth trying and can help you become more self-aware, delivering greater business rewards in the long term.   

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