Not all leaders are created equal. Each business has different requirements and effective business management need varying leadership qualities to ensure success.
There are five different leadership styles that entrepreneurs and managers usually use. It is important for any aspiring leader to know the different styles in order to identify their own, or to be able to adapt should the business require it.
The five leadership styles
What is a participative leader?
This leadership style involves input from all employees, resulting in a decision that reflects the majority’s views. For example, if there is a company-wide problem, managers will inform the staff and a majority vote will determine the solution.
Why this works
It’s a lengthy decision-making process, but it has its benefits. It improves employee morale as they are given a voice and feel like their opinion matters. With participative leadership, employees will start taking an active role within the company and are more willing to accept workplace policies.
Famous participative leaders include Jim Lentz, CEO of Toyota North America. When Toyota vehicles were recalled, Lentz appeared on a website Q&A to field any questions customers had.
The downside is that if a decision needs to be made fast, the participative style might not work as the participation process takes time.
What is an autocratic leader?
Autocratic leaders will inform everyone of a clear goal and will tell you how to get there. Everyone understands what role they play and are provided with guidelines if they need. Unlike participative leadership, if a new strategy is implemented, there is no input from subordinates. All goals, procedures, and tasks are decided by the leader and will be delegated amongst everyone. The team faces dire consequences if goals are not met.
Why this works
Firstly, if decisions need to be made quickly, autocratic leaders can make decisions without any pressure or stress. If there is a clear chain of command in the workplace, tasks get done more efficiently. This leadership style is also beneficial if you have employees who need extra guidance and rigid processes. The disadvantage of an autocratic leader is that there is often a divide between employee and employer in the workplace. This often leads to a hostile work environment and high staff turnover.
Famous autocratic leaders include businesswoman Martha Stewart, who was once described as a “scrupulous and meticulous boss”. However, Stewart has built a global empire using this leadership style. Director Ridley Scott is also considered an autocratic leader. He is known to be a perfectionist and expects his actors to know their positions and lines. This has worked well for him considering his box office success.
What is a Laissez-Faire leader?
‘Laissez-Faire’ is French and loosely translated it means ‘do as you will’. In terms of leadership style, it’s more laid back. This approach allows teams to explore creative strategies and drives innovation. You will usually find this kind of leader in a creative environment, where deadlines are not crucial and team members manage themselves. Employees are given the resources they need and what they do with it is up to them. The leader will provide the information and trusts the team to achieve a great result.
Why this works
In a creative working environment, independence is valued. Teams are highly motivated and usually meet requirements and deadlines without any guidance. A hands-off approach makes employees feel that they are trusted and in return, feel confident in their ability to perform the task.
Famous examples of Laissez-Faire leadership include Warren Buffet, who rarely intervened in the workplace and allowed employees to perform tasks without his help.
The leadership style does have its disadvantages, especially in an environment where deadlines need to be adhered to. With the leader uninvolved in many of the procedures, employees could often mistake this as disinterest, which could result in a poor performance.
What is a transformational leader?
Transformational leadership is someone who actively communicates any changes to employees and is always motivational. Team leads are good examples of this. Once they receive a task from management, they communicate what is needed and inspire the team to achieve this goal and maximise productivity. They also offer support to individuals in a team and encourage an open communication space.
Why this works
These leaders tend to be supportive and loyal. As a result, team members will mirror this attitude. No matter the workload, tackling this project and achieving the desired outcome will be the main priority of the team. This also results in a high retention rate, as employees feel that they have an ally within the company.
Sir Richard Branson is a famous transformational leader. His approach to management is that the key to success is to ensure that all employees are motivated: “If you can motivate your people, use their creative potential, you can get through the bad times and enjoy the good times together… if your employees are happy and smiling and enjoying their work, they will perform well.”
While it is the most common style used by management, this approach could backfire. The leader needs to be sure of the decisions made. If not, the team is put in the line of fire, not the leader. Employees are also increasingly motivated to achieve their goals and will work long hours and burn out while doing so.
What is a servant leader?
Servant leadership puts the spotlight on the employees, while management is usually working behind the scenes. Like participative leadership, decisions are made by a group instead of one person. Servant leadership toes the line between leader and servant. In a nutshell, they lead with the others in mind. You’ll find this approach at non-profit organisations, where the mission is key.
Why this works
A servant leader values diverse opinions and everyone’s contribution is taken into consideration. People working under this leadership will feel that they are contributing to something meaningful and always feel encouraged in the workplace.
Famous servant leaders include Nelson Mandela, Martin Luther King Jr., Mother Theresa, and Mahatma Gandhi – people who put the needs of others before their own.
This type of leadership is rare in a business environment and may not work, especially with deadlines. However, certain characteristics of this style can be used when motivating a team.
How do you find your leadership style?
Leadership style depends on personality type and playing to your strengths. You can also combine the above styles or switch between, depending on what the goals are. Online courses in management can also help you focus on finding your leadership approach.