Leadership Styles in Business
“Leading is not the same as being the leader. Being the leader means you hold the highest rank, either by earning it, good fortune, or navigating internal politics. Leading, however, means that others willingly follow you—not because they have to, not because they are paid to, but because they want to.” – Simon Sinek, organizational consultant, motivational speaker and author. According to this definition, very few people in leadership positions are leaders in the true sense of the word. They are not followed willingly, in fact, they are too often abandoned because of poor leadership styles in business.
A 2015 Gallup study, 75% of people quit their job to “get away from their manager at some point in their career.” In other words, the number one reason people leave their jobs is because of a bad manager, not money, or a better position. Poor relationships between employees and those in charge of them make employees unhappy, and unhappy employees leave.
The success of any organization and the attitudes of employees are directly related to the leadership styles practiced by the leaders. Research also shows that employee engagement is affected by leadership style. This is an important point to keep in mind, since employee engagement is at an all-time low, meaning most workers are not engaged at work and could leave at any time.
Unfortunately, most organizations fail to appoint the right people in leadership positions. Research has shown that organizations appoint people to management positions that don’t have an innate ability to lead others. To be fair, very few people possess innate leadership qualities. This necessitates dedicated learning opportunities when someone is put in charge of colleagues. However, this important step is often overlooked.
Anyone in a leadership position needs to first understand management styles, the pros and cons of each, and what their own management style is. Then, with proper training and experience, they can become the type of leader that others follow because they want to, not because they have to.
Leadership styles have varying results and each may be applicable in different circumstances. People in leadership positions may also find they need to change their leadership styles to achieve desired results.
Different leadership styles
Autocratic Leadership
Autocratic leaders, also referred to as authoritarian leaders, make all the decisions without any consultation. This was the traditional style in business for many years – the boss told everyone what to do, how to do it, and when to do it. There are still a few of these relics.
This leadership style acknowledges the undisputed leadership of the person in charge who commands and controls those in his or her charge. This leader makes all decisions with no, or just the semblance of, input from others.
Needless to say, the younger generations of today don’t take kindly to this type of leadership. The majority of today’s workforce was raised to have an opinion and to believe that they can do anything they set their minds to. That attitude doesn’t gel with a leader who tells people what to do and gives them no room to innovate.
Indeed, research has found that employees are less creative in their decision-making under an authoritarian leader.
This leadership style does have its uses though. For instance, in a crisis situation when decisions are time-sensitive, and it’s not productive to wait for everyone’s input, or in situations where experience is the one factor that is most important in the situation. In times when decisive action is needed, authoritarian leadership is the best option.
While under normal circumstances, autocratic leadership can lead to resentment and low morale, in a crisis situation, it can make all team members feel safe, because someone is taking the lead and telling them what to do.
Democratic Leadership
Democratic leadership is the opposite of autocratic leadership. A democratic leader invites input from the team, but makes the final decision. Communication within the team is both top-down and bottom-up.
Democratic leadership has advantages and disadvantages. Some of the advantages include:
- Team members feel more involved as they have a say in how the work will proceed.
- Workers feel they have a say in the future of the organization, leading to greater loyalty.
- If the teams are diverse, democratic leadership can lead to more diverse opinions and greater innovation.
- Leaders can gain immense insights into their workers and what motivates them during deliberations.
But, it’s not all smooth sailing for this kind of leader. When more people are involved in discussions before decisions can be made on how to proceed, a lot of time is involved. Democratic decision-making is very time-consuming and can hold up projects.
Also, more people airing their opinions and giving input, can lead to conflict when those ideas and opinions are too far apart. It can lead to heightened tension among workers, impacting productivity.
There is also the danger that employees may feel hurt or offended if their ideas are not taken on board. All these factors can undermine morale, hamper productivity, and generally impact motivation, causing an untenable atmosphere in the office.
Laissez-faire
The so-called laissez-faire leadership style means the manager leaves everything to the team, so it’s not really leadership in the strict sense of the word. This type of leadership style only works when the workers are experienced, know what to do and are self-motivated. In this situation, problem-solving and decision-making are left to the workers, so there’s no guiding hand.
This style works in organizations that have a flat, decentralized structure consisting of a large, highly skilled workforce. It can lead to increased innovation because no boundaries are set and employees are trusted to come up with their own solutions to challenges.
In the right circumstances, this hands-off leadership style leaves employees feeling that they are trusted, which increases ownership and engagement.
On the other hand, this leadership style can also have disastrous consequences, with employees feeling aimless and teams losing direction. Depending on the people involved, this lack of direction from leadership can result in team members blaming each other for mistakes and not taking responsibility. In this scenario, productivity often suffers and morale plummets.
There is also the risk that employees, left to their own devices, may take matters in a direction that company leadership didn’t envisage and doesn’t want to pursue, which wastes time and resources.
Transformational Leadership
Transformational leadership is about transforming the organization to adapt to changes. A transformational leader inspires employees to innovate and create change that will help the company to be future-ready.
Transformational leaders have a clear vision of how to transform their organization and have the ability to take their teams with them on this journey. These leaders are able to create a vision of the future that everyone can believe in and work towards. They are also hands-off, trusting their employees to be creative and come up with innovative solutions to long-established problems.
Transformational leaders tend to inspire loyalty among their workers because they hold themselves, not only the team, accountable. This is seen as the ideal leadership style for growth-minded companies that want to thrive in a constantly changing environment.
Research has shown that a transformational leadership style encourages employee engagement. The researchers write, ”This style enthuses, inspires and motivates employees to work towards the organizational goals and the leaders are able to draw out the best in the subordinates by expressing confidence in their abilities.”
Transactional Leadership
Transactional leadership is based on a transaction – where the leader rewards work done according to instructions, or punishes work that falls short of expectations. It’s a common form of management. Sales targets and commissions are a common form of transactional leadership.
This leadership style does not encourage hard work or initiative, because employees know how much effort they need to put in to get their promised reward. Any extra work won’t earn them additional rewards.
This leadership style assumes that workers are not self-motivated and need structure and incentives to perform their tasks. It might work for some employees, but it will alienate the talented and creative workers. Transactional leadership works best in an organization that depends on structures and processes and well-defined roles to perform tasks and achieve goals.
Coach-Style Leadership
These leaders identify and develop each individual team member’s strengths for the team to reach its optimal potential. They develop strategies to help the team work better together. This leadership style emphasizes the development of individuals and their skills while building strong communication within the team. Such a leader often ends up with highly cohesive teams where each member has superbly developed skillsets that complement the team’s work.
This type of leader gives employees the opportunity to develop new skills by giving them tasks they’ve never done before, while offering constructive feedback.
This leadership style can be very beneficial for a company, but it’s time-consuming and requires the expertise and effort of more than one coach-style manager. Although it’s a positive approach with positive outcomes, coach-style leadership is not viable in crisis situations or an environment with time-sensitive deadlines.
What is your leadership style?
It’s important to identify your leadership style. It will tell you what kind of boss you are and how your workers are experiencing you.
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” — Maya Angelou. How do you make your employees feel? After interaction with you, do they feel energized or deflated?
If you can answer that question, you’re on your way to finding the answer to the best boss you can be.
To determine your leadership style, you can take this online quiz or another one. When you have found out what your dominant style is, read up on its characteristics and outcomes and identify possible shortcomings. Once you’ve done that, consider leadership training to improve aspects of your leadership abilities.
The need for a leadership style change
You will know that it’s time to consider a leadership training course to help you change your leadership style when the following situations become a regular occurrence:
- Your team is not making any progress.
- Your team members stop talking to you.
- You constantly have to remind team members that you are the boss.
- People are leaving the team.
- Your star employees are underperforming.
- Morale is at a low ebb.
- Deadlines are being missed.
- Your team members are holding back information or honest input.
- You have stopped delegating.
- Your team members are going to other managers or co-workers for advice.
These are untenable situations that need to be addressed by an honest look at your leadership style and how it might be adapted to better serve you, your team, and the company.
Once you know your leadership style and have established that a change is necessary, it’s time to think seriously about adapting or changing the way you lead. Keeping in mind that there isn’t one style that’s perfect in all situations, consider your natural tendencies and the nature of your company, its goals and the nature of your team when you make adjustments.
Sometimes a team might need structure and supervision, and at other times that same team might need more freedom to experiment. If you have adopted a laissez-faire leadership style for a while and find that your team is not making any progress, it might be time to take the lead again.
If you find that you need to change something, but you’re not sure what, consider taking a formal leadership training course to get you back on track. It will not only clarify your own leadership style, but will help you identify leadership skills you may lack and ways to develop them. Research that looked at pre- and post-training engagement scores showed that improvement in leadership skills, through training, led to improved employee engagement, which is crucial for business success. So, attending a leadership training course is an option worth considering.
