Whether you are just starting your own business or have a successful franchise, being a leader is hard and requires a lot of work. However, the impact of the right leadership style can be immeasurable.
The way you communicate with your team, help them reach their goals, provide growth opportunities, and distribute work across the departments can determine the overall success of your company. So, what leadership approach should you choose in today's dynamic business landscape?
If you look through the stories of most successful people, you'll see that great leaders tend to navigate between different leadership styles based on the situation. This is why we have prepared the list of the most common leadership styles to help you get a hold of ways you can approach team members and create your own decision-making tactics.
The Definition of Leadership Style
A leadership style refers to the way the leader approaches his employees or followers in order to inspire, direct, and supervise them. These include various methods and behaviors as well as good communication skills.
Leadership style heavily impacts managing expectations from the shareholder or higher standing instances at the same time, taking into consideration the state of each team member. This is especially visible when various management changes occur, and leaders must act accordingly.
Choosing a leadership style can be heavily influenced by aspects like:
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The personality of the employee;
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Employees' status in the company;
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The amount of time the person worked in the industry/company;
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The reason for intervention;
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Yearly evaluation results;
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Relationships with other employees.
Usually, leaders have one leadership style that they choose for most situations. Sometimes, it can happen subconsciously due to the developed habit. However, new skill development, learning various leadership styles, and continuous improvement are essential for business success.
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How Essential Is Knowing Different Leadership Styles?
As was mentioned before, leadership style relies on many personality traits of the employee, taking into consideration their differences and life situations. Understanding your leadership style will bring out self-awareness for every action to react to different combinations of traits accordingly. This way, a leader can not only build strong relationships but increase the efficiency of employees' work.
Another important thing is to be able to change leadership approaches based on what actions the situation requires. You are a leader, so you must take responsibility and change your attitude when needed to achieve the organization's goals.
Knowing your leadership style is also helpful if you seek feedback from your employees. If your team members trust and rely on you, they can always come to you for advice or with a specific work problem.
There are not many ways for people to speak about what is bothering them in the office. So, this way you can improve the work atmosphere as well as provide additional bonuses.
Some benefits of knowing your leadership style also include:
The Top of Most Common Leadership Styles
As we have learned, you, as a leader, must not only have a deep understanding of your team members but be flexible based on different circumstances. So, what is the most effective leadership style for each situation?
Democratic Leadership Style
Democratic leadership is based on making a decision based on the input of the individual team members. This leadership style provides an opportunity for every team member to participate in the project. However, the leader makes the final decision.
Democratic leaders allow every employee, no matter the company's ranking, to express their opinions. This style is the best way to present the decisions made in the board meetings.
However, potential issues can still occur. Establishing democratic leadership requires time and resources, and sometimes, decisions must be made ASAP. Another problem can occur when the person is without expertise on the matter.
Why is this leadership style effective?
Most leaders tend to choose democratic leadership since it encourages creative thinking, collaboration, and engagement between team members since everyone can take part in the decision-making. People gain more interest in the process since there is room for many opinions.
The democratic style also usually involves delegation of responsibility or workload. This way, leadership roles are distributed based on the knowledge of each manager.
Transformational Leadership
From the name transformational leadership, you could have guessed that the main focus is course transformation. Transformational leaders believe in their team members like no one else. They have high-bar goals for everyone and encourage employees to leave their comfort zones in order to achieve incredible results and professional growth.
Transformational leaders have very high expectations; they want their team members to be the best and change every part of their life beyond work to become their best selves.
Key characteristics and leadership skills required for this style include advanced communication abilities, high intellect, and emotional intelligence. There are 3 main focus points of transformational leadership:
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People - everyone has potential and transformational leaders help go beyond one's limits;
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Companies goals and future - a leader is focused on the long-term goals and creating a shared vision with the core values of the company in mind;
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The transformation itself - a company can not be successful without change, so everyone must be ready for it all the time.
Transformational leadership might not be for every company or employee due to differences in leading tactics and general workflow speed. For some, this tension can be too much and lead to burnout or loss of interest in the job. Another issue might occur when the task is delegated to someone without experience or needed training.
Why is this leadership style effective?
By encouraging their employees to go beyond their capabilities, transformational leadership not only promotes new ideas but boosts productivity as well. Since the employees are motivated, it's in their interest to work more efficiently, bringing more profit to the company.
The team members also have a boost of self-belief, especially after evaluations that show their continuous progress. The growth is gradual, but the growing work challenges expand teams' capabilities with continuous learning.
Autocratic Leadership
The autocratic leadership style is the complete opposite of democratic or any other participative leadership style. Autocratic leaders make decisions without any tram suggestions, taking all the responsibility and acting on their behalf.
The employees are not consulted before making a decision and are expected to follow the leader without questions. Autocratic leadership comes together with a strong understanding of authority and sometimes fear.
Unfortunately, autocratic leadership has no ground for creativity as well as potential growth. Employees have no interest in product growth and development since they have no influence on the matter.
One of the best examples of the negative effects of autocratic leadership is conducting changes in the workload without consulting the worker. This can lead to setting unreachable goals and losing both employee loyalty and revenue.
When is this leadership style effective?
Autocratic leadership is very effective when decisions must be made unexpectedly and on a very important matter. For example, in a state of emergency, if the responsible party has deep expertise on the matter.
Transactional Leadership
Transactional leadership is based on a reward system. The team members are motivated by achieving the results set by the company. The names come from the established work-reward transaction that usually revolves around monetary compensation.
Transactional leadership establishes roles and a set of responsibilities for everyone on the team to accomplish the set of goals according to the schedule. The employees can also expect higher rewards for working way ahead of the schedule and having done more than was required. The leader is maintaining a status quo, focusing on reaching goals and general outcomes.
Unfortunately, when everyone is only interested in the results, relationships with the team members can suffer a lot. Since everyone is concerned about their results, with such leadership styles, collaboration and helping other employees are almost always out of the picture. This can be a reason for lack of interest, less job fulfillment, and higher workload turnover.
Why is this leadership style effective?
Transactional leadership is mostly spread in selling departments. There is a clear distribution of responsibility, and all employees know what to expect for the amount of work that was done.
The reward system is very easy to understand. The focus is always on the results, and reaching them is beneficial for both management and employees. There is also constant productivity monitoring, which can be helpful in various decision-making situations.
Authoritative Leadership
Authoritative leadership revolves around following the lead of a particular person. Authoritative leaders think of themselves as teachers and mentors to their employees. With a clear direction in mind, they encourage everyone to follow them and their goals.
Authoritative leadership employs learning about every member on a deeper level. This way, everyone can receive the required guidance and attention from the leader.
However, constant involvement can lead to micromanaging and a lack of creative ideas. These leader's methods can be too much for many employees who want to have a more individual approach and take full responsibility for the work.
Why is this leadership style effective?
Authoritative leadership highly relies on inspiration and motivation from the leader, thus creating a healthy environment. Employees feel encouraged and have a feeling of achievement. The league has an understanding of everyone creating a personalized approach for everyone.
Visionary Leadership
The visionary leadership approach is all about the long-term company goals. The employees are connected by a shared vision and are motivated to achieve certain accomplishments.
Visionary leaders are great communicators. They have a power of persuasion and encouragement. This helps employees focus on the potential good outcomes rather than thinking only about the issues.
Visionary leaders develop a tendency to focus too much on the long-term goal. This can lead to ignoring the current issue or potential blocks along the way. Sometimes, they can also concentrate on one specific goal, ignoring other opportunities and ideas.
Why is this leadership style effective?
With an effective leader, the team is highly motivated and engaged in their job. Having a shared goal connects people and encourages them to work together. With encouragement and expertise from the leader, people are aware of the potential issues as well as the result, so they are more confident and spartan about the plan.
Laissez-Faire Leadership
Laissez-faire leadership is more about trust and not involvement. Laissez-faire leaders provide their employees with all the necessities, like various tools, information sources, and others, allowing them to complete tasks without any involvement.
Team members do not have any initial plan or supervision and have to come up with a strategy for people-solving organization, and decision-making themselves. The projects are still assigned by the leaders, but how you finish them is not their concern.
All responsibility for the projects is in the hands of team members. This is very common for start-ups and small companies. This leads to less interest from the manager when compared to other leaders.
However, there are instances when supervision is a must. For new employees, starting a job without any knowledge can be hard with laissez-faire leadership. Such an approach can also lead to chaos, confusion, and no efficiency, which is completely the opposite of what the leader's goals must be.
Why is this leadership style effective?
Laissez-faire leadership promotes complete trust in their employees. This works best in the spheres of highly skilled specialists and creativity-oriented businesses. People are less stressed about constant supervision and are more independent.
Conclusion
There are many different leadership styles to choose from. The goal is to find the correct approach for your particular situation and be flexible.
Surely, some leadership styles can be closer to heart than based on your personality and the industry you work in. However, you should always be open to new options. This way, you can create the perfect balance by considering your employees' well-being and keeping your business goals in mind.
