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Types of Leadership Styles: Is One Better Than Others?

Modern organizations are more democratic and networked than their counterparts of 30, 20, or even 10 years ago. Likewise, today’s workforce is very different from those of the days before smartphones and social media. Yet when it comes to motivating and leading organizations, the fundamental goal remains the same: Rally a diverse group of people in many different roles around a common set of goals, and do so in the face of constantly changing markets and business environments.

Being an effective leader starts with discovering the type of leadership style that matches your personality, while also recognizing the need to adapt and adjust that style to the requirements of the present situation. When the Harvard Business Review analyzed decades of leadership research and interviewed dozens of business leaders, it identified six leadership practices that apply to all styles of leaders:

  • Bring people together around a unified aspirational vision.
  • Devise a strategy for realizing that vision by identifying specific actions and potential pitfalls.
  • Recruit and retain the most qualified people to put the strategy into action.
  • Focus sharply on the progress being made in implementing the strategy.
  • Innovate constantly to reshape the vision and strategy as conditions change.
  • Always strive to be a more effective leader by continually growing as a person and manager.

Leadership is about much more than natural charisma. Everyone has it in them to be a great leader by staying true to themselves and to what they know. Once you find the leadership style that best fits your personality and business philosophy, the challenge becomes being flexible enough to alter that style when necessary. Successful leaders know that the best leadership style for one situation isn’t the best for every circumstance. The optimal leadership style for a particular group and work environment depends on many factors, including the skills and personalities of employees, and the strengths and abilities of the group’s leader.

A manager demonstrates leadership ability

Overview of the Different Types of Leadership Styles

Leaders are models: Employees often do as their leader does rather than as their leader says. The Sales Blog points out that the most effective leaders match their actions to their words. That’s why it’s important for leaders to understand how they interpret their surroundings and react to unexpected or unforeseeable events. Consultant David Rooke and Professor William R. Torbert define “action logic” as the way a person responds “when their power or safety is challenged,” as Business 2 Community explains.

Action logic plays a big role in determining how effective a leader is. For example, diplomats, who tend to seek compromises and negotiate with employees, and opportunists, who attempt to benefit personally from the group’s work, are least effective, while organizations led by strategists, who develop and implement well-thought-out plans, and alchemists, who emphasize taking maximum advantage of the group’s collective assets and abilities, have the most success. Strategists see the big picture and respond well when things go wrong, while alchemists are adept at reinventing themselves and their organizations. Unfortunately, only 4% of business leaders can be labeled strategists, and only 1% are alchemists.

In today’s business environments, the most common action logic styles of leadership are experts, who demonstrate great skill and knowledge of the work performed by the group, and achievers, who have proven track records for success in their field. Both of these leadership styles emphasize competence but struggle in the long run because they fail to see the big picture and find it difficult to think outside the box. As CIO notes, the ultimate goal is to become a transformational leader who is able to surpass expectations by reimagining and reinventing the group’s work processes.

Transformational leadership is one of the five principal business leadership styles, along with transactional, autocratic, democratic, and laissez-faire. A useful tool for helping leaders determine which style best matches their personal traits, skills, and experience is the Leadership Development Profile, which the Cleveland Consulting Group explains is “based on more than 40 years of research and a database of over 6,000 individuals worldwide.” The goal of the profile is to identify a person’s primary action logic and to help the person understand how it affects behavior.

The Leadership Development Profile is designed to guide leaders toward the most effective styles. Depending on the unique characteristics of the work group, the most effective leadership style may be any of those listed above, but in most cases it will be either strategist or alchemist. The framework is designed to promote effective leadership styles by suggesting activities that cultivate the traits and skills of strategic thinkers and innovators.

The process of becoming a more effective leader requires both looking inward to gain insight into your own way of thinking and acting, as well as reaching out to people inside and outside the organization to learn more about what they do, who they are, and what motivates them. With a better understanding of yourself, your organization, and the people who keep it running, you’re able to adopt the leadership style that’s best for you, your staff, and your company. Yet true leaders know that the style that’s most effective today could be disastrous in the future. As with strategies and business plans, leadership styles must be flexible enough to adapt quickly to changing circumstances.

Transformational Leadership

The strategist and alchemist levels of the Leadership Development Profile are forms of transformational leadership. The principal characteristic of transformational leadership is constant innovation and improvement. For example, employees typically have specific tasks and goals, in the short term and long term, but a transformational leader will challenge employees to go beyond what’s expected of them to achieve even more and to grow in their jobs and skills.

Transformational leadership is popular in companies and industries that emphasize growth, but succeeding in applying this style requires that senior executives demonstrate a commitment to innovation and workforce independence through their actions. Corporate culture must reflect the trust managers place in their employees, and the same creativity and openness to new ideas encouraged in workers must be exhibited by senior leaders daily.

The characteristics of the transformational leadership model are explained on CIO.com:

  • Motivate and encourage positive growth in employees.
  • Establish a strong moral code for the organization that the leaders exemplify in their actions.
  • Ensure that clear ethical standards, values, and codes of conduct are in place throughout the organization.
  • Create a corporate culture that encourages employees to put the common good of the organization above their self-interest.
  • Place a high value on authenticity, cooperation, and open communication.
  • Train and mentor employees in decision-making skills and taking responsibility for work tasks.

Among the executives identified as transformational leaders are Jeff Bezos of Amazon.com, Reed Hastings of Netflix, and Tim Cook of Apple. Such leaders possess vision and strong personalities that inspire followers to change their views of their work, industry, and world by working together toward a common goal. The health site Verywell Mind describes Bernard M. Bass’s four components of transformational leadership:

  • Intellectual stimulation. Disrupts the status quo, promotes creativity, and gives workers many opportunities to experiment in their jobs and learn new skills.
  • Individualized consideration. Ensures that followers receive the support and encouragement they need to achieve their personal goals and contribute fully to the company’s goals. This requires open communication and the free sharing of ideas.
  • Inspirational motivation. Requires that leaders communicate their vision for the company and instill in workers the same passion and excitement the leaders feel about the work they do together.
  • Idealized influence. Presents the leader as a role model for employees, one they trust, respect, and are proud to emulate.

Transactional Leadership

The behavioral approach to management relies on rewards and punishments to motivate workers. Transactional leadership applies a rigid chain of command and focuses on supervision, organization, and the success of work groups. Verywell Mind presents four basic assumptions of transactional leadership:

  • Workers perform best when a clear chain of command is in place.
  • The primary goal of workers is to follow the instructions of their managers.
  • The best way to motivate workers is through rewards and punishments.
  • To ensure that workers are performing up to expectations, they must be monitored closely.

Transactional leadership is also called managerial leadership. It’s common in team sports, where winning is rewarded with adulation while losing is punished with “rejection and verbal castigation.” Leaders who adopt this style tend to focus on maintaining the status quo rather than disrupting markets. They also feel no need to “sell their ideas and visions” the way transformational leaders do.

Work environments that respond best to transactional leadership are those that don’t require solving complex problems or applying creativity to the work. This style is effective in crisis situations in which people must focus on the tasks at hand and duties are clearly defined. Transactional leaders must explain clearly to workers what’s expected of them, the rewards they’ll receive for good performance, and the consequences of poor performance. To ensure that workers understand their roles and what’s expected of them, leaders must listen to them and respond to their feedback.

Transactional leadership has proven to be effective in large work environments in which productivity depends on structure and regimen. It’s adopted in the military, law enforcement, and multinational companies with large, dispersed work groups. The education-development site Mindvalley lists other benefits of transactional leadership:

  • It rewards workers who follow instructions and are easy to motivate.
  • It’s effective in short-term situations.
  • Workers have a clear understanding of what’s expected of them and the reward (or punishment) they’ll receive.
  • The work structure emphasizes productivity and is easy to reproduce.

While the transactional leadership approach will enable workers to thrive in certain work environments, it will cause them to struggle in others. These are among the problems managers have encountered when using a transactional leadership style:

  • The work environment is difficult to change, so it doesn’t adapt well to new circumstances.
  • The only motivation workers receive is in the form of rewards rather than achieving a shared goal or advancing their careers.
  • The work can be impersonal and limited; the environment discourages creativity and innovation.

Transformational leaders want to influence others, while transactional leaders want to direct them. In many companies, transactional leadership can come across as autocratic and dictatorial. However, when a lot of work needs to get done in a short amount of time, the structure and simplicity of transactional leadership can be the best approach.

Autocratic Leadership

In some organizations, the boss calls all the shots. Autocratic leadership, which is also called authoritarian leadership, gives control over all decisions to one person with little or no input from others. This leadership style can be the most effective in certain short-term situations, depending on the task at hand, the goals of the work group, and the skills and experience of group members.

Verywell Mind examines the benefits of autocratic leadership:

  • Decisions are made quickly, which is particularly important in emergencies and other stressful situations.
  • When the decision-maker is the most knowledgeable person, it avoids “paralysis by analysis,” or the foot-dragging that can occur in overly democratized groups.
  • It’s effective in manufacturing and construction projects with strict deadlines and well-defined tasks, especially to ensure that safety precautions are being followed.

Many problems can arise when leaders adopt an autocratic style. In particular, work group members often feel excluded from having input in the work they’re doing. When autocratic leaders fail to treat workers with courtesy and respect, they appear dictatorial and controlling, which can lead to resentment.

One way for autocratic leaders to avoid hurting worker morale is by listening to the concerns and opinions of everyone in the work group with an open mind, whether or not they act on the proposals offered by their employees. Autocratic leaders can keep their work groups engaged and motivated by encouraging them to share their thoughts and ideas without fear of recrimination, and with the knowledge that their efforts to contribute are appreciated.

As with transactional leaders, autocratic leaders need to be sure workers know what’s expected of them. They must also ensure that workers have the tools and resources they need to do their jobs. It’s important for autocratic leaders to be reliable and to acknowledge the accomplishments of individual workers.

Many leadership experts believe organizations have become too democratized and need to return to top-down leadership to keep up with the fast pace of change in modern businesses. Forbes.com points out that much of the appeal of this contrary opinion is that it runs counter to prevailing leadership approaches. However, as a leadership style, autocracy describes not what leaders do but rather how they appear to others in the organization.

Senior managers and top executives typically have moved through the ranks of the organization, and, in the process, they’ve gained experience and attracted competent direct reports. They tend to become more democratized and less autocratic as they reach positions of higher authority. Most importantly, they know that coming on strong and being “bossy” may be effective in short-term emergency situations, but in the long run, such a leadership approach will only cause resentment.

Democratic Leadership

The distinguishing characteristic of democratic leadership is group participation, which explains why this leadership style is also referred to as participatory leadership. This style depends on an open exchange of ideas, free-flowing discussions, and equality among group members; the leader serves as moderator, guiding and controlling the group activities.

The primary duties of democratic leaders are to decide who participates in the group and who in the group contributes to making specific decisions. This leadership style is credited with boosting productivity, enabling all group members to contribute to decision-making, and enhancing the morale of group members. Still, the final decision is made by the group leader.

Verywell Mind lists the characteristics of democratic leaders:

  • Judiciousness
  • Competence
  • Creative thinking
  • Openness and truthfulness
  • Expertise
  • Willingness to take risks

Democratic leaders base their decisions on values and moral principles; they trust and respect all members of the group, seek out their thoughts and ideas, and value dissenting opinions. Democratic leadership runs into problems when the lines of communication are blocked, when group members are unsure of their roles or the duties of others, and when group members lack the skills or experience to bring any value to the decision-making process.

Early researchers into types of leadership styles identified democratic leadership as one of three primary management approaches, placing it at the midpoint between autocratic leadership and laissez-faire leadership, which is described below. Money-Zine.com points out an important intangible benefit of democratic leadership: When group members feel that they have some ownership in business decisions, they’re more likely to make an extra effort to ensure that the decisions have a positive impact and achieve their goals. Also, as more people contribute to the decision-making process, the group generates more ideas and is less likely to miss any important aspects of the subject matter.

Situations in which a democratic leadership style can be counterproductive are those in which speed is of the essence. The group collaboration process takes time. If the group lacks the required experience to contribute meaningfully or if fast action is required, democratic leaders should be flexible enough to adopt a transactional or an autocratic approach, at least until conditions are more favorable to the democratic style of management.

Laissez-Faire Leadership

Management software vendor Perkbox refers to the laissez-faire leadership style as the “do less, get more” approach to management, with only a hint of sarcasm. Laissez-faire leadership, which Bizfluent notes is also called “delegative leadership,” is experiencing a renaissance of sorts after falling out of favor in recent decades. The concept appears to fly in the face of the business truism that the more effort you put into your work, the more rewards you’ll realize. However, the term dates back to the 1930s, when management researcher Kurt Lewin identified it as one of the three primary leadership styles, along with autocratic and democratic leadership.

Over the ensuing years, laissez-faire leadership became associated with personal characteristics of laziness or disinterest in a leader, rather than as an approach to managing groups or making business decisions. More recently, the laissez-faire leadership style has been adopted successfully in organizations in which employees are “intrinsically motivated,” according to Bizfluent. This means they have an inner drive to achieve goals and honor a value system. For these employees, no external motivation or incentives are required to ensure that they’re committed to the success of the group and the company.

Laissez-faire leadership is effective in business situations that involve managing “hardened experts” who often know more about the subject than their managers, as Perkbox explains. An example of a project that benefited from laissez-faire leadership was management of the planning of the Hoover Dam in the 1920s by Herbert Hoover, who was then secretary of commerce. By staying out of the way of the expert engineers working on the massive project, Hoover made it possible for the engineers to devise novel approaches to the unique logistical problems the construction presented.

The primary criticism of the laissez-faire leadership style is the high price organizations pay when they fail to spot small problems before they become big ones. Even when a manager is working with an expert group of workers, failure to monitor their activities can be a recipe for disaster. Ensuring that tasks are completed on schedule can’t be left to trust, and lack of communication with employees can lead to confusion and increased stress. That’s why an important aspect of laissez-faire leadership is that managers make themselves available to consult with employees and offer feedback. They must also remind employees to ask questions when they need to and to submit progress reports regularly.

The ‘Best’ Leadership Style Is What’s Best for Right Now

Seasoned leaders benefit from applying a management style that’s a unique blend of their skills, experience, and personality, combined with consideration of the present and future needs of their staff, customers, and the entire organization. As in other aspects of business management, there’s no one-size-fits-all approach to leadership. The challenge of finding the most effective leadership style is knowing when the approach that worked yesterday is ill-suited to the needs of today and tomorrow.

Leadership is a balancing act between the tried and true and the new and untested. Strategic thinkers tap into their own creativity and the innovative ideas of others, whether on their staff or outside the organization, to devise solutions to problems that may never have existed before and may never occur again. Leading a group of workers, a company, or an industry depends as much on calculated risk-taking as on sticking with approaches that have proven effective in the past.

Recommended Reading
Organizational Leadership and the Future Development of Project Management
How to Navigate Organizational Change
Future Business Trends That Tomorrow’s Leaders Should Know

Sources
Bizfluent, “Characteristics of Laissez-Faire Management”
Business 2 Community, “Strategic Leadership: What Your ‘Action Logic’ Says About Your Leadership Style”
CIO, “What Is Transformational Leadership? A Model for Motivating Innovation”
Cleveland Consulting Group, The Leadership Development Profile
Forbes, “The Need for Autocratic Leadership Is Half Right”
Harvard Business Review, “The Fundamentals of Leadership Still Haven’t Changed”
HubSpot, “The 8 Most Common Leadership Styles & How to Find Your Own”
Mindvalley, What Is Transactional Leadership and Why It Matters
Money-Zine.com, Democratic Leadership
Perkbox, “Laissez-Faire Leadership: Benefits and Pitfalls”
ProofHub, 7 Common Leadership Styles: Which Type of Leader Are You?
The Executive Connection, “9 Common Leadership Styles: Which Type of Leader Are You?”
The Sales Blog, “All You Need to Know About Leadership Styles”
Verywell Mind, “Autocratic Leadership: Key Characteristics, Strengths, and Weaknesses of Autocratic Leadership”
Verywell Mind, “How a Transactional Leadership Style Works”
Verywell Mind, “Leadership Styles and Frameworks You Should Know”
Verywell Mind, “The Democratic Form of Leadership: Characteristics, Benefits, Drawbacks and Famous Examples”
Verywell Mind, “Transformational Leadership: A Closer Look at the Effects of Transformational Leadership”
Wisetoast.com, “12 Different Types of Leadership Styles”