An Overview of 7 Popular Business Leadership Styles
Leadership plays an important role in the success of businesses, shaping organizational culture, driving innovation, and inspiring teams to achieve their full potential. Over the years, many models of business leadership have emerged, each offering unique insights and approaches to effective leadership. Here are seven of the most common.
1. Situational Leadership
One of the most widely recognized business leadership models, situational leadership suggests that effective leaders adjust their style based on the readiness and development level of their followers. Developed by Paul Hersey and Kenneth Blanchard, this model identifies four leadership styles: directing, selling, supporting, and delegating. Leaders assess the competence and commitment levels of their team members and adapt their leadership approach accordingly.
According to Blanchard, “Fifty-four percent of leaders use only one leadership style, regardless of the situation, which means that 50 percent of the time, leaders are using the wrong leadership style to meet the needs of their people.”
Tailoring leadership style to each situation is much more effective. By providing the proper guidance, support, or autonomy, leaders can facilitate the growth and development of their employees, fostering a more productive and engaged workforce.
How does this look in practice? When working with a new employee who lacks the necessary skills for a task, a leader may adopt a directive style by providing clear instructions on what to do and when to do it. On the other hand, when working with a highly skilled team member who is struggling with confidence regarding a particular task, a leader might choose a supportive style that motivates the team member to take risks and overcome insecurities.
2. Transformational Leadership
Transformational leadership focuses on inspiring and motivating followers to achieve exceptional performance. Leaders who adopt this model lead by example, articulate a compelling vision, and empower their team members to reach their full potential. By fostering intellectual stimulation, individualized consideration, and idealized influence, transformational leaders create a positive and engaging work environment.
Further, transformational leaders encourage innovation and promote personal growth, which tends to build strong relationships with their followers. Through their charismatic presence, they motivate employees to surpass their own expectations and contribute to the organization’s success.
3. Servant Leadership
Servant leadership emphasizes the leader’s role as a servant to their team. Leaders who embrace this model prioritize the needs of their employees, foster a supportive work environment, and focus on the personal and professional development of their team members. Practicing active listening, empathy, and humility can allow servant leaders to gain the trust and loyalty of their followers. They also serve and support their employees, providing the necessary resources and guidance to help them excel. By putting their team first, servant leaders create a culture of collaboration, respect, and shared success.
4. Authentic Leadership
Authentic leadership highlights the importance of leaders being true to themselves and their values. Authentic leaders are genuine, transparent, and lead with integrity. In being self-aware, they understand their strengths and weaknesses and are comfortable being vulnerable. They build trust and strong relationships with their followers by being open and honest.
Under an authentic leader, employees may feel safe to express themselves and take risks. By aligning their actions with their values, authentic leaders inspire their teams and foster a culture of authenticity, leading to higher employee engagement and organizational performance.
5. Charismatic Leadership
Charismatic leadership revolves around leaders with a compelling personality and the ability to inspire and influence others. Charismatic leaders have a compelling presence and can inspire and influence others through their vision and charm. They captivate their followers, rally people around a common goal or cause, and motivate them to achieve extraordinary results. This model relies on the leader’s ability to communicate effectively and create a sense of shared purpose.
A potential drawback to charismatic leadership is that leaders might use their abilities for self-serving purposes. Additionally, the emphasis on inspiration might crowd out the more practical steps of implementation.
6. Transactional Leadership
Transactional leadership operates on the principle of exchanging rewards and punishments based on performance. Transactional leaders set clear expectations and establish goals, then provide feedback to help their followers understand if they are meeting milestones. They focus on monitoring performance, intervening when necessary, and rewarding or disciplining accordingly. Transactional leaders rely on structures and systems to ensure compliance and achieve desired outcomes.
7. Laissez-Faire Leadership
Laissez-faire leadership entails giving employees a high degree of autonomy and freedom to make decisions and complete tasks. Leaders practicing this model provide minimal guidance and supervision, trusting their team members to take ownership of their work. This leadership style empowers employees and fosters creativity, but it requires competent and self-motivated individuals to thrive.
Laissez-faire leadership tends to work well in creative fields when team members already have a high degree of competence. For example, an advertising firm leader might hire a social media strategy expert to handle a client’s social media marketing goals, or the owner of a clothing boutique might allow the retail buyer to make inventory choices independently, without approval of each purchase.
Conclusion
There is no such thing as a right or wrong style of business leadership. By studying and understanding each one, business leaders can choose the strategy best aligned with their personal strengths and the needs of their team.
