7 Different Types of Leadership Styles You Should Be Using
Leadership is everything in an organization.
And that applies to anything from a mom-and-pop shop to an Army battalion.
When leadership is lacking, you will see the adverse effects of it.
Everyone on your team starts losing passion.
Productivity plummets.
Customer satisfaction takes a nosedive.
People start getting killed.
Okay, maybe people don’t get killed.
But that could happen in some occupations like construction.
On the plus side, all this poor leadership talk can be put to rest if you read today’s article on 7 types of leadership styles.
The benefits of reading this article are that you’ll:
- Learn about what each key leadership style means in a business context.
- Know when to apply each style — that way, you improve your persuasion and motivation skills.
- Find your employees much more focused and committed toward your organizational goals.
Before we dig into the first type of leadership style, let’s start off with seeing why you absolutely need to avoid poor leadership and how using different styles of leadership is important for business outcomes.
What Happens When You Have Bad Leadership?
Whether it’s an entire country or even a small startup, leaders serve as the catalyst for a majority of the behavior within a group of people.
It’s long been known that there’s a trickle-down effect starting with the leader.
Is your boss treating you poorly? It’s likely that his or her own bosses are acting the same way.
You see, we all have social models whose actions, either consciously or subconsciously, greatly influence our own behavior.
According to the results of an experiment published in the Journal of Applied Psychology, new team leaders mimicked the abusive behavior that their former leader would exhibit.
This reminds us just how important leadership is within an organization.
Yet a survey from ATD revealed that 47% of companies believe they’ll face a leadership skills gap in the future.
Without adequate leadership talent, organizations risk placing people in highly-esteemed positions that have no right being there. As a result, turnover could definitely increase.
As reported by Korn Ferry, bosses are the biggest culprit when it comes to sources of workplace stress.
Why Are Leadership Styles Important?
Leadership should never be viewed as written in stone.
Instead, leaders must be malleable in their approach.
It’s all about situational awareness.
Because sometimes a more traditional and “no nonsense” approach is necessary, while other times you need to be patient and understand your employees’ feelings. Failing to do so could lead to lower employee engagement and even missed opportunities if they have great ideas to share.
For this, you must understand the different types of leadership styles that have been studied over the years.
In this resource, we’ll look at the following styles:
- Transactional
- Transformational
- Autocratic
- Democratic
- Laissez-Faire
- Coach-Centered
- Charismatic
In all probability, you’ve used most if not all of these leadership styles at one point or another in your life.
But understanding when to use each style is where the magic happens.
And although there may be different leadership styles, many of them have similarities between each other.
Even more, there’s certain qualities and skills that all leaders need regardless of their style preference.
For example, according to Harvard Business Review, leaders must be able to:
- Motivate others
- Display integrity and honesty
- Find solutions to problems
- Be motivated by results
- Communicate effectively
So with that, let’s take a look at the first type of leadership style on the list.
Type of Leadership Style #1: Transactional
What Is It?
Transactional leaders rely on social exchange theory in order to manage people.
In other words, the transactional leadership style involves rewards and punishments for employee behavior.
And for the most part, transactional leaders are heavily dependent on a system that’s already been put in place. For this reason, you see transactional leadership among potentially dangerous occupations such as in the military, police and manufacturing plants.
Example
A sales manager offers a $1,200 bonus to whoever closes the most deals by the end of the month.
Best Used When …
- Tasks are time-sensitive
- Staff is self-motivated (sales)
- Being organized and following rules is extremely important
- Team is multicultural
- Instructions need to be very clear cut
Type of Leadership Style #2: Transformational
What Is It?
To inspire, leaders use the transformational style to encourage employees to have a strong sense of passion in their work in order to create a common goal.
Not only that, but transformational leaders try to motivate their peers to come up with better, more creative ideas.
As a direct contrast to transactional leadership, transformational leaders want employees to challenge the status quo.
Basically, employees are empowered to think outside the box and view their work as more than a means to earn a paycheck.
According to a study published in Future Business Journal, there’s a significant positive correlation between transformational leadership and employee motivation.
And as reported by Gallup, just 33% of U.S. employees (much less in other regions of the world) are engaged with their work.
Given those two facts, it goes without saying that a transformational leadership style would be a great match for organizations dealing with disengaged employees.
Example
On the first day of the job, a new acting CEO holds a Zoom call notifying every employee that he wants everyone to consider the positive societal outcomes they could achieve.
Best Used When …
- The company wants to change its culture
- Fresh ideas need to be generated
- Employee morale needs to be increased
- Positive thinking needs to be a staple of the workplace
Type of Leadership Style #3: Autocratic
What Is It?
To anyone who’s seen the show “Succession,” just picture Logan Roy when you hear the words “autocratic leader.”
Autocratic leadership is essentially what we know as authoritarian leadership.
As you’d expect, autocratic leaders have absolute control over their employees and expect no hesitation from subordinates.
Really, it’s a more aggressive approach to transactional leadership.
And if you’re a student of history, then you know that this is by far the most common leadership style that human civilizations have used for thousands of years.
Since it’s closely related to the transactional style, autocratic leadership is often seen in organizations where the stakes are extremely high.
Honestly, this leadership style probably isn’t a good fit for most business scenarios, as it views each individual as another cog in the machine.
Because of that, individuals aren’t really all that valued by the leader.
According to a survey from Quality Logo Products, 49% of employees have quit their job due to a lack of recognition.
So there may be a time and a place for you to use autocratic leadership, but it isn’t recommended to be your default style.
Example
A laborer waits for orders from the construction site supervisor to fill potholes with tar.
Best Used When …
- Stakes are high or even dangerous
- Significant amount of supervision is required
- Tasks entail very specific directions
- Creative thinking has minimal to nonexistent impact
Type of Leadership Style #4: Democratic
What Is It?
As reported by Sideways 6, 82% of employees have ideas to help the companies they work at.
Yet 1 out of 3 employees feel that their ideas are ignored.
However, the democratic leadership style can mitigate this
Democratic leadership, also known as participative leadership, is similar to the transformational style.
At its core, everyone is encouraged to speak their mind and offer fresh ideas.
Moreover, whereas transformational leadership style is used to disrupt the status quo, democratic leadership does not. Insead, it’s more about offering an equal and collaborative work environment.
Example
Upon learning about a poor fiscal quarter, a manager holds a meeting with the marketing and sales teams to ask them how they can turn things around.
Best Used When …
- The team is experienced
- New ideas are needed
- It’s okay to be patient with decision-making
- Employee feedback trumps the leader’s opinion
Type of Leadership Style #5: Laissez-Faire
What Is It?
Laissez-Faire leaders are really hands-off.
It’s perhaps the most empowering type of leadership style for employees since it gives them full autonomy.
As you’d expect, most day-to-day decisions are left to the employees.
But that’s not to say a laissez-faire leader is completely useless. He or she will provide feedback and take ownership when it’s needed.
What’s great about laissez-faire leadership is that nobody can accuse you of micromanaging — which 68% of employees say decreases their morale, according to Accountemps.
Please note that if you have an inexperienced team, then a laissez-faire approach would not be a good choice.
Example
A product manager allows his designers to conceptualize a new product the way they see fit.
Best Used When …
- Employees are well experienced
- Decisions won’t adversely affect the company
- There’s a great deal of trust among the leader and subordinates
Type of Leadership Style #6: Coach-Centered
What Is It?
Leaders that prefer the coach-centered style mold themselves to be a mentor for their employees.
Most of the time, these types of leaders aren’t really into telling employees what to do and when to do it.
Instead, they’ll focus on building relationships with their team members by offering support and guidance when needed.
This type of leadership style is a good fit for employees who are eager to grow and advance in their careers.
In fact, many of your employees may even want to become leaders themselves.
According to a study in the Journal of Applied Psychology, leadership training can result in:
- 25% higher learning capacity
- 20% uptick in performance
And Harvard Business Review finds that coaching has a positive impact on employee engagement.
Example
A manager holds a seminar every Wednesday to teach the team of customer success representatives how to best deal with customers over the phone.
Best Used When …
- The leader is held in high regard
- Employees lack expertise in key areas
- Keen interest in career development is shown by an employee
- You want to build the confidence of an individual
Type of Leadership Style #7: Charismatic
What Is It?
Have you ever met or seen someone that you just immediately felt drawn to?
You know, someone that was just instantly likable?
Most likely, that person was charismatic.
Even more likely, there’s a ton of other people that feel the same way you do about that person.
Charismatic people just have the perfect combination between facial expression and personality.
With that, charismatic leaders inspire people through their charm.
And this type of leadership style is highly dependent on emotional appeal. Rationality is sometimes thrown out the window.
You see, charismatic leaders have the ability to motivate people through the way they communicate.
On one spectrum of charismatic leadership, an enormous amount of energy may be put into working towards a positive outcome. For example, Gandhi used his charisma to help inspire equality around the world.
But on the other hand, charismatic leadership can get groups of people to do horrible things they’re not ordinarily capable of doing. Some of the world’s most morally depraved leaders have often been described as charismatic.
Now, you may think charismatic leadership sounds a little similar to transformational leadership. Granted, a lot of transformational leaders are in fact charismatic as well.
However, the main difference between the two is that charismatic leaders rely solely on their personality and communication skills, while transformational leaders focus on a shared vision.
In a study by Babcock-Roberson and Strickland, it was found that charismatic leadership increases employee engagement. In turn, employees feel more committed to the organization.
Example
During a recession, a supervisor on the sales floor of the electronics department remains positive and tells employees that they’ll make it through the difficult time.
Best Used When …
- Employee morale needs to be stimulated
- Uncertain times are ahead
- The organization needs to make a major change going forward
Conclusion
Your leadership style can’t be a black-and-white thing.
Rather, you must read the situation and apply the style that will be most effective in the context that you find yourself in.
If you don’t already have this level of self-awareness to apply each method in its rightful place, then you’re probably coming off as kind of repetitive and mundane to your workers.
By reading this article on 7 key types of leadership styles, you’ll be fully prepared to get more out of your employees. You’ll more easily pick up on what type of leader your team needs in a particular moment.
And before you know it, productivity will start soaring through the roof.
Now tell me …
Which type of leadership style do you think you’re best at? Which needs practice?
Let me know in the comments below.
Keep AutoGrowin’, stay focused.
