5 Types of Leadership Styles That Influence Business Outcomes

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Posted by Maren Fox - 16 November, 2017

What type of leader are you? What works for one individual or team may not work for the next. While some may argue there’s an inherently wrong way to manage employees, unfortunately there’s no prescribed “right way” to manage employees. Instead, the way you lead a team first depends on your individual strengths, the goals of your organization, and the disposition and competencies of your team members.

To help answer this question, it’s important to understand basic leadership styles. In general, leadership theories or techniques can fit into one of three types:

  • Authoritarian leadership positions the executive at the center of the decision-making process and relies on defined tasks and close monitoring.
  • Participative leadership empowers employees with increased influence and responsibilities and involves them in some decision-making processes.
  • Laissez-faire leadership is negligible in practice and process and enables group members to make all the decisions.

To dig deeper, let’s review five leadership styles that impact business outcomes.

1. Directive Leadership

Do you view employees as subordinates and tell them exactly what to do and how to perform? You may be a directive leader. Also known as coercive management, this instructional technique is concerned with employee compliance. Directive managers pay close attention to their employees’ actions and motivate them through discipline. What’s more, they often employ transactional techniques such as rewards and punishments to drive results.

Directive leadership is hierarchical and  values consistency, control, and predictability above all else and are achieved through the use of coercion and dominance. As you might imagine, in many situations, these managers create a toxic workplace. More than that, organization development expert Peter Block says that while the values of consistency, control, and predictability “purport to create accountability, in fact they prevent it.”

Unlike compassionate, purpose-driven leaders who focus on serving the stakeholders of an organization or community, directive management is motivated by controlling costs, achieving prominence, and self-interest. However, these managers may not be aware they are being domineering. “It is not that we directly seek dominance, but our beliefs about getting work done have that effect.”

2. Transformational Leadership

Leaders who exhibit transformational techniques inspire their staff through communication and collaboration. How so? By creating a natural environment of intellectual inspiration. If you work to enhance the morale—and, when successful, job performance—of your team members, you exhibit transformational tendencies. You most likely serve as a role model that inspires and executes change with your team members.

Transformational leadership is often considered desirable among employees because management works directly with employees to create a vision and identify change. However, it’s essential for managers to balance idealistic thinking with strategy. While they can inspire accountability, it’s important that leaders understand both the strengths and weaknesses of their employees. To walk the walk, they must coordinate tasks with techniques.

3. Servant Leadership

The servant leadership style distributes the wealth of power among an entire team—and it is the servant leader’s role to facilitate this. The servant leader unites their team through common cause, by trusting team members, and by actively listening to their team members’ the ideas and struggles. If you encourage collective decision-making, practice active listening, and focus on the growth of your team—you are a servant leader.

Unlike top-down hierarchical structures, servant leadership encourages collaboration, trust, and empathy. The servant leader unlocks purpose and ingenuity across his or her employees—and, when successful, creates happy, engaged, much more productive employees. Cheryl Bachelder—CEO of Popeyes’ Louisiana Kitchen—recalls her journey to becoming a servant leader, which began with being let go by KFC and joining Popeyes’: “I had a chance to step out of the spotlight; to lead the people to a daring destination; to serve them well along the journey; and to create the conditions for superior performance.” By adopting the servant leadership style, Cheryl turned around a struggling franchise-based enterprise. “Popeyes’ performance results have been remarkable. I only wish I had been humbled sooner.”

However, servant leadership does require long-term commitment. While it has the potential to inspire high employee accountability and loyalty, management must still exhibit leadership tendencies. Ultimately, servant leadership does not exhibit much control over employees. And managers must be confident in both their team members and their own abilities.

4. Participative Leadership

Commonly known as the democratic style, participative leadership has the objective of building commitment and consensus across a team. Like servant leadership, executives ask for input from their team members before making a final decision. However, the key differentiator of participative leadership is that management makes the final decision.

Do you value the input of team members and actively work to  boost morale? Then you know that employees play a role in an organization’s processes. And as a participative leader, you help illustrate how  employees affect organizational change. To avoid the pitfalls of true laissez-faire leadership, however, leaders must exert some element of influence. Ultimately, organizations with a strong structure can benefit from participative methods.

5. Authoritative Leadership

Like transformational managers, authoritative leaders are concerned with long-term direction and foresight. If you employ a “firm but fair” mentality, you may be an authoritative, or visionary, leader. While they provide employees with clear expectations and explanations, they may impart elements of persuasion. However, unlike more authoritarian techniques, leaders still consider employee feedback and communication.

The most effective authoritative managers are those who lead with a clear direction. They lead by example and manage with a high level of conviction—which, in part, inspires employees to follow their guidance. However, with too much control, employee insight and opinions often take a backseat. This limits collaboration and stunts employees’ growth. Successful authoritative teams require leaders who include their employees in the decision-making process.

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Topics: You, Leadership


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