5 Types of Leadership Styles That Influence Business Outcomes

by Maren Fox

November 16, 2017

What type of leader are you? What works for one individual or team may not work for another. Although some may argue that there is 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 the different types of leadership styles. In general, leadership theories or techniques can fit into one of three styles:

  • 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 types of leadership styles that impact business outcomes.

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. Furthermore, 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 goals are achieved through the use of coercion and dominance. As you might imagine, in many situations, these managers create a toxic workplace. In his book Stewardship: Choosing Service Over Self-Interest, organization development expert Peter Block writes that, although 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,” writes Block.

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 your team members’ morale—and, when successful, job performance—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. Although 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.

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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’ ideas and struggles. If you encourage collective decision-making, practice active listening, and focus on the growth of your team, then 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 their employees—and, when successful, creates happy, engaged, and more productive employees. Recalling her journey toward becoming a servant leader in her book Dare to Serve, CEO of Popeyes Louisiana Kitchen Cheryl Bachelder writes, “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,” writes Bachelder.

Servant leadership does require long-term commitment. Although it has the potential to inspire high employee accountability and loyalty, management must still exhibit leadership tendencies. Ultimately, the servant leadership style of management does not allow for much control over employees, so managers must be confident in both the abilities of both their team members and themselves.

Participative Leadership

Commonly known as the democratic style of management, 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, in participative leadership, 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 vital role in any organization’s processes, and 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.

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. Although authoritative leaders provide employees with clear expectations and explanations, they may impart elements of persuasion, too. However, unlike other 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 can stunt employee growth. Successful authoritative teams require leaders who include their employees in the decision-making process.

With so many different types of leadership styles, you’re bound to find one that works with your individual strengths and weaknesses—but also one that helps guide your employees and organization toward success.

Topics: You, Leadership, Leadership and Management

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