Types of Leadership Styles: Which is Best for You and Your Organization?

Look in any type of organization and you’ll find a variety of leadership styles. Different company cultures attract different personalities and perspectives, and there’s certainly no ‘one-size-fits-all’ approach. However, as the world of work is rapidly transforming, companies need to realize that retaining top talent with leadership potential is more important than ever. Ultimately, these rising stars will bridge the gap between a company’s present and future success. That’s why it pays off to invest in leadership development programs – especially with the challenging times the workforce landscape is facing right now. In this article, we’ll talk about different types of leadership styles and their pros and cons. Understanding these classifications can help businesses to identify talents in their teams and coach them to become the leaders of tomorrow.

1. Intro: The Future of Leadership is Changing

As the future of work is changing, so too is the future of leadership. The answer to the question “what makes a great leader?” is likely to be very different today than ten years ago. Disruptive events like the pandemic shifted people’s attitudes toward their employers, as traditional power dynamics changed and the boundaries between work and private lives got blurred. This caused many leaders to reevaluate their skills and mindsets.

At the same time, Millennials and Gen-Z are beginning to integrate into the workforce, bringing a whole different set of expectations and values to the office. As future leaders, they highly value personal development, both for themselves and their teams. They want to work for organizations that provide purpose and meaning, as well as create psychologically safe spaces for employees to speak freely and be their true selves at work – regardless of their gender, religion, color, or sexual orientation.

Then, there’s the role of digital technology, artificial intelligence and increased connectivity in our society. These developments have completely transformed how businesses operate, how people work, and how we view which leadership styles can best guide those processes. In these disruptive times, a ‘let’s wait and see’ attitude is rarely effective. Successful leaders of tomorrow know how to stay ahead of the curve and leverage technology and data analytics to drive the best results from their teams. That’s why companies need to help their current and future leaders to meet the challenges of technological disruption, for instance by putting a higher emphasis on training and upskilling them to be prepared for the future of work.

Leadership is changing before our very eyes. What made a great leader 50 years ago or 25 years ago, will not likely make a great leader 10 years from now.

TIM RYAN, CHAIRMAN & CEO OF PWC U.S.

2. Importance of Understanding Leadership Styles

The post-pandemic era, new generations transforming leadership roles, and technological developments: all these factors create a new reality. This requires a different approach from both experienced and first-time leaders. However, to understand what makes someone a future-ready leader, first it’s crucial to know what their main leadership style preferences are, which one resonates with them, and which pros and cons come with that particular form of leadership. This way, it’s easier to evaluate the likely effectiveness of that style in any given set of circumstances. It also helps to decide which leadership skills they need to learn and apply to maximize their potential as a leader.

3. Definition of Leadership Styles

Before we dive into the subject of different leadership styles, let’s take a look at what defines a leadership style. Simply said, it’s the method a leader uses to influence, motivate and direct a group of employees to achieve organizational goals. Next to that, it takes into account the way someone approaches the overall business strategy, interacts with stakeholders, and executes plans. A leadership style also refers to someone’s characteristics, skills, and behavior – either developed ‘on the job’ by leadership training or in some rare cases because they have the natural ability to be a born leader.

4. Types of Leadership Styles

How many leadership styles are there? Well, a lot. Over the years, there have been various attempts to categorize leadership styles, based on patterns of behavior, skill sets, emotional intelligence, and specific characteristics.

• Kurt Lewin identified three well-known leadership styles: authoritarian, democratic, and laissez-faire
• Then, there’s American psychologist Bernard Bass who documented two more leadership styles: transformational and transactional leadership
• McKinsey argues that modern leadership leans on four roles: visionary, architect, coach, and catalyst
• And finally, it was Daniel Goleman for the Harvard Business Review in 2000 who organized leadership behaviors into two categories: leadership that boosts performance (visionary, coaching, democratic and affiliative leadership) and leadership that creates dissonance if used the wrong way (commanding and pacesetting leadership)

Sounds like a lot? Don’t worry. Below, we’ll address the most recognized leadership styles in management one by one. Please note that there’s no ‘one size fits all’.

Effective leaders have the versatility to apply different leadership styles in different situations and with different groups of people, while always staying true to themselves. Or at least, they are willing to learn.

Authoritarian or Autocratic Leader

Just a few decades back, authoritarian leadership, also known as commanding or autocratic leadership, used to be the norm at many companies’ executive levels. Autocratic leaders are firm, focused, and not very open to input or feedback from their team. They alone make the decisions. Most organizations today realize that this tough and uncooperative style doesn’t bring out the best in their employees and can even lead to an unhealthy work environment.

Pros: This type of leadership can be effective when a company needs to make difficult decisions and a clear sense of direction is needed.

Cons: This method is usually viewed as controlling, bossy, and dictatorial. It lowers morale and stands in the way of creative problem-solving.

Works best: The military or compliance-heavy industries.

A Gallup poll of more than 1 million employed U.S. workers concluded that the No. 1 reason people quit their jobs is a bad boss or immediate supervisor.

75% of workers who voluntarily left their jobs did so because of their bosses and not the position itself. In other words, despite how good a job may be, people will quit if the reporting relationship is not healthy.

JULLIETTE PLANTENGA, STRATEGIC ACCOUNT MANAGER AT LEPAYA

Democratic Leader

Contrary to autocratic leaders, democratic leaders allow everybody’s voice in the team to be heard. In the decision-making process, democratic leaders consider the ideas and insights of other people, giving them the chance to show their strengths and share their knowledge. This style is also known as the participative leadership style, as it drives participation, teamwork, and personal accountability.

Pros: This style usually leads to higher levels of employee engagement, retention, and workplace satisfaction, as people feel empowered and valued. It stimulates a creative mindset and encourages inclusivity.

Cons: There’s a risk of inefficiency as it might take longer to come to a mutual consensus. Also, this popular leadership style slightly suffers from the new, hybrid workplace because of the lack of spontaneous encounters at the office.

Works best: Tech start-ups, scale-ups, and the creative industry

You might also like: what First-Time Leaders can Learn from the Democratic Leadership Style

Laissez-faire Style

This passive style of leadership gives employees complete freedom, as there is no interference or supervision from above. Managers trust their teams to function independently and motivate themselves. They are given the right facilities to do their work, but the employee determines what is the right or wrong course of action, and takes responsibility for the outcome. Laissez-faire leaders are excellent at delegating and empowering their employees.

Pros: This style works well with skilled and experienced professionals, who appreciate the autonomy and trust they get from their leaders. This can lead to creative and innovative ideas.

Cons: People can become insecure, as it’s not always clear what is expected from them. Also, not everyone can handle the responsibility of this style. Some may take advantage of this method and slow down, no longer going the extra mile for their company. Others simply need more guidance.

Works best: Organizations with self-managing and self-regulating teams.

Transformational Leadership

According to Gartner, transformational leadership is a leadership style that involves articulating and developing a shared vision, and fostering a working environment of mutual trust and loyalty. It’s all about creating an organizational culture where leaders inspire their teams to realize that shared vision.

Pros: These types of leaders allow their teams to perform beyond expectations, helping each group member thrive in their career. They usually create a very positive and motivational atmosphere.

Cons: A lack of focus on details and a clear structure, as these types of leaders tend to concentrate on the bigger picture.

Works best: Agile companies that require thinking outside the box and a shared vision, like start-ups.

Transactional Leadership

Where transformational leaders encourage their employees to become their best selves, transactional leaders focus on the job that needs to be done. It’s based on the principle of transaction: in exchange for meeting predetermined goals within an agreed time limit, managers offer their employees an incentive for their contribution (like a bonus or extra pay). When they perform poorly, they will have to face the consequences. Employees know exactly what is expected from them, but presuming workers only need one form of motivation (a reward) is outdated.

Pros: Transactional leaders offer clarity and structure, and as long as the set goals are achievable it can increase productivity and team spirit.

Cons: Low creativity and fear of punishment for not meeting deadlines or targets.

Works best: Big corporations with clear structures, systems, and procedures.

Coaching Leadership Style

Coaching leaders believe in identifying and nurturing the individual strengths of employees. Just like a sports coach or parent they give guidance, support, and constructive feedback, so team members can develop and achieve their true potential. These leaders are all about mutual respect, individual growth, compassion, and two-way communication.

Pros: This type of leader drives team spirit, employee engagement, and a positive atmosphere where people have a sense of belonging.  

Cons: It doesn’t always lead to quick wins and efficient results, as investing in individual team members can be time-consuming.

Works best: Almost any company that is not solely result-driven. More and more organizations recognize the value of coaching leaders and invest in training their leaders to adapt to this leadership style.

Learn more: Find out how online supermarket Picnic develops new generations of leaders using Lepaya’s Leadership Essentials program.

Servant Leader

This leadership style focuses primarily on the growth and well-being of employees without treating them as subordinates. This non-authoritarian leader’s primary goal is to give their teams the support they need to develop their skills. As a result, they will achieve higher personal and organizational goals. They don’t prioritize their own objectives but serve ‘the greater good’, by putting their people first and giving them the right tools to thrive.

Pros: Teams feel empowered with this type of leadership. They have the ability to create a great working atmosphere, resulting in higher job satisfaction and lower turnover rates.

Cons: Servant leaders can sometimes be perceived as lacking authority. This can undermine their vision and goals.

Works best: Any company that adheres to a modern-day business strategy, puts its people first, and recognizes the value of a bottom-up strategy.

Empowered leaders share power with their employees, give them decision-making authority and express confidence in their employees’ abilities to perform their jobs. Those leaders empower their teams to become the best version of themselves, both professionally and personally.

JULLIETTE PLANTENGA, STRATEGIC ACCOUNT MANAGER AT LEPAYA

Situational Leadership

Many successful leaders of today use a combination of styles to meet the needs of a situation or team, as they recognize that effective leadership is hardly ever one-dimensional and can not be linked to one approach. These leaders apply situational leadership.

Pros: This type of leader often is a great communicator and has a sharp eye for individual and organizational goals, needs and challenges.

Cons: Less stability and consistency if a leader’s approach changes too often.

Works best: Companies that have to deal with situational flexibility, such as hybrid work environments. Also ideal for startups, where deadlines and sprints are interspersed with less intensive periods.

Transitional Leadership

When a company is going through a major change, like a merger or a relocation, it might be necessary to have somebody take the lead for a limited amount of time. This is called transitional leadership. The goal of a transitional leader is to define a clear direction during this transition, guiding an organization and its team through complex times. It’s usually a person or group of individuals who are highly experienced and already operate on an executive level. It’s not so much a leadership style, as transitional leaders can both be coaching or directive, but rather a strategy that depends on a given context.

Pros: Transitional leaders provide guidance and a sense of security during challenging times. They also ensure the continuity of a company’s daily business.

Cons: As they are temporary, there is less time to build meaningful relationships that are based on trust and mutual respect. Employees have been known to feel insecure or anxious during transitional times. Because there’s so much going on, these leaders cannot always give the attention and care that is needed to their teams.

Works best: Companies that need a clear vision during disruptive times.

Supporting Leadership

Similar to transformational leaders, supporting leaders focus on the needs and well-being of their team members. However, where transformational leaders take a motivational and inspiring role to confidently lead their teams into the future, supportive leaders especially provide emotional support. They genuinely show concern, take the time to listen, and sympathize when their employees are going through stressful events. Moreover, they provide them with the right tools to cope with these issues or complete challenging tasks.

Pros: Employees feel valued, respected, and cared for.

Cons: These types of leaders need to be careful that the boundaries between work and private lives are not blurred, and have to keep enough distance to give the appropriate support. Also, there’s the risk of individual and collective interests getting out of balance.

Works best: This style can be useful in flat organizational structures, or companies that work with remote or virtual teams, as they tend to feel a bit lost or alone sometimes.

Affiliate Leader

The main goal of affiliate leaders is to create a company culture that is positive, relaxed, and harmonious. It’s a style that especially younger generations relate to, as they highly value happiness, connection, and the sense of belonging to a tribe at work. These leaders solve conflicts calmly and peacefully, celebrate success with their team, and encourage creative thinking.

Pros: This type of leadership creates an inclusive, low-stress, and safe environment. It fuels innovation and employee morale, even during challenging times.

Cons: The downfall of this type of leadership is that it might reduce productivity. Besides, tackling complex problems can become a problem if there is too much focus on avoiding conflicts or negative feedback.  

Works best: Companies with a ‘people first’ approach, that also rely on strong emotional bonds.

Which Leadership Style is the Best?

No leadership style is inherently right or wrong. Every approach is useful in a certain context, and each style has clear benefits and drawbacks. And although an autocratic leadership style has a negative connotation in this day and age, there are times when it can be incredibly powerful.

For example, when Airbnb’s CEO Brian Chesky faced the company’s first major crisis, he learned an important lesson. “A consensus decision in a moment of crisis is very often going to be the middle of the road, and they’re usually the worst decisions. Usually, in a crisis, you have to go left or right”, he said. In other words, where Chesky always took a collaborative and coaching approach, he now had to adopt a control-driven style. It earned him a tremendous amount of respect within the company, plus a listing in Fortune Magazine’s top 20 of the World’s Greatest Leaders.

It comes to show that good leaders do go first, and lead by example. The key is that they understand how their teams perceive their leadership, and how it affects them. That is why successful leaders are open to feedback, are great communicators, and most importantly, are willing to continuously learn and grow every day.

At Lepaya, we often use the term empowering leadership to describe a Power Skill where future leaders learn how to deal with the challenges and responsibilities of leadership. It includes cultivating a feedback culture, coaching techniques, and learning how to deliver a message effectively.

JULLIETTE PLANTENGA, STRATEGIC ACCOUNT MANAGER AT LEPAYA

How to Develop your Leadership Style

For centuries people have been theorizing about what differentiates good leaders from great leaders, and leaders from followers. True, some are born leaders with ravishing charismatic personalities. They have the natural ability to attract, influence and inspire big groups of people – think Alexander the Great, Martin Luther King, or Barack Obama. But in most cases, people grow into their role as a leader. In fact, Aristotle said that to be a good leader, you must first be a good follower. Some of the great leaders of today weren’t even picked to be ‘most likely to succeed’ in their high school yearbooks. Oprah Winfrey, Alicia Keys and Steve Jobs? All college dropouts who practiced leading on the job learned from peers and developed their leadership skills by walking the path of life.

Read more: The 4 Most Important Skills for First-time Leaders at Scale-ups

In other words: everybody is different, times change, and opportunities, as well as challenges, arise. Often, a leadership style is developed over time. Whether or not somebody is an experienced or first-time leader, it’s never too late to learn new skills or methods. Becoming a better leader is a learning process that can last a lifetime.

Children of today are the leaders of tomorrow and education is a very important weapon to prepare children for their future roles as leaders of the community.

NELSON MANDELA

Conclusion

Understanding different leadership styles and the effect they have on organizations of today is crucial to becoming a future-ready leader. For high-potential employees and first-time leaders, it’s important to realize that there’s no single ‘correct’ leadership style, but there most likely is a style that they are naturally drawn to. This style, or combination of styles, can be further developed by leadership training and practice.

Are you an L&D professional interested in first-time leadership development programs? Learn more about our Power Skill training and visit lepaya.com or be sure to get in touch.