It takes a great leader to build a great team. However, there is no one size fits all perfect leadership style. As different as these upcoming leader types are, they share their ability to be unafraid to make difficult decisions, lead phenomenal teams, and achieve their goals.
Good to great
by Jim Collins
⏱ 16 minutes reading time
🎧 Audio version available
Authoritarian Leadership
First up, we have the authoritarian leadership style, also known as the autocratic form of leadership. This refers to the type of leader who gives orders without expecting questions from their team and subordinates.
A famous example of an authoritarian leader is none other than Steve Jobs. Due to this leadership style, Jobs made Apple stand out in a sea of tech companies. However, he was known for his reluctance in delegating tasks. Instead, he found a balance in leading by example and empowering his staff.
The job of defining outcomes and, by extension, setting expectations falls onto authoritarian leaders. To put it shortly, all sorts of decision-making within the business, department, or organization fall to them. Here are the pros and cons of this leadership style:
Pros:
- It’s incredibly efficient. Out of all five leadership styles, the autocratic style is the most efficient and works best for deadlines and time constraints.
- Works when the team needs clear guidelines.
- The time the business spends on making decisions is greatly reduced.
- There is a clear hierarchy and chain of command.
- An authoritarian leader often delivers consistent results.
Cons:
- The team’s creativity is sacrificed under the strict authority of the leader.
- A too strict authoritarian leader can result in conflict with the employees.
- Lack of innovation.
- High employee turnover rate.
Laissez-Faire Leadership
Next up, we have the complete opposite of an authoritarian leadership style.
A ‘laissez-faire” or delegative style involves a leader who focuses more on letting go of the concept of hierarchy and focuses more on delegating the decision-making to team members.
It’s a “hands-off” laid-back approach, to put it mildly. It’s in the name! “Laissez-Faire” loosely translates from French as “do as you will.”
The advantages of this leadership style are numerous. For one thing, there is no limit to how creative the team can get as both creativity and innovation are always valued. In addition, this approach to leading a business allows the team to manage themselves in a calm, creative environment. The leader’s job is to provide the necessary resources and information for the team and trust them to achieve exceptional results.
As a result, employees feel trusted and valuable to the company, which gives them confidence when performing tasks.
However, that positive work environment can quickly turn into a negative experience if the leader isn’t careful. At times, conflicts and divisions may occur within the team, which leads to lowered motivation.
A business where deadlines are absolute and crucial doesn’t fare well with a “laissez-faire” leader because of how uninvolved the leader is. This means that poor performance can be overlooked. This also happens because command responsibility isn’t clearly defined. The lack of leadership leads to a lack of direction in the business.
A famous example of this type of leader is Warren Buffett, Berkshire Hathaway’s CEO and one of the wealthiest people in the world. Buffett, known as the “Oracle of Omaha,” is considered one of the greatest investors of all time. So it comes as a surprise that he’s a laid-back leader who allows his manager’s full autonomy. His business is described as an environment where employees feel confident and motivated.
As to why he chooses not to follow in the footsteps of the likes of Steve Jobs, to quote his 2010 Annual Report, Buffett said, “We tend to let our many subsidiaries operate on their own, without our supervising and monitoring them to any degree. As a result, most managers use the independence we grant them magnificently by maintaining an owner-oriented attitude.”
Participative Leadership
Also referred to as a democratic style of leadership, participative leadership is a style that is rooted in allowing collaboration and consensus. Unlike the authoritarian or laissez-faire styles, team members are encouraged to participate in all decision-making processes. The leader still gives commands and orders, but input from the team is highly valued and often used.
The employees are often given a chance to freely express their ideas and bring up suggestions and concerns to the leader. Eventually, when it’s time to make a final decision, the leader makes it after consulting his team. An example of how this leadership works is if there is a massive, company-wide problem. Then, the employees are informed about the issue, and a majority vote agrees on a solution.
Businesses that adopt this style often reap the following benefits:
The leader is greatly admired. The team maintains a healthy respect for the leader and provides cooperation. Because they’re included in important decisions, employee morale dramatically rises because they feel they have a voice. In addition, they’re more likely to agree with workplace policies.
Employees have a low turnover rate because they feel engaged. This sort of business allows them to feel incredibly included. They’re even more motivated because of how much they’re allowed to contribute. If there are disagreements within the team, the leader has the last word. Creativity finds a home in a team led by this style, and a high level of productivity is practically guaranteed.
There are a few fall-backs to this. The same things that can be advantageous can quickly turn negative. If the group disagrees, decision-making can be time-consuming. And miscommunication or communication failures can often occur. If the employees are inexperienced or unskilled, this can lead to poor decisions.
Transactional Leadership
Entirely different from the previous styles, a transactional leadership style relies on an exchange system to get the work done. The leader informs team members of a goal and offers rewards, punishments, or some sort of exchange.
It’s more like a “give and take” system. Employees are rewarded for achieving goals and punishment if they don’t. Transactional leadership works perfectly for short-term planning. Usually, the leaders are more concerned with following routines and procedures and being as efficient as possible.
Of course, this works great if a time-bound, specific goal needs to be reached. Employee motivation shoots through the roof because of the rewards waiting. As a result, productivity also increases dramatically.
Unlike the laissez-faire method, there is no confusion about the chain of command. The system is easy enough to implement for the leaders, and it’s easy enough to follow by the employees.
The downside is that the leader is likely to be more focused on finishing the work and making sure that the team finishes their specific tasks; since this is centered on short-term planning, there isn’t much room for innovation and creativity. Empathy among the team is minimal.
Transformational Leadership
There’s a vision in the leader’s mind, and they work their hardest to encourage and empower their employees to achieve that vision. This is a leadership style that involves a lot of participation and input from the team.
The leader serves as a role model for the vision. It’s their job to communicate any changes to the vision and to be motivational. Employees tend to mirror the leader’s motivational attitude, resulting in a low turnover rate, as they feel supported within the company.
A famous example of a transformational leader is Virgin Group’s Richard Branson, whose approach to leading is:
“If you can motivate your people, use their creative potential, you can get through the bad times and enjoy the good times together… if your employees are happy and smiling and enjoying their work, they will perform well.”
Other examples include Oprah Winfrey and billionaire hedge fund manager, Robert C. Smith.
The advantages of such an approach to leadership include the high value placed on corporate vision and relationships in the team. The employees experience higher morale and motivation. In the process of achieving that vision, learning and development are encouraged.
However, constant and consistent feedback is required from the leader. They have to keep the team feeling motivated and inspired, and so they have to provide a frequent stream of feedback about their progress to be successful. Success is unlikely if the leader can’t get the employees to fall in line or agree with the vision.
And these are the five types of leadership styles explained! Remember that each leader can develop their own unique style. They can even combine or switch between styles.
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