12 Of The Best Leadership Styles To Use In Running Your Business

12 Of The Best Leadership Styles To Use In Running Your Business

There’s no “one size fits all” model of leadership, and different businesses thrive under different leaders. Read on to discover the best leadership style for you.

From the largest country in the world, to the smallest business or brand, there are a dozen different types of effective leadership. Throughout history, these leadership styles have been employed to great success, fame, and even infamy.

Many of us new to the corporate world tend to think that the best leadership style is a firm, resolute and autocratic one. Indeed, as we shall see in this article, autocratic leadership remains a viable leadership style in specific situations.

However, in today’s global culture of inclusivity, diversity and community, the modern leader must adapt their style to work effectively with a modern workforce.

Here, I have compiled a study of the 12 best leadership styles employed by the most successful leaders around the world. From the democratic and servant style, to pacesetting and delegation, in this list there is a leadership style guaranteed to suit both you and your business model.

At the close of the article, we’ll recap so as to decide which of these 12 styles might benefit you the most.

Autocratic leadership

‘Autocratic’ is Greek for ‘self rule’. It is a style of leadership in which one person makes all of the decisions for the company, brand, country or unit. Historically, autocratic leadership has been associated with dictatorships, like that of the Nazi Third Reich, Soviet Russia, or the Roman Empire.

However, autocratic leadership doesn’t have to be dictatorial. Whilst the Roman caesars didn’t directly consult anyone else, the most successful of them still took the needs and wants of their citizens into account. This is where autocratic and totalitarian leadership differs: autocratic leadership considers the needs of its workforce, whereas totalitarian leadership historically does not.

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Autocratic leadership requires quick decision making skills, expertise and confidence (though not hubris), motivation and responsibility. It is best employed only in situations where your workforce is inexperienced, unmotivated, and/or irresponsible.

Laissez-faire leadership

The term laissez-faire revolves around the principle that the individual should be afforded the freedom of independence as a basic right. Laissez-faire capitalism was popularised by Adam Smith’s The Wealth of Nations in 1776, and remains a popular leadership style today.

In a successful laissez-faire leadership, the leader leaves their workforce to run the majority of the business without intervention. They trust in the expertise, motivation, and commitment of their team. A laissez-faire leader tends to interact with their subordinates at the start of a task (to offer guidance and instruction), and at the end (to critique and compliment).

Laissez-faire leadership is one of the best leadership styles on this list for passionate start-ups employing experienced and passionate professionals.

It can be especially beneficial in areas of business which require individuals to have the freedom to create and innovate. It is not useful as a style of leadership over a workforce that cannot be trusted without intensive supervision.

Strategic leadership

Strategic leadership is one of the more interesting leadership styles on this list, and is akin to consultative leadership.

The ideas behind strategic leadership stem from a combination of other competitive leadership styles. The core tenet of strategic leadership is that it is more productive to encourage a balance of leadership and motivation throughout the company, rather than let one single leadership style prevail.

This leadership style depends entirely on the ability of the leader to strategically place members of their core team in positions where they can independently work toward the long term goals of the company.

In other words, strategic leadership works when all executives have the independence and the skill to implement their own business strategies, whilst working toward a common goal.

You might argue that strategic leadership employs tenets of socialist thought. As such, it works exceptionally well when all members of the organisation are bound by a common goal. On the contrary, it would not be effective if one or more executives decided to take a more authoritarian (or autocratic) stance.

Coach style leadership

Think about what makes a great basketball, rugby, or football coach. The person in charge has to be able to nurture the innate strengths of their players, whilst rooting out and work to lessen their weaknesses.

The coach style of leadership is all about creating strong interpersonal bonds between you and your team, whilst promoting your ‘players’ to positions they will excel in.

Naturally, the coach style of leadership works best when a leader’s workforce is already competent and skilled. Just like a coach would pick the very best players for their starting lineup, a leader must be able to deduce which of their employees will shine in executive positions.

‘Coaching’ a business requires time, patience, and clear communication (a good set of skills for any leader to possess). It may take time to nurture the natural business skills of your employees, but once you have, your business will function like a well-drilled team on the field. Everyone knows their role and is an expert at it.

Transformational leadership

Transformational leadership is, as you may have already guessed, all about change. It is one of the best leadership styles for anyone concerned with the growth of their company. A transformational leader starts out by testing the capabilities of their employees with a range of fairly simple tasks.

But, as time goes on, they challenge their employees by changing the difficulty and complexity of the tasks assigned to them. In doing so, a transformational leader injects their workforce with a varied schedule and thus motivational energy.

The hope is that a workforce operating in a sphere of perpetual transformation will be more productive and creative, and the company will grow as a result.

I’d recommend comparing this particular form of leadership with the next on this list (‘Transactional Leadership’), as the two are essentially opposites. Where one requires a leader focused on growth and challenge, the other suits a leader whose goal is to maintain a company’s output, rather than to expand it.

Transactional leadership

Transactional leadership is a passive method of leadership, best suited (as stated above) to those leaders unconcerned with the growth of their business. In a transactional setup, a leader extracts from their workforce only what they put in (typically in financial terms).

Though one of the least inspiring or creative styles of leadership, you’d be surprised by just how prevalent transactional leadership is in the business world. Most nine-to-five office jobs, for example, are overseen by managers operating via the transactional style of leadership.

Their workers perform ostensibly the same tasks everyday, clocking in and out at the same time, and for their work receive the same pay.

In an environment where transformation, change and challenge is not necessary in order for employees to complete tasks, this is an effective leadership style. Be aware, however, that the transactional model encourages workers to deliver a bare minimum, and nothing more.

Bureaucratic leadership

Bureaucracy tends to conjure up images of desks, paperwork, and long queues. Indeed, the word comes from a combination of the French for ‘desk’ or ‘office’ (bureau) and the Greek for ‘rule’ (kratos). Our modern democracies are bureaucratic, in the sense that they employ intensely detailed and strict organisation to their operations.

In leadership, bureaucracy refers to a strict adherence to the policies and targets of the company. A bureaucratic leader pays close attention to the quality of their workforce and the work produced, in order to meet their goals. This style of leadership requires that the leader not stray from the exact parameters of their job description.

For organisations and companies which face high levels of scrutiny, are highly-regulated or open to high levels of risk, a bureaucratic leadership style can be fundamental to that company’s success. On the other hand, bureaucratic leadership misses out on some of the major benefits of spontaneity and creativity.

Authoritative leadership

The authoritative leadership style is akin to autocratic leadership, but differs when it comes to the visionary and motivational qualities of the leader.

To be authoritative, we must be an ‘authority’ on a subject, or in our given area of expertise. That means that the authoritative leader should not only be an expert in their field, but should also have an inspiring vision for where they see their company going.

The autocratic leader leads by strength of will alone. The authoritative leader, on the other hand, leads by the strength of their vision, and the willingness of their workforce to follow them in light of their expertise. Nonetheless, that’s not to say that simply having passion and a vision will automatically inspire deference in your subordinates.

For the authoritative leadership model to be successful, you must be able to listen to your workforce, take their insights on board, and explain clearly to them why you make the decisions you do. At the end of the day, no one will want to work for a visionary, authoritative leader whose vision does not also benefit them.

Pacesetting leadership

As a leader, you’re out there at the front of the pack, guiding the way. In other styles of leadership, you may be looked to to make tough decisions, delegate effectively, or coach your team. But in the pacesetting style of leadership, it’s up to you to lead by example, and set a pace you want your workforce to work at.

Pacesetting is a fundamental aspect of sales. Salespeople are given targets to meet within a certain time. In other words, they’re given a ‘pace’ to work at. A pacesetting leader encourages their team to keep up this pace by working at that pace themselves, and thus showing the team that it’s not only possible, but profitable to do so.

Be careful, however. Setting continually greater goals (known as ‘stretch pacing’) can soon lead to a collective burnout amongst your team members. Rather, the pacesetting leadership style is best employed for short stretches of time, alongside another more sustainable leadership practice.

Use pacesetting sparingly to pull a listless team out of inactivity, or to encourage a young and energetic workforce.

Democratic leadership

Democratic leadership is one of the best leadership styles, as evidenced by its implementation by most world governments and high-performing corporations. ‘Democracy’ comes from the Greek for ‘rule of the people’, and was first used by the Greeks over 2,000 years ago.

A truly effective democratic leader does not make decisions by themselves. Instead, they distribute the power of decision-making, project planning, and strategy implementation amongst their staff. The democratic leadership style recognises the inherent value in many minds working together, as opposed to one mind working on its own.

An effective democratic leader is humble, patient and intelligent, an excellent team-player, and able to be creative with the running of their business. Democratic leadership may not work well with an inexperienced or uninterested team, but it can be especially effective amongst highly-skilled executives, or as a means of managing passionate start-ups.

Delegation leadership

Arguably, delegation leadership may be an effective part of a range of other leadership styles, though it can work on its own, too. Delegation leadership refers to a leader who trusts that their executives are competent and skilled enough in their roles to be entrusted with running teams without much (or any) supervision.

A delegation leader delegates the responsibilities of the daily running of their business to a core, loyal, and trustworthy team of professionals, overseeing a wider workforce. This then frees up the delegation leader to dedicate their time to ‘bigger picture’ issues, such as the long-term growth and direction of the business.

The delegation leadership style can work effectively as part of a democratic leadership style, just as much as it can as part of an autocratic leadership style. However, it will not work without a team of competent professionals that the leader can wholeheartedly trust.

Servant leadership

The term ‘servant leadership’ originated in 1970, when American philosopher Robert K. Greenleaf re-evaluated the basic tenets of leadership. However, in some form or other, servant leadership has been practiced by generations of thinkers and leaders, from Ancient China to the medieval Middle East.

It is also the most unique of leadership styles on this list since, in direct contradiction to all of those styles come before, it centres around the idea that the leader should serve, rather than be served. A servant-leader’s primary role is to help their employees grow, putting the needs of those who work for them before their own.

Though it may sound counter-intuitive, servant leadership works on the simple principle that a workforce whose needs are met, and whose creativity and personal growth are encouraged, will perform better overall. As a result, the company will grow, and the leader’s job (of leading the business to success) will have been carried out effectively.

According to Sen Sendjaya and James Sarros’ 2002 study of this leadership style, many top-ranking global firms employ servant leadership practices. Those who are served well by a servant leader tend to go above and beyond for their employers.

In Summary

There is no single model for leadership which works effectively for every leader, and every business. Some businesses thrive on the laissez-faire, strategic, or democratic leadership approaches, which delegate decision making to the wider workforce, whilst encouraging individual creativity and personal growth.

On the other hand, other businesses stagnate due to inexperience or complacency without an authoritative, coach-like, or transformational leader in charge. Ultimately, the style of leadership which will work best for you depends on two things: the trustworthiness and expertise of your workforce, and your own personal qualities and goals.

About the Author

Georgi Todorov is the founder of ThriveMyWay, a place for online entrepreneurs, bloggers, SEO specialists, and freelancers to find success in their own way.