“I measure my own success as a leader by how well the people who work for me succeed.”
—Maria Shi, managing director of client growth at PayPal
Leadership styles can generally be divided into two main categories: reward and punishment. Managers and CEOs who tend to be very strict aren’t always as draconian as they seem; in fact, they can be impartial (but fair) and follow through on consequences. Leaders who are friendlier and less rigid tend to motivate workers through example and empathy, making work a collaborative effort and boosting employee confidence and morale.
Both styles can be effective on their own or when combined, and you’ll see examples of each in the major leadership styles below.
This is the old school-kind of iron-fist leadership, with the decision-maker at the top of the organizational hierarchy pyramid. While the autocratic leader does take counsel and feedback, their decision is final, even if it goes against the majority.
This approach is good when decisions must be made quickly and also for new or inexperienced employees. Similarly, teams are kept on task and on time.
There can be a real lack of creativity under autocratic leadership, and it’s usually not popular with employees who may wish to contribute. It can deter initiative and lower morale with employees feeling ignored and restricted. At its worst, it can be abusive.
Participative or democratic leadership
The participative leader looks to their teams to work collaboratively. Decision-making isn’t siloed to particular individuals or departments, but rather contributed to by everyone in the company. Democratic leaders may make the final decision, but it’s usually based on a majority consensus.
Employees feel valued, and the approach can help lower-level employees develop over time. It promotes loyalty, morale, and teamwork.
It’s a slower process, so it can impede decisions that need to be made quickly.
As the name implies, a charismatic leader is one whose own strong personality is compelling enough to ignite passion, excitement, and commitment among their team members. In addition to being magnetic and persuasive, charismatic leaders are fully committed to achieving their objectives.
Employee engagement is high, tied to the confidence built by the charismatic leader.
The leader themself becomes necessary to the success of the organization; this means their absence can be destructive. Also, charismatic leaders can be so focused on their goal that they create a kind of tunnel vision and lose sight of the bigger picture.
This hands-off approach to leadership needs to have the right setting and the right team of employees to be successful. Everything is delegated to the employees: They are told what the company expects and that they are accountable. Under laissez-faire leadership, it’s the team members who make all of the decisions and are responsible to complete all of the projects.
A laissez-faire approach provides support and doesn’t micromanage employees. Organization with experienced employees and small groups inside large corporations can do extremely well with laissez-faire leadership.
Employees who need more guidance may fumble, and the approach can limit employee development. Without oversight and monitoring, standards and productivity can slip.
The transformational leader leads by example, inspiring others to improve their own behaviors and processes for the good of the organization. They share their vision of the future with team members, and everyone works together to achieve it.
The focus is constant improvement, so transformational leadership can keep employees motivated and engaged. It’s also excellent for professional development purposes.
Some employees can fall by the wayside if the training provided isn’t appropriate for their learning style. There’s also the risk of change fatigue, and the approach can cause problems if existing processes that are highly valued are up for transformation.
Rewards and penalties are used by the transactional leader in this carrot-and-stick management method. They expect employees to do the job they were hired for, and the company will reward them as per the terms of their employment contract, including scheduled bonuses for targets met.
Expectations are very clear with a transactional leader, and roles and responsibilities are also clearly established.
The businesslike nature lacks warmth and may lead to low employee engagement. It can also lead to workers doing the minimum amount of work to get by, creating a sort of work-to-rule environment.
The servant leader actually serves their employees by working alongside them, as an equal. Their main thrust is helping others, which includes elevating and developing employees. Titles and positions don’t mean much under servant leadership, but customer service and putting the needs of their team do take priority.
Team members feel appreciated and empowered. Servant leadership promotes trust and morale.
Difficult strategic decisions may be hard to make by a servant leader due to their desire to make workers happy. There is an inherent conflict of interest when putting employees ahead of business objectives. Also, not many people are true servant leaders: Putting your needs last doesn’t come naturally.
The strategic leader has two jobs: One is to maintain current operations, which includes keeping employees satisfied; another is to seek out growth opportunities for the organization. In this approach, leaders motivate and align their team, instead of micromanaging, moving the company forward.
Strategic leadership promotes highly motivated and engaged employees.
It can be difficult to support employees while at the same time exploring opportunities and determining the best path for the business. This approach may be best for professional teams who work well with little supervision.
The bureaucratic leader is by-the-book. Bureaucratic leadership is all about the rules and regulations, past practices and procedures for this boss and their team members.
This method of management and leadership is good for highly complex organizations, such as health and safety, as well as for routine-oriented jobs. It allows an organization and its employees stability, even through change.
It can be a bad fit for a creative group because the focus on rules can limit innovation, creativity, and growth.
A situational leader is highly agile and can adapt their leadership style to whatever the circumstances demand. Known as the Hersey-Blanchard model, situational leadership relies on the leader’s decision-making skills, and they’ll adjust those depending on the people they’re working with and the abilities of those employees.
Leaders can change direction of leadership style quickly, which can increase employee effectiveness and satisfaction.
This leadership style puts enormous responsibility on one person. It may not work in cross-cultural situations and can possibly prioritize relationships over corporate vision.
A form of servant leadership, the coach-style leader nurtures and develops each team member’s strengths, much like the coach of a sports team. Every employee might have different abilities and skills to offer, but overall the team can use that mix to grow its productivity.
That focus on employees allows for their professional development and success. It also creates a collaborative spirit and high morale.
Coach-style leading is time-consuming. It can be ineffective for unmotivated employees and does not necessarily guarantee an increase in overall productivity or effectiveness.
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The Motley Fool has an ownership interest in InHerSight. Motley Fool CFO Ollen Douglass serves on the board of directors for InHerSight. InHerSight has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends PayPal Holdings. The Motley Fool has a disclosure policy.