Effective leaders have a style or a combination of multiple styles
that make them successful in guiding and inspiring employees.
Successful leaders are capable of driving creativity and productivity,
while also improving the bottom line of a business. Being an effective
leader does not always correlate with being a well-liked person, however.
Some leaders are loved by their employees, while others are not highly
regarded on a personal level, but remain great at moving the business in
a positive direction through distinctive leadership styles. Many leaders
are ineffective, and use leadership styles that do not correlate well
with their industry or with the people they are attempting to lead.

Leadership styles often correlate closely with personality type. Influence
from previous mentors will also influence a person's ability and style to
guide and direct a group of individuals. Leadership is not limited to
extraverted individuals, who have out-sized personalities, even though that
type of individual often rises to leadership roles, because individuals with
out-sized personalities are often effective communicators. Some leaders have
their own style that does not fit well into a specific personality type.
Labeling leadership styles is a general practice, but each leader will have
a more in-depth, detailed orientation in the the leader's approach to managing,
inspiring and driving results within his organization.

What Are the Traits of an Effective Leader?

Leadership is defined by the results achieved under the specific person in charge.
The leader is tasked with the challenge of gathering and molding individuals into
cohesive groups that are capable of achieving a common goal. They bring out the
best in individuals and of the group collectively, while also driving a higher
level of performance than usually would be achieved. Effective leaders drive
innovation, and they encourage their people to think strategically and creatively,
while also reaching for new limits. In the world of business, an effective leader
drives higher profits, and ultimately, increases the value and bottom line of the
business as a whole.

That said, not all leaders are effective. A CEO, boss or an individual who's tasked
with leadership is capable of failing, even when possessing only one of the above
leadership qualities. This can be a situation in which circumstance and bad luck
inhibits performance. A market crash or another element outside of the leader's
control can stifle results. The leader can fail, because he is unqualified or
because he does a poor job of selecting and motivating those around him to meet
their goals. The methods used to meet these goals vary significantly.

Autocratic Leadership

This aggressive leadership style is based on control. The autocrat is rarely well-liked,
and an autocratic leader uses a militant-like style. The autocrat gives orders and
expects prompt execution, with little-to-no feedback or input from the worker. This
leadership style can work in a production-type environment that demands maximal output
in simple, repetitive job roles. It rarely allows for an environment in which creativity
will flourish. The autocrat pushes employees hard; often, he does not get loyalty and
long-term commitments in return. High turnover and low satisfaction is expected, in
response to this leadership style. There are times when autocratic leadership is effective,
however. The military is a prime example. Each individual is encouraged to perform under a
strict, autocratic leader, because their job roles have life or death consequences.
Performing well in the military under this leadership style also warrants promotions to
higher ranking positions.

Laissez-Faire Leadership

The complete opposite of autocratic leadership is Laissez-Faire, which is understood to mean
and for do as you will or choose in French. What it means in economic terms is that it is "a
doctrine opposing governmental interference in economic affairs beyond the minimum necessary
for the maintenance of peace and property rights," according to Merriam Webster. The style
has some major benefits in creative environments, but it also lacks discipline and structure
that is often required in a business environment. Another downside of the Laissez-Faire style
is the unstructured approach to learning. It relies heavily on talent, existing experience and
creativity to drive results. If hard deadlines, production and bottom-line profits are not
necessarily a major factor, Laissez-Faire is a laid back, easy approach to running a shop. It
also can work when the employee already has a motive to put in the effort. For example, a
commission-based sales role is structured to reward performance. Using a Laissez-Faire leadership
style, makes it possible for the employee to find creative means of accomplishing a higher sales
rate. A more controlling leadership style that uses proven processes is typical in a sale role,
but increasing the freedom to explore creative strategies drives innovation and may yield major

Transformative Leadership

When comparing types of leadership that do really well in the business world, Transformative
Leadership really shines, as an all-around effective approach. It encourages employees to
think critically and the leaders is often inspiring. These leaders have a big vision, and
they are charismatic and motivating. The big picture approach, however, does not cover the
day-to-day details. A Transformative leader will require dedicated managers that have a more
detailed approach, to ensure that administrative tasks and daily processes are in place. The
Transformative leader is common in big business, where the CEO is a visionary with a large
audience that's receptive to innovative thinking. The technology industry is attractive for
these personalities, but they exist across the business spectrum.

Hands-On, Participant Leadership Style

The participant leadership style is collaborative, and takes employee opinion and input into
account during the decision-making process. This brings all of the best ideas to the table
and puts the leader in a co-worker type of role that's often respected by the employees.
While the participant style is a very effective leadership approach, it does not happen
quickly. Sometimes, a nimble, decision-making process is required to move forward. The
participant process gets bogged down, while everyone delivers input, and the process of
compromise and deliberation takes place. Ultimately, the decision is likely thorough and
well-considered, but not necessarily timely. If split-second decisions are not critical,
this leadership style works well in the business world. It may not work for a stockbroker
buying and selling on the stock exchange floor, but it serves many business models well.

Transactional Leadership

This is a straightforward leadership style with a focus on work, reward and processes that
drive consistent results. While Transactional leaders tends to lack the hype and charisma
found in Transformative leadership, they are very much results-oriented, which is great for
business. The style is not harsh, as an autocratic leadership type is, but it does punish
poor performance. On the flip side, a transactional leader provides incentive for positive
performance. In many cases, better performance means more money through bonus and commission
structures. Financial incentive is enough to motivate many employees into productive work
habits. In addition to utilizing a rewards system, the Transactional leader is focused on
proven processes that produce consistent results. For example, a transactional leader in a
sales call center will use strict call scripts and will reward employees who learn and follow
the scripts to drive sales.

Other Leadership Styles in Management

Many more leadership styles exist, and a really effective leader is adaptable and capable
of executing multiple styles in a manner that best fits their current situation. One common
leadership style is the charismatic leader. This person is similar to the Transformative
leader in the way they inspire, have a big picture vision and motivate people. It's a big
personality role, but not a detail-oriented style.

Another is the Bureaucratic leader, who's subject to strict guidelines and regulations. This
is one of the more difficult types of leadership styles, because the individual must motivate
and drive results under a strict set of regulations. They are severely limited in their ability
to perform in an inspiring or creative manner. In a Bureaucratic environment, transactional
rewards are non-existent, outside of promotion possibilities. Punishments from a Transactional
or Autocratic leader style are more difficult to apply, because employees typically have layers
of protection through unions and other legal rights organizations. The punishment style of
leadership is rarely effective and is questionably unethical, anyway, so this is not necessarily
a bad thing.

A Situational Leader is rare, and can change the entire course of a company, through his unique
leadership skill set. This skill set comes naturally to some leaders, but requires years of
practice for others. The situational leader can pull from an arsenal of styles to achieve a
desired result. If workers are slacking off, showing up late or not producing, the situational
leader can add a temporary level of autocratic style to show that he will not tolerate poor
behavior. The same leader can use a participant style to encourage collaboration and
problem-solving by including the employees. If a split-second decision is required, the leader
will skip the participant process and make a decision, based on his existing knowledge and
instincts. When productivity is slowed and the business would benefit from a boost, she can
switch to a transactional role and provide performance incentives. Lastly, the Situational
leader will communicate a larger vision to her employees while inspiring them to reach new
heights and goals. A Situational leader use other roles to manage daily tasks, keep everyone
on point and work through the details, but she will keep that big vision and inspiring motive
top of mind.

Finding Your Leadership Style

Leadership positions do not come easily. Finding your way into a leadership job role in business
usually requires years of hard work while learning and climbing the ladder. Starting a business
is another route into leadership, and it immediately springs you into the top role. That's not
always a good thing, as you will still need to work hard and learn some hard lessons. Finding
your groove as a leader requires failing, on occasion. Learning from those failures and using
that experience to become a better leader will ultimately stand to benefit the business. A few
people are natural leaders out of the gate, and will take the reigns seamlessly. Most people must
work hard and really focus on growth and experience, while experimenting and testing styles, until
they start seeing results on the job.

Great leaders often hold dear the best interests of their employees. The leader wants others to
reach their highest potential, and as a result, they challenge and elevate everyone. Great
leaders are genuinely interested in positive results and in the betterment of everyone around
them. A leader with expertise in her field is more natural when speaking to her employees when
she has a deep grasp on the business, product or service offering. Employees will respect a
leader who can empathize with and appreciate her employees' work in the field. Specialty
experience is not always necessary, however. Understanding the raw functions of a business and
being able to see the strengths and weaknesses in the business model itself can create a strong
leader. Communicating these strengths and weaknesses to key staff members, and utilizing their
skill sets to improve the model, is a function of a very results-driven leader.

5 Different Types of Leadership Styles


Types of Management
Leadership Styles


Six Leadership Styles

How Do Different Management
Styles Impact Teamwork?


The 10 Effective
Qualities of a Team Leader



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