Effective Leadership Styles in Business

Being an effective leader is one essential part of running a successful business. But there isn’t just one right way to be a great leader. You can choose and develop a leadership style that works for you, your team, and your business goals. Below are some established effective leadership styles and tips to help you form your own leadership style. 

Leadership Styles in Business 

Good leadership in business isn’t always easy. But it’s an important part of a company’s success. Here’s a look at some of the most common, and effective, leadership styles in business today. 

Transformational Leadership 

One type of effective leadership style is transformational leadership. Transformational leaders work with the goal of transforming their teams and organizations so that they’re constantly improving. They create a vision of the future that they share with their teams so that everyone can work together toward that shared goal and vision. Transformational leaders are also often seen as authentic, self-aware and empathetic. In addition, they handle conflict among team members well and hold both themselves and their team members accountable. 

Democratic Leadership 

Democratic leaders include their team members in their decision-making process. While they are ultimately responsible for making final decisions, they often ask team members what they think and try to take their thoughts and opinions into account. This can help increase engagement among team members, but it may not always be the best style for leaders who need to make quick decisions. 

Autocratic Leadership 

On the other end of the effective leadership styles spectrum, autocratic leaders make all decisions on their own without consulting with team members. This can be a good system for making quick decisions. However, it can make team members feel out of touch or dissatisfied with their working environment if they don’t feel like their opinions or ideas are ever considered in those important decisions. 

Laissez-Faire Leadership 

Leaders who practice this style are known for giving their team members a lot of freedom. They provide support and resources for team members when it’s necessary, but they don’t constantly micromanage employees. This can be an effective leadership style if you have a lot of trust among your team members and you know that they do good work and manage their time well on their own. However, if you’re working with newer team members or those who need more guidance or time-management help, it may not be as effective. 

Bureaucratic Leadership 

Bureaucratic leaders are all about rules. They may set strict procedures that they follow precisely, and they expect their team to do the same. This usually isn’t the best leadership style for businesses or teams that rely on innovation or creative problem-solving. In those instances, you may want people to have a little more freedom to think outside the box and not follow the exact same procedures from day to day. But for more routine-oriented jobs, this leadership style could be a good fit. In those situations, many workers could appreciate having a very cut and dry set of rules and procedures to follow so that they aren’t left guessing about what you expect from them. 

Transactional Leadership 

Transactional leadership focuses on the idea that accepting a job is a sort of transaction. By agreeing to take a job, workers have accepted that they have to complete the outlined task and follow their leader’s instructions. This style can work in situations where you need to clearly outline a difficult job or task before choosing someone to take on the role. It may also help ensure that everyone is very clear about what is expected of them. However, it can seem cold or inflexible, which may lead to low job satisfaction. 

 Good leadership in business isn’t always easy. But it’s an important part of a company’s success.

Finding Effective Leadership Styles That May Work for You 

To decide which one of the effective leadership styles may be right for you, you may want to consider a few different factors. 

First, which style is the best fit for your business and its mission? If you rely on your workers to be creative and come up with unique solutions, you probably don’t want to go with a bureaucratic style that strictly outlines the procedures everyone needs to follow. But a laissez-faire style might actually work well for that situation if your team members come up with great ideas when given the freedom to do so. 

You may also want to consider your own style and goals and those of your team members. If you know that your team members work well when they’re given very specific instruction, but not so well when left up to their own devices, then you might not want to go the route of laissez-faire leadership. And if you know that you have strong instincts and opinions about how every decision should be made, then you probably don’t want to go with a democratic leadership model. 

It’s also possible to make each leadership style your own by infusing your values and personality. So if, for example, you choose to lead in a fairly autocratic style because the nature of your business means you have to make a lot of quick decisions, you can still be open and honest with your team members about your decisions and how you make them. This may make them feel more engaged and give you more insights about what factors you might want to consider for future decisions. There isn’t one style that works perfectly in every situation. But if you come up with a style that’s suited to your business and your team, you could be well on your way to leading a successful team. 

A version of this article was originally published on May 18, 2016.

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