How to Lead in the Business World?
There were many famous leaders on the face of globe like Mahatma Gandhi, Nelson Mandela, Adolf Hitler, Martin Luther King, Winston Churchill, Steve Jobs, Napoleon Bonaparte and many more. So there can be as many ways to lead people as there are leaders. Leadership always plays a vital role in business worlds and all business required skilled and well-groomed leaders to achieve business goals and objectives. Due to this need, psychologists and businesspeople have developed useful frameworks that describe the best leadership styles by which people leads.
When you will understand these different leadership styles, you can easily develop your own approach to leadership, and you will become a more effective leader as a result. In this article, I will tell you about some of the common approaches to leadership styles that are mostly used in business world. I'll also tell you about some specific styles as well as I will tell you about advantages and disadvantages of leadership styles.
Different Types of Leadership Styles
You can select any approach to leadership depending on your own preferences, your business needs, and the situation you are facing.
Lewin's Leadership Styles
In 1930s a well-known psychologist Kurt Lewin developed his leadership styles framework. This framework provided the foundation of many of the approaches that are developed afterwards. Following are the three major Kurt Lewin leadership styles:
- Autocratic Leadership. Autocratic leadership style is also known as authoritarian leadership. In this approach leaders make decisions without consulting with their team members. Such leaders do not take suggestions from team members even if their input would be useful. Simply Autocratic leaders make choices based on their own ideas, experience and judgments and rarely accept advice from team members. This approach is suitable for those situations when you need to make decisions quickly, when team agreement is not necessary for a successful outcome and when there is no need for team input. However, this leadership style can be demoralizing for an organization as well as it can lead to high levels of staff turnover and absenteeism.
- Democratic Leadership. Democratic leadership style is also known as participative leadership. In this style leaders make the final decisions, but they also include their business or project team members in the decision-making process. This style encourages creativity of team members, and they are often highly engaged in projects and decisions. Researchers have found that this leadership style is one of the most effective among leadership styles and this lead to higher productivity, better contributions and increased team morale. This also results in high job satisfaction and high productivity.
- Laissez-faire Leadership. Laissez-faire leadership is also known as delegated leadership style. These are the leaders who give their team members a lot of freedom in how they do their work, how they set goals and objectives, and how they set their deadlines. Leaders in this style provide support, resources and advice to group member if needed, except this they don't get involved. This autonomy may lead to high job satisfaction, but it usually decrease the productivity damaging if team members do not manage their time well, or if they lack the skills,, knowledge, or self motivation to do their work effectively. This style may also automatically take place when managers don't have control over their work and their team.
Lewin's leadership styles are popular and useful, because it encourages leaders/managers to be less autocratic than they might instinctively be.
Blake and Mouton Managerial Grid
This was first published in 1964, the Blake and Mouton Managerial Grid focuses on the best leadership style to use, this grid give importance to people and also greatly concern with production/tasks.
The main features of Blake Mouton Managerial Grid are:
- People-oriented style
- Supporting & encouraging
- Participative approach
- Highly task-oriented
This people-oriented leadership style focus on organizing, motivating, and developing team members. This participatory leadership style encourages good teamwork and provides a platform for creative collaboration.
As this is a task-oriented leadership style so it focuses on achieving tasks. People who follow this leadership style define the task and the roles required, put structures in place via assigning responsibilities, then organize, and monitor work.
This managerial grid model focuses on both, a high concern for team members and a high concern for the task so this is an important idea.
Hersey-Blanchard Situational Leadership Theory
This well-known Hersey Blanchard Situational Leadership Theory was first published in 1969, this theory argues that an organization or a leader need to use different types of leadership styles depending on the maturity of project team or team members. For example immature team members need a more directing approach, while members with higher maturity and capability need a participative or delegating styles of leadership. This theory can be used in different business situations.
Path-Goal Leadership Theory was published in 1971 and this theory focuses on that leader should think about what your team members want and need.
Path goal theory of leadership example, highly-capable team or project members, who are assigned to a complex task or typical responsibilities, will definitely need a different leadership approach as compared to people with low capability. Highly capable team will want a participative approach, while the low capable team needs to be told what to do.
With Path-Goal leadership Theory, management of an organization can chose a best leadership style based on their particular requirements of team members, the task that they're doing, and the environment in which they will work.
Six Emotional Leadership Styles
In 2002, Daniel Goleman, Richard Boyatzis and Annie McKee described their Six Emotional Leadership Styles theory in their book Primal Leadership. This theory tells in details about the strengths and weaknesses of six leadership styles that management or leader can use. Theory also shows how each leadership style can affect the emotions of team members. The six leadership styles are as under:
- Pacesetting and
Transformational Leadership Style
Transformational leadership theory was first published in 1978, and after that it was further developed in 1985. Transformational leadership style frameworks are all useful in different situations. In organizational or business environment "transformational leadership" is often the most effective leadership style to use and many organizations consider this as the best leadership style.
Transformational leaders are those leaders who have integrity and high emotional intelligence. In this best leadership style leaders motivate their team with a shared vision of the future, and they also communicate well. Transformational leaders are also typically self-aware, empathetic, authentic and humble.
Transformational leaders motivate and regularly inspire their team members because they expect the best from everyone, and they hold themselves responsible for their actions. They set clear goals and objectives and then communicate them to team as well as they have good conflict-resolution skills. This leadership finally leads to high productivity and engagement.
Below I am sharing some other leadership styles although these are interesting, but do not fit with any of the frameworks I mentioned above.
Bureaucratic Leadership Style
Bureaucratic leaders remain stick to the purpose or objective and follow rules strictly. They ensure that their team members follow procedures precisely. This leadership style is most suited for those work which involving serious safety risks like working with heavy machinery, with toxic elements or substances, or with large sums of money. Bureaucratic leadership style is also helpful for managing those employees who perform routine tasks.
Bureaucratic leadership style is less effective for those organizations that rely on flexibility, creativity, or innovation.
Charismatic Leadership Style
A charismatic leadership style is almost resembles with transformational leadership. In both thee styles leaders inspire and motivate their team members.
The main difference between these two leadership styles lies in their intent. Transformational leaders actually want to transform their team members and organizations, while charismatic leaders rely on themselves and their own ambitions, so they usually not want to change anything.
Charismatic leaders believe in themselves and they think that they can do no wrong. This feeling of invincibility can severely damage a project team or a company, as this already happened in the 2008 financial crisis.
Transactional Leadership Style
This leadership style states that “project team members should agree to obey their leader when they accept a job or task”. The "transaction" actually refers to the organizational pay for team members in return for their effort on a short-term task. Transactional leaders have a right to "punish" any team members if his/her work doesn't meet an appropriate or described standard.
Transactional leadership is present in many organizations, and it does offer some benefits. For instance, it clarifies the roles and responsibilities of each and every team member.
The drawback of transactional leadership style is that, on its own, it can be chilling and unethical, and this style can lead to high staff turnover. This style of leadership also has serious limitations for creative or knowledge-based work so team members cannot improve their job satisfaction.
Pulling it all together I will say that in business, transformational leadership is often considered the best leadership style to use. However, no one style of leadership fits all business situations, so it's useful to understand different leadership frameworks and select best type of leadership style which meets your requirements best.