9 common leadership styles: Which type of leader are you?

There is never a one-size-fits-all leadership style for every business – all companies operate differently and certain traits will be more successful in some environments than others.

However, having a thorough understanding of various leadership styles enables senior executives to not only adopt the correct characteristics for themselves, but also choose better managers throughout the organisation.

Here is a list of nine common leadership styles and a brief summary of their advantages and disadvantages.

Transformational leadership

Often considered among the most desirable employees, people who show transformational leadership typically inspire staff through effective communication and by creating an environment of intellectual stimulation.

However, these individuals are often blue-sky thinkers and may require more detail-oriented managers to successfully implement their strategic visions. For more information on transformational leadership traits, please click here.

Transactional leadership

Transactional leadership is focused on group organisation, establishing a clear chain of command and implementing a carrot-and-stick approach to management activities.

It is considered transactional because leaders offer an exchange; they reward good performances, while punishing bad practice. While this can be an effective way of completing short-term tasks, employees are unlikely to reach their full creative potential in such conditions.

Servant leadership

People who practice servant leadership prefer power-sharing models of authority, prioritising the needs of their team and encouraging collective decision-making.

Research by Catalyst has claimed this style, described as altruistic leadership by the company, can improve diversity and boost morale. However, detractors suggest servant leaders lack authority and suffer a conflict of interest by putting their employees ahead of business objectives.

Autocratic leadership

A more extreme version of transactional leadership, autocratic leaders have significant control over staff and rarely consider worker suggestions or share power.

Ruling with an iron fist is rarely appreciated by staff, which can lead to high turnover and absenteeism. There can also be a lack of creativity due to strategic direction coming from a single individual.

This leadership style is best suited to environments where jobs are fairly routine or require limited skills. It is also common in military organisations.

Laissez-faire leadership

More commonly used to describe economic environments, laissez-faire literally means “let them do” in French. This is typically translated to “let it be”. As such, laissez-faire leaders are characterised by their hands-off approach, allowing employees to get on with tasks as they see fit.

This can be effective in creative jobs or workplaces where employees are very experienced. However, it is important that leaders monitor performance and effectively communicate expectations to prevent work standards slipping.

Democratic leadership

Also known as participative leadership, this style – as the name suggests – means leaders often ask for input from team members before making a final decision.

Workers usually report higher levels of job satisfaction in these environments and the company can benefit from better creativity. On the downside, the democratic process is normally slower and may not function well in workplaces where quick decision-making is crucial.

Bureaucratic leadership

Bureaucratic leadership models are most often implemented in highly regulated or administrative environments, where adherence to the rules and a defined hierarchy are important.

These leaders ensure people follow the rules and carry out tasks by the book. Naturally, this works well in certain roles – such as health and safety – but can stifle innovation and creativity in more agile, fast-paced companies.

Charismatic leadership

There is a certain amount of overlap between charismatic and transformational leadership. Both styles rely heavily on the positive charm and personality of the leader in question.

However, charismatic leadership is usually considered less favourable, largely because the success of projects and initiatives is closely linked to the presence of the leader. While transformational leaders build confidence in a team that remains when they move on, the removal of a charismatic leader typically leaves a power vacuum.

Situational leadership

Developed by management experts Paul Hersey and Ken Blanchard in 1969, situational leadership is a theory that the best leaders utilise a range of different styles depending on the environment.

Factors such as worker seniority, the business process being performed and the complexity of relevant tasks all play an important role in what leadership style to adopt for any given situation. For example, situational leaders may adopt a democratic leadership style when discussing commercial direction with senior executives, but switch to a bureaucratic strategy when relaying new factory protocols to workers.

However, many people have a natural leadership style, which can make switching between roles challenging. It can also be difficult to gauge what style is most suitable for certain circumstances, holding up decision-making processes.

Keeping up with the times: Is your leadership modern enough?

Anyone who works in a business leadership capacity knows that the corporate landscape is forever in a state of flux, with change the only constant in an unpredictable environment. The implication of this, of course, is that leadership skills and attributes are evolving in tandem.

Never has the impact of continuous business change been as pronounced as it is today. With the relentless rise of technology, new markets and shifting consumer preferences, the only companies that survive are those that can keep up with the times.

Some of the leadership traits that were relevant only a few years ago are now considered outdated by many – and there is always a new batch of skills for the modern leader to learn. What are the key qualities that today’s managers need to master in order to stay ahead?

Be a tech guru

Technology has long been one of the biggest priorities for business leaders, and the latest indications are that this trend is only set to grow in the future.

Whether it’s to streamline internal processes or to enhance consumer-facing interactions, there is rarely a space within your organisation that can’t be improved through technology. In 2014, we looked at some of the top business technology trends, which highlighted, for instance, the increasingly mobile nature of commerce and what this means for businesses and consumers.

Already a vital area to invest in for companies, mobile will only grow in dominance. In this article, CNET analysed data from US Census Bureau and GSMA Intelligence to demonstrate that there are now more active mobile devices than human beings on Earth – and their growth rate also exceeds that of our population.

There are no two ways about it – technology is touching more and more aspects of our personal and business lives and your success as a leader is likely to hinge on how well you can leverage this change.

Think data, think big

In addition to mobile, one of the technology trends that is revolutionising business processes the most is big data.

Companies are now dealing with quantities of data that were once thought unimaginable. Correctly and efficiently tapping into this information to extract meaningful insights is, and will continue to be, of utmost importance for any business.

One of the areas in which companies are deriving the most value out of big data analysis is customer relationship management (CRM). The savviest businesses are using the latest software and tools to crunch customer data and enhance individual relationships with them. It’s no surprise, then, that research firm MarketsandMarkets predicts the global CRM market to grow at 36.5 per cent between 2013 and 2018, reaching a value of US$24.22 billion (AUD$27.8 billion).

In addition, technology research group Gartner announced that advanced analytics, fuelled by big data, will be “a top business priority”.

“Rather than being the domain of a few select groups (for example, marketing, risk), many more business functions now have a legitimate interest in this capability to help foster better decision making and improved business outcomes,” explained Alexander Linden, research director at Gartner.

Harness the power of people

Despite the growing attention being placed on technology, it is still crucial for the modern leader to appreciate the human aspect of their business.

Engaging your employees and showing you value them by offering advancement and development opportunities is an area of increasing focus. This is true regardless of the industry in which you operate, no matter how “techy” or not it is.

For example, a survey by recruitment firm Robert Half polled technology professionals and asked them what frustrates them most at work. The most common response, with nearly half (45 per cent) of votes, was the lack of opportunities for advancement.

An additional study by the same company surveyed a range of CFOs and employees on the factors that cause the best employees to leave an organisation. Both pools of respondents were remarkably similar in their answers, with the second most cited reason being “limited opportunities for advancement” (22 per cent for CFOs and 20 per cent for employees). The first-placed factor was salary and benefits.

In the context of a digital business environment, it is essential you do not neglect the potential of your people, and give them the opportunities to grow and flourish within your organisation.

Be a student

Don’t limit professional development to just your employees, however. The best leaders are those who seek opportunities to personally learn and develop for the benefit of their business, and in an increasingly networked world, executive coaching is a great option.

Business leaders can benefit immensely from an executive development program, working with someone in a coaching or mentoring capacity. Often, the best way to learn in business is working closely with someone who has ‘been there and done that’, and using them as a sounding board.

According to Grant Thornton’s International Business Report, 40 per cent of business leaders in the Asia-Pacific (excluding Japan) region said they have used a business coach – this was one of the highest proportions around the world. In order to keep up with the times, it may be worthwhile investing in a relationship with an erudite business mentor.

Look global

In an earlier blog post we looked at the importance of globalisation, especially with a focus on Asia – and the need to take a worldwide view to business is not likely to change.

Additionally, the October 2014 Technology Leaders Forecast Survey from DLA Piper found that two-thirds (67 per cent) of technology business leaders believe China will be “a source of major technology innovation in the next five to 10 years”. Given its proximity to the region, Australian businesses are well placed to tap into Asian markets, and the onus will be on business leaders to instigate this investment.

The business world is always changing – but by knowing which skills and qualities you need to master today, you can ensure you and your business are ahead of the curve.

6 reasons why introverts make excellent leaders

When imagining a successful leader, many people automatically envisage someone with a bold personality, charisma, and a knack for public speaking and commanding social situations. This bias has also existed in businesses for many years, with organisations typically looking to promote extroverts to leadership positions rather than staff who are prone to introversion.

A 2006 USA Today study revealed that 65 per cent of senior executives believed introversion to be a barrier to effective leadership. In fact, only 6 per cent said introverts make the best leaders.

However, the list of frequently cited introverts who have made successful leaders is long, including modern names such as Bill Gates and Warren Buffett, as well as historic faces like Gandhi and Abraham Lincoln.

Therefore, what traits make introverts powerful and motivational leaders? Particularly when they face the stereotype of being quiet, shy and reserved. To answer that question, here are six reasons why introverts could be the right choice for leadership positions at your organisation.

1. New perspective

If your business only promotes extroverts to leadership roles, it can be difficult to gain a different perspective on problems or issues. Introverts can bring new ideas and suggestions to the table that offer fresh direction.

A mixture of introverts and extroverts can optimise brainstorming sessions and other meetings by combining two sets of talents in a way that is mutually beneficial for the creative process.

2. Careful preparation

Introverts like to be prepared, especially for social situations where they may otherwise feel uncomfortable, such as presentations, business meetings, networking events or speeches.

Any additional time spent researching, practising and understanding goals and strategies often pays dividends. Extroverts, while often naturally charming, can be guilty of ‘winging it’. This could cost them opportunities if colleagues or potential customers feel they have more style than substance.

3. Calming influence

Bringing together a room full of extroverts can mean emotions occasionally spill over, which could result in heated arguments and process delays.

Introverts, on the other hand, are usually more reflective and less likely to be directly confrontational. This can help to calm passions and temper egos when meetings spiral out of control.

4. Better at leading proactive teams

Research published in the Harvard Business Review shows that introverts are often better leaders for naturally proactive employees.

This is because they tend to be more receptive to a team’s ideas, which motivates and galvanises staff who are already passionate about their job. However, in the same study, extroverts were found to be more effective at leading passive teams that needed more direction.

5. Keen sense of self

Introverts tend to be better at self-evaluation, meaning they are adept at identifying the positives and negatives in their performances and making adjustments to improve.

An extrovert’s extreme self-confidence could lead them to ignore or not notice flaws in their skills and abilities, or worse, lay the blame elsewhere.

6. One-on-one skills

Whereas extroverts are comfortable flitting between social contacts and talking to a number of different people, individually or in groups, introverts often prefer building strong one-on-one connections.

The advantage is that interpersonal relationships are deeper and often longer lasting. Suppliers, customers and colleagues also feel more appreciated and respected when you take the time to build these ties.

Different leadership styles from around the world

Businesses are operating in an increasingly global environment, which requires careful consideration of cultural differences when marketing goods and services worldwide.

This is particularly true for Australian organisations hoping to take advantage of growing opportunities in Asian markets, with the country ideally placed to strengthen trade relationships on the continent.

Whether you are dealing with international partners or setting up an office in an overseas location, understanding typical leadership styles in that country can be extremely beneficial to bolstering smooth-running relationships.

So what are the main leadership styles exhibited worldwide? British linguist Richard D Lewis explored the nuances between a number of countries in his 1996 book ‘When Cultures Collide‘, which is now in its third edition.

Here is a summary of some of the common characteristics outlined in the book.

Australia

Australian leaders are thought to be fairly democratic, with Mr Lewis pointing to Swedish egalitarianism models as a close comparison.

However, Australian organisations are also guided by the more aggressive American way of doing business, which favours quick thinking and fast decision-making.

According to Mr Lewis, Australian executives must be considered ‘one of the mates’, but once they have achieved this status they often exert important influence.

Research by the Australian Institute of Management has previously found that the country’s leaders are supportive, preferring coaching and mentoring rather than focusing on individual mistakes.

UK

Diplomatic, tactful and casual, British managers are often fair and willing to compromise.

Under the surface though, UK leaders have a pragmatic streak that ensures they can be resilient and ruthless, but in a subtler manner than is stereotypically seen in US counterparts.

Where British employees can falter is in international communications, with an adherence to tradition and inward-looking perspective that can prevent cross-cultural learning.

Japan

Japanese businesses are more likely to have a bottom-up approach to innovation and change, Mr Lewis claims.

Top executives may harness substantial power, but new ideas typically come from workers on the ground. These are then filtered up through middle management to senior executives and are put in place when they gain enough support.

This process involves the circulation of a document called a ringi-sho, which is annotated and amended by various departments as it makes its way up the leadership chain.

China

Like in Japan, Chinese leadership is often geared towards consensus decision-making, which Mr Lewis describes as the Confucian model. This means a leadership group is usually in charge of policy implementation.

However, unlike in truly democratic leadership styles, there is a respect for unequal relationships. Organisational structures are similar to families, with age and seniority being greatly revered.

A benevolent autocrat is considered the ideal boss, and subordinates expect to be given instructions.

The US

US leaders are often assertive, aggressive and goal orientated, which Mr Lewis says is a result of the country’s frontier beginnings shown since the 18th century.

“They are capable of teamwork and corporate spirit, but they value individual freedom above the welfare of the company, and their first interest is furthering their own career,” he stated.

Leadership positions are usually allocated based on merit and Americans are not shy about pursuing wealth as their main motivation.

India

Nepotism is a key feature of Indian leadership structures. Decision-making is often made between family members holding senior positions within the organisation.

Trade groups exert a significant influence in the country and strong inter-personal relationships can develop between these organisations.

Germany

German efficiency is commonly referred to when discussing businesses in the country – and while it may be a stereotype, there is truth to the notion.

Clear chains of command exist in each department, with information passing through the hierarchy in a top-down fashion. However, despite this autocratic approach, there is room for consensus in German leadership models.

Germans often gain the respect of subordinates by showing a willingness to work hard, obey the rules and play fair. Horizontal communication between department leaders is less common than in US and British firms.

France

France’s leadership models are among the most autocratic, although Mr Lewis says this may not be particularly evident at first glance.

CEOs often have skills across a wide range of areas, including marketing, production, accounting and personnel – shifting gears as and when required.

Due to this comprehensive coverage, management blunders are more accepted in French businesses, as leaders are responsible for a large number of decisions across many departments.

Netherlands

The Netherlands values merit-based appointments, so Dutch leaders can often point to many achievements and competencies.

While managers in the country are decisive, consensus is important and there are commonly a number of key individuals involved during new policy implementations.

Mr Lewis adds that ideas have free flow throughout Dutch organisations, suggesting bottom-up creativity is encouraged.

4 traits of transformational leaders

Transformational leadership is a style of management that many people wish to achieve and businesses often seek out candidates displaying this talent.

People exhibiting transformational leadership typically focus on revolutionary change within organisations based on a commitment to the company’s vision and strategy.

The late Bernard Bass, a professor emeritus in the School of Management at Binghamton University, highlighted four characteristics of transformational leaders.

This list of commonly cited abilities can help enterprises to identify individuals suitable for transformational leadership development opportunities.

1. Idealised influence

One of the key ways transformational leaders inspire change is to engender trust and loyalty among followers through charisma and positive behaviour.

Creating this sense of idealised influence in the workforce can be achieved in a number of ways, including leading by example, articulating a vision and explaining how to reach goals.

Having high ethical and moral values – and displaying them in dealings with staff – is also a characteristic of transformational leaders. Seen as role models, these individuals have the confidence of staff, who will typically respect their decisions and strategies.

2. Intellectual stimulation

Spurring innovation and effecting change requires staff to re-examine entrenched beliefs, notions and processes. Only then can radical new initiatives be introduced.

Transformational leaders create an environment of intellectual stimulation, where employees’ awareness of business issues is developed and encouraged.

Creativity is the key to success and staff are given guidance on how to optimise their problem-solving capabilities, including lateral-thinking exercises.

Managers tend to foster a climate where new ideas can be explored in a supportive, collaborative atmosphere, without fear of punishment or ridicule.

3. Individualised consideration

Transformational leaders have a tendency to prioritise an individualised view of the workforce. In other words, they treat each staff member as a separate person with their own skills, talents and motivations.

Taking this into account helps leaders to select roles for employees that are best suited to their capabilities, which enables staff to reach personal goals more easily.

Leaders can achieve this in a number of ways, including listening to personnel closely, praising positive performances, publicly recognising achievements and privately thanking staff for outstanding contributions. Some managers may also take on a coaching or mentoring role to help colleagues develop further.

4. Inspirational motivation

Keeping people inspired is often what gets the creative juices flowing, which is vital for transformational leaders looking to make large-scale changes to business operations.

Common motivational tactics include encouraging teamwork, articulating the company vision in a way that appeals to an employee’s own objectives and developing a shared goal that provides meaning to daily tasks.

Transformational leaders typically create an atmosphere where followers are inspired to become an intrinsic part of the brand’s culture and vision. They set high standards, which gives people tough – yet achievable – targets that boost productivity, while providing a sense of fulfilment.