What’s the Best Leadership Style for Your Business?

Effective leadership is at the core of any successful business. A good leader knows how to motivate his employees and listen to their needs. He also has the skills required for managerial activities. The best leaders will approach each new project thoughtfully, see the lighter side of things when times are tough, and help others reach their career goals.

From situational leadership to transactional leadership, there are various ways to run a business. An experienced manager or CEO should be able to choose the right approach for the situation. Studies indicate that successful business owners combine two or more leadership styles. The goals and culture of an organization determine which one works best.

Here are the most popular leadership styles and their unique characteristics:

Autocratic Leadership

Managers who adopt this leadership style make decisions on their own. They rarely consult their team members, which can be useful in emergency situations that require immediate action. However, autocratic leadership rarely works in a democratic organization.

Some leaders using this approach often maintain their authority by threats, intimidation, or force. Those with less experience may not be able to steer the organization in the right direction. This leadership style allows quick decision-making and provides a stable work environment, but it has its downsides.

Democratic Leadership

Democratic leaders encourage their team members to come up with ideas and contribute to the decision-making process. They put emphasis on initiative, creativity, and good relationships. Managers who embrace this leadership style take into account others’ opinions, helping people feel valued. However, not all of those ideas are discussed or incorporated in the business plan. The leader may lack a clear vision and have a hard time making decisions.

Managerial Leadership

Leaders who use this approach focus on the relationships with and among team members. In general, their goal is to strengthen the company’s in fracture and systems, and keep things running smoothly.

Staff members know exactly what they are expected to do, get involved in the decision-making process, and work with the manager to help identify appropriate solutions. The downside is that some managerial leaders may not have a clear purpose, and ignore the changing needs of the organization.

Transformational Leadership

This leadership style puts emphasis on the communication. Leaders motivate the staff members, and count on everyone giving their best. They encourage their teams to pursue innovation and implement changes.

According to experts, this approach can lead to greater productivity and enthusiasm among employees. Transformational leadership combines elements of visionary and charismatic leadership, inspiring employees to take action and make things happen. The leader serves as a role model and discusses his ideas with the staff.

Laissez-Faire

The laissez-faire leadership style works best when the team members are highly skilled and experienced. The manager allows his staff to make decisions and implement their own ideas. Most leaders using this approach fail to provide feedback to their employees, which may create chaos in the organization. This style of leadership requires no direct involvement or supervision efforts from managers. If team members lack experience or don’t manage their time well, they might not be able to accomplish their goals.

Visionary Leadership

Visionary leadership is typically used in organizations that need a new direction. The manager encourages his team to experiment, innovate, and take risks. He believes that failure does not impede progress. Emphasis should be put into both action and vision. This leadership style allows employees to reach their peak potential and make decisions on their own.

Transactional Leadership

Managers who embrace this approach provide rewards or punishments to staff members based on their results. They follow the rules and expect others to do the same. This leadership style focuses on performance, organization, and supervision, and works best in emergency situations.

A good transactional leader is expected to set clear goals, guide his team, and assess its performance on a regular basis. Employees with the highest productivity are awarded and praised for their work. The downside is that most leaders who use this approach focus too little on innovation.