7 Common Business Leadership Styles

June 18, 2024

Have you had this situation in your organization? A highly skilled professional is promoted to a management or administrative level and begins to struggle with execution and deliverables. Responsible for a team as well as their own work, they stop operating like a sports car and stall out like a horse-pulled wagon in the mud.

It’s very common. Many technical professionals and entrepreneurs will reach a point when their leadership style will be just as crucial for success as their knowledge. Few are well prepared for the mental and physical shift.

For firms to grow, leaders must rely on others to be well trained and responsible…to take ownership in their work and deliver it successfully. However, your team is only as good as its leadership when achieving a comprehensive business goal or vision.

In this article are seven common leadership styles to help new or experienced leaders improve their skills and agility. Approach management with more confidence in your natural style.

Democratic Leadership

You may be naturally inclined to seek feedback from the team when making decisions. You enjoy collaboration. You encourage others to have a voice and take ownership of projects.

Democratic leadership style is effective when mentoring or encouraging creativity and consensus on a team. It often leads to high job satisfaction and engagement.

When to switch styles: If this is your natural leadership style, you may need to practice a more authoritative or autocratic leadership style when decisions need to be made swiftly or if your team lacks experience and knowledge in certain areas.

Authoritative Leadership

You are a natural authoritative leader if you like to help people connect their work to a higher sense of purpose or mission.

Authoritative leaders understand the primary goals of the firm and help their team see the value of those goals. Then they link each person’s work to the goal, leading to a sense of purpose and inspiration.

When to switch styles: By combining authoritative leadership style and autocratic leadership style, leaders inspire while also making unilateral decisions to benefit the group. However, if team members need training or require feedback to move forward, these two styles are not enough.

Autocratic Leadership

You are a natural Autocratic leader if you are comfortable making quick decisions in crisis situations and directing groups to handle specific tasks with your oversight.

This style is great for organizations that do not require team input or agreement on a course of action and where training is clear and structured. Autocratic leaders are masters of their domain, and the team knows that their word is final without much input. Think of military boot camp or a call center.

When to switch styles: This style is not ideal for organizations that require autonomous and creative adaptation over time, including accounting and advisory firms. Leaders who enjoy autocratic leadership style will need to consider a Coaching style or Servant Leadership style to support team engagement and continued improvement.

Coaching Leadership

If the coaching leadership style is natural to you, it means that you like to focus on the growth of each individual. It is satisfying to watch individuals grow in skills and confidence within the organization.

This leadership style is important for organizations that rely on the advancement of individuals to take on more challenging roles and responsibilities through their career. Individuals also appreciate the feedback and mentoring that the coaching leadership style provides, which supports retention and job satisfaction.

When to switch styles: This leadership style only works once individuals have trust in your leadership and feedback. It can be used in one-on-one training and performance reviews, but it does not work if the individual is resistant to change. In some cases, the Pacesetter or Transformational Leadership style must be employed here.

Servant Leadership

A leadership style similar to the Coaching Leadership style is Servant Leadership. The servant leader seeks agreement while leading by example, setting a standard of ethics and care for the organization. You are natural in servant leadership if you believe that your work and attitude speak louder than your words.

While servant leadership can support positive and inspiring work cultures, it can be challenging when the organization includes more autocratic or pacesetter leaders.

When to switch styles: Sometimes servant leaders need to communicate the ‘why’ of their approach and demonstrate their authority and expertise through speaking, training and proactive consulting. When they engage in the Pacesetter or Transformational style, they fuel excitement by those who seek personalized, ambitious goals.

Pacesetter Leadership

Natural pacesetters establish a high bar for themselves, and they expect a lot from their team to reach heights they didn’t believe possible. You naturally use the Pacesetter Leadership style if you enjoy contests, challenging business goals or complex client issues.

Focusing on productivity and results motivates some team members to leave their comfort zone and stretch their skills. They enjoy the pursuit and the achievement. Pacesetter leaders will set milestones, measure progress and cheer on the team for new successes.

When to switch styles: If the organization is constantly on deadline and facing backlash for missed milestones, soften the Pacesetter style with the Coaching and Servant Leader styles. Show that you are in the fight together. Offer coaching to inspire and show the team why their work serves them as well as the organization.

Transformational Leadership

A natural transformational leader will believe in pushing boundaries of organizations and people. If you believe that expanding attitudes and capabilities is good for the individual as well as the organization, you may lean toward the Transformational Leadership style.

This style is associated with high-growth organizations. These leaders seek innovation and want to maximize potential as well as output. Tasks grow in difficulty as team members master new skills. Transformational leaders keep the vision in front of everyone and check in on individual and organizational progress with measurable benchmarks.

When to switch styles: This leadership style is the most adaptive because it incorporates many other leadership styles to achieve stated goals. Inspiring, seeking consensus, coaching and setting the pace are indicative leadership traits of high-growth organizations that are driving results. The Transformational Leadership style is often the hardest to maintain, as the transformative leader is personally driven while also engaging each individual. A singular vision for the good of the team and the world makes it sustainable, which sounds a lot like the Servant Leadership style, too!

What’s Next in Leadership?

Psychologist and emotional intelligence expert Daniel Goleman set a framework for leadership styles through his research in the ‘80s and ‘90s. Other leadership researchers such as Robert Greenleaf, Karl Lewis, Gloria Feldt, Bruce Avolio, Sally Helgeson, Bernard Bass, Danielle King and others have expanded and evolved other leadership styles.

There isn’t a one-size-fits-all, these leaders say. The best approach is to find your natural style and then adopt one or two others that complement your team and the organizational culture. An adaptive leader who supports and stands up for the team is a trusted and effective leader.

Also read: Tips for Navigating a Financial Crisis