Which Leadership Style Is The Most Effective For Business?

If you want to run a successful business, then Leadership quality is one of the most crucial factors that affect your business’ growth and its success rate.

There are many leadership styles and qualities that you can learn and acquire to grow your business rapidly.

You have to choose a leadership style that best suits you, your business, and your employees.

Your leadership style will determine whether the work culture of your business is bad, good, or great. If you want to become a great leader for your business in the upcoming time, then you must know where you stand today and what are the key qualities are lacking in your leadership style.

Today in this article we will explain to you some of the key leadership styles which will be very much effective to your business. Read the article till the end, this will make sure that you get proper knowledge about leadership styles and can select the best leadership style for your business.

Leadership Styles Which Are Effective For Your Business

Types Of Leadership Styles

There are many leadership styles that can be effective to run a business successfully. Let us have a look at some of the best leadership styles which will help you to grow your business and also increase the success rate of your business

Autocratic Leadership

The autocratic leadership style is one of the effective leadership styles for your business. In Autocratic Leadership, you will take each and every decision without consulting or without taking any suggestions from your team and employees who report to you. Some people struggle to differentiate this from micromanagement but they are different.

In this type of leadership style, the team and employees have to adhere to the decisions made by the leader and also have to cope up with the pace and time stipulated by the leader.

For example, when a leader or manager of a business changes the work hours of the employees without taking any opinions and reports from those employees. This type of leadership style is called Autocratic Leadership. 

In this leadership style, the leader takes less input from his team and employees and thus the decision-making occurs quickly.

This leadership style will also reduce stress from the team and employees, as they don’t get involved in any decision making and the leader makes decisions on his/her own.

Autocratic Leadership sometimes creates a lot of stress on the leaders, as the decision-making completely depends on them. This leadership style may also lead to low employee satisfaction and it can cause high staff turnover which can also affect the stability of your business. 

Democratic Leadership

Democratic leadership style is another effective leadership style for your business.

In Democratic leadership, the leader will take each and every decision by consulting and taking suggestions from the team and employees who report to the leader. The team and the employees will present their ideas and opinions and then the leader will make the final decision.

In this type of leadership style, the lower-level employees would be able to exercise authority that they will use for their position in the business. This will reflect how decisions are made in company board meetings.

Let us take an example, In a meeting, the leader will give a set of options to the employees for making a decision. The employees would discuss the options and then present their ideas regarding the option that best suits them or the leader can organize a vote to select any option and thus the leader will make the final decision keeping in mind the opinions of the team and employees.

In this type of leadership style, the employees will feel motivated to participate in any decision-making. This leadership style will provide a large perspective to the leaders and will also provide satisfaction to the employees. Such decision-making is a bit time-consuming as the leaders have to collect opinions from each employee.

Laissez-Faire Leadership

Laissez-Faire is a french term that means “Let them do”. In this leadership style, the leaders afford nearly all authority to their employees.

In this leadership style, the leader has complete trust in the employees and will allow the employees to work however they like. This might lead to a company’s downfall and can also limit its development. Laissez-Faire Leadership is mainly meant for highly experienced and well-trained team members.

This leadership style will create a relaxed work environment and will increase creativity in the workplace. This leadership style is not meant for those who need guidance and hands-on support.

Transformational Leadership

This type of leadership style transforms and improves based on the conventions of the company.

In this leadership style, the employees set a basic work goal and task that they have to complete within a month or week but the leader will push their employees to work more and pull out the employees from their comfort zone.

The goals and the time period for its completion might seem simple at first but the leaders will increase the goals and workloads according to the needs of the company or business.

This is one of the best leadership styles as it encourages the employees to come out of their comfort zone and see what they are capable of.

This type of leadership is mostly used in growth-minded companies. In this leadership style, the leaders might lose the individual learning curves of their employees, if they don’t receive the right coaching in order to guide them through new responsibilities.

Strategic Leadership

In this type of leadership style, the leaders mainly focus on the company’s main operations and its growth opportunities.

The leader makes sure that the present working condition of the business remains stable for the employees and also accepts the burden of executive interests.

This type of leadership is adopted in most companies as its thinking involves multiple types of employees at once.

Transactional Leadership

This is the most common leadership style in the present time.

In this leadership style, the leaders reward the team and the employees precisely for the work that they have done. The leader will provide an incentive plan to encourage the employees to quickly master their regular job duties.

Transactional Leadership will establish roles and responsibilities but it might also encourage bare-minimum work. This leadership style lacks emotional connection and thus it might lead to low job satisfaction for the employees. 

For example, if you work in a marketing company under a transactional leader, the leader might give you a bonus for sending 10 marketing emails.

Thus the leaders can use bonuses, incentives, and other rewards to encourage the employees to quickly achieve particular goals in a limited amount of time for the company.

Bureaucratic Leadership

This type of leadership goes by the books. Unlike autocratic leadership, this type of leadership takes opinions and ideas from the employees.

The leaders can also disagree and reject the ideas of the employees if those ideas conflict with the policies of the company.

If an employee gives any new and untraditional ideas, then the Bureaucratic leader may reject their ideas because the company is flourishing with the present ideas, and undertaking untraditional ideas may create a loss for the company.

This leadership style does not encourage innovative ideas and the employees don’t get full freedom to work. This leadership style best suits routine-oriented jobs. In this leadership style, the employees have a very cut and dry set of rules and procedures which they have to follow. 

Coach Style Leadership

In this leadership style, the leaders try to identify the strengths of each employee and then train and nurture them to encourage the team to work together according to their strengths.

This leadership style is a bit similar to strategic and democratic leadership and this leadership mainly focuses on the individual growth of the employees.

The leaders try to build a team of individuals with different skills and strengths which will greatly increase the success rate of the company.

The leaders also encourage the employees to learn new skill sets and guide them to gain expertise in other skills. 

This leadership style increases one on one relationships. This leadership style is time-consuming as it takes a lot of time to nurture every individual in the team thus this leadership style doesn’t suit a fast-paced work environment.

Visionary Leadership

In this leadership style, the leaders try to unite his/her employees to work as a team to achieve a common goal.

The leaders encourage the employees to achieve the goals in their own way. This leadership style increases the bond among the employees.

This leadership style is most successful for fast-growing, smaller organizations. The team always remains motivated and it fosters creativity for employees

Which Leadership Style Is Most Effective For Your Business?

In order to decide which leadership style best suits your business, you have to keep some factors in mind 

  • First of all if you want your workers to bring innovative ideas and come up with unique solutions, then you shouldn’t choose Bureaucratic Leadership
  • You should know how to invest in company’s free money.
  • You can use Laissez-Faire Leadership to encourage the innovative ideas and unique solutions of your employees.
  • You can also work with your own ideas. If you see that your employees are working great under your instructions but their performance is poor when they use their innovative ideas, then you shouldn’t choose Laissez-Faire Leadership.
  • If you want to take all the decisions on your own and you fully trust your instincts and your own opinion,then you shouldn’t choose Democratic Leadership.
  • For executing an effective business plan, an efficient leader set goals and analyse all the data regarding work plan prior to starting up the business.
  • If you want to make quick decisions as well as you want to involve your employees in your decisions,then you can use a fairly Autocratic Leadership style.
  • There is no ideal leadership style which will be the best effective for your business but you have to come up with a style to lead your business to success.

We hope that now you can choose the best leadership style that will be most effective for your business easily by yourself.

Call Now