5 Most effective leadership styles for business success

Leading a business toward success can be a major challenge. Leadership as a trait that every business owner and manager should possess, but can be quite fluid. The main reason is that the market environment is prone to sudden and common changes.

One leadership style cannot be applicable in every situation. That’s why leadership needs to be adaptive and able to adjust to the environment in which an organization is currently in. Being a leader is, therefore, more than just being the head of the company.

A leader is able to inspire everyone within the organization and encourage them to seek excellence. However, choosing a leadership style isn’t easy. You have to consider the people who work for you, the goals of your company and the way you want your company to grow, as well as reach success. With that in mind, here are a few of the most effective leadership styles for business success.

Democratic leadership style

This leadership style is commonly effective for most companies. As you may have guessed by now, this style is based on democracy when it comes to important decisions. As such, a leader has a final say in the matter but they will take other opinions, feedback and ideas into consideration before making the ultimate call.

In other words, the leader will make the decision based on the input of other team members. The main reason democratic leadership is so effective is that it allows the voice of employees to be heard.

As you may know, involving employees in the decision-making process motivates them and oftentimes unlocks their potential. If the feedback varies drastically, the leader may decide to take action or put a decision up for a vote if they’re unsure how to proceed.

Laissez-faire leadership style

This style may be a bit unorthodox but it’s proven to be quite effective. The French word “Laissez-Faire” plainly translates to “Let them do”, which means the leader will provide almost all of their authority to the employees.

In other words, you trust your employees to get the work done and give them the freedom to make their choices and form decisions as they see fit. This leadership style is common in young startup businesses, as well as in Agile software development, for example, where the development team ultimately decides how to build software.

Employees are free to do their work while company leaders focus on company growth and development. What’s more, this leadership style is excellent for empowering employees by giving them the authority. However, if not kept in check, this leadership style can easily go astray causing the company to miss out on important growth opportunities.

Pacesetting leadership style

If you’ve ever heard of the saying, “Lead by example,” this leadership style could match the criteria. Therefore, exactly what is pacesetting leadership style? This style is preferred by the leaders who lead from the front. Basically, they lead by example and set high standards for the rest of the team while expecting them to exceed expectations with minimal management involved.

Although effective, this leadership style isn’t suited for long-term scenarios and may cause burnout among employees. However, if a company needs to take a stand in the market and achieve a dominant position, this leadership style will get the results fast. But, for this leadership style to be as effective as it can be, it requires a few prerequisites.

For example, the leader must be skilled to lead from the front, the team needs to be highly-skilled and capable as well and the company culture must foster excellence and encourage employees to strive for improvement. Moreover, the leaders here are quite unrelenting and will constantly set high standards while focusing on getting rid of underperformers.

Autocratic leadership style

As you might imagine, autocratic leadership is the opposite of a democratic leadership style. In this style, the leader withholds all the authority and doesn’t consult anyone when it comes to making decisions.

Employees are, therefore, neither consulted nor regarded but they’re expected to adjust and adapt to the changes in the company nonetheless. Although effective in some cases, this leadership style is best avoided if possible.

The main reason is that, due to autocratic decisions, employees are the ones who are most commonly on the receiving end, which is why they oftentimes leave the company that practises this leadership style.

However, even though tough choices need to be made, this style might work out well in the short-term, of course.

Strategic leadership style

Strategic thinking is well sought-after in every company. Leaders that practise a strategic leadership style have both the company’s and everyone else’s best interests in mind. For example, while focusing on seizing every relevant growth opportunity for a company, strategic leaders also focus on maintaining the optimal working conditions and environment for their employees.

However, this leadership style is oftentimes risky as you can stretch on two sides only so far. In other words, you cannot please everyone and there’s a limit to the number of people you can support at any given time even though strategic thinking can support multiple employees at once.

Eventually, one side will have to either suffer the consequences or get ready for a compromise. Therefore, not everyone can get their way all the time because that isn’t the best course of action for the company.

Being a leader and choosing a leadership style can be daunting, indeed. However, the actual best practice is to try something different whenever an opportunity presents itself. Leaders must be flexible and they must never underestimate the situation if they want their companies to succeed.

Jacob Wilson is a business consultant and an organizational psychologist based in Brisbane, Australia. He is passionate about marketing, social networks and business in general. In his spare time, he writes a lot about new business strategies and digital marketing for Bizzmark blog.

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