A Guide to Leadership Styles in Business

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After many years of running your own business, you may find your leadership style changing and evolving with your company. Your leadership style should, of course, be unique to you, but there are some techniques that will help you become the kind of boss that employees look up to and respect.

Common Leadership Styles

Leadership styles in business can often be broken down into four main types. It’s worth pointing out here that you shouldn’t try to fit neatly into one of these boxes, but it is worth understanding each leadership style to give you a framework and understanding.

Autocratic Leadership

An autocratic leader is someone who considers themselves solely responsible for decision-making. Many business owners adopt this style particularly in their early years of leadership. They do not accept advice from others and base decisions solely on their own judgement and opinion. This leadership can seem harsh and has many negative connotations. Donald Trump (pre-presidency) was considered an autocratic leader, much preferring to have the weight of Trump Towers resting on his shoulders than delegate any decision making. However, you do not need to employ every aspect of this. Bill Gates was seen to have employed this leadership style when he was CEO at Microsoft to maintain a speedy decision-making process which often left competitors in the dust.

Laissez-Faire Leadership

Laissez-faire (French for “allow to do”) leadership is often seen as a lackadaisical leadership style and can sometimes become incohesive if not accompanied with the right structure. However, often as a business grows, it can become difficult to run it effectively with only one decision-maker. For example, if you have multiple management teams consisting of specialists within their field and more qualified team members in their specialism than you are, then it makes sense that they should be able to make decisions for their sector. Steve Jobs was considered a laissez-faire leader. He was a visionary but lacked the skills to “make it happen”, so he simply employed people that were brilliant at what they did and trusted them to make his visions a reality. But you have to employ great people, poor people left to their own devices can lead to disaster!

Participative Leadership

Also known as democratic leadership, participative leadership is one that involves all members of the organisation in its decision-making process. All members are encouraged to participate, there is a feeling of importance and belonging, which leads to a harmonious company culture. However having a say slows decision making and if taken to extremes participative leadership  can lead to paralysis  and missed opportunities.

Transformational Leadership

Transformational leadership is a leadership style that is becoming more and more common. A transformational leader will recognise talents and encourage employees to develop outside of their comfort zone. Transformational leaders tend to be creative and innovative, always looking for ways to inspire and motivate employees. They believe that the key to their business’s success is in the people that work there.

Your Own Leadership Approach

Being the boss can be overwhelming for many people because they don’t enjoy the responsibility of employees, or they struggle to relinquish control and prefer to go it alone.

Most business owners were initially trained in a specific trade or profession, such as an electrician, a bricklayer, an engineer, a hairdresser or an accountant. Most people are not trained to lead but are expected to lead in order to progress within a company or to grow their own businesses. If you’re struggling to see where your leadership style fits in, try taking this quiz!

Not all of the aforementioned leadership styles will suit all business models, so it is important to find the style that resonates most with you and adapt it to fit. The most important aspect of leadership is ensuring that you have a  productive and effective team. The objective all leaders have in common is to run a successful business after all!

Top Tips for All Leadership Styles

Whatever your leadership style, here are a few tips you should keep in mind.

1.     Have a Clear Vision

If you’re unsure of where you’re headed, how would you expect your employees to know? Ensuring that all team members are on the same page and aiming for the same goals is the first step on the path to success, no matter what your leadership style is.

2.     Learn to Listen

You may have hundreds of ideas and know exactly where you want to take your business, but your team members need to feel heard. A good leader recognizes this and focuses most of their communication on listening.

3.     Be a Leader That Makes Decisions with Authority

As a leader, even when your team members are undecided or do not agree, you need to be able to stand up and make a decision. Team members may not always support your decisions, but they will respect you for making a decision and doing so quickly.

4.     Be Empowering

If you have a team with a range of skills and abilities at your fingertips, make the most of it. A great leader will empower people to do what they do best.

About the Author

Mark Friend is a Chartered Accountant with over 30 years of experience. He set up his own firm in 1992 and formed Friend & Grant in 2005. Mark has built strong working relationships with many business owners and enjoys helping business owners to save tax, time, and create wealth. Mark is also a director in a highly successful software company and holds a number of property investments with his wife, Jan.

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