Psychologist and author Daniel Coleman conducted a study that reviewed and analyzed more than 3,000 middle-level managers to find out specific leadership behaviours and their effect on profitability. The study’s findings revealed that a manager’s leadership style was responsible for 30% of the company’s bottom-line profitability, making it one of the most important aspects of succeeding as a great leader in any organization.
What is Leadership Style?
A leadership style is a behavioural pattern that a leader adopts to influence the behaviour of his followers, i.e. the way he gives directions to his subordinates and motivates them to accomplish the shared objectives.
For instance, Princess Diana was an excellent leader who used her transformational leadership style to empower her followers by enhancing their perceptions of self-efficacy and their confidence in their ability to overcome obstacles by using verbal persuasion and recognition and functioning as a role model.
Why It’s Important to Know Your Leadership Style?
Let’s take the example of two sales teams in the same organization; the first team is overperforming and hitting all their targets, while the second team is struggling to meet the bar. More often than not, this boils down to how effectively the leader influences and motivates their team to meet their targets. Understanding your leadership style can make an enormous difference, as it can help pinpoint behaviours that either aid or block leaders and their teams from achieving their goals. This knowledge can also be used to improve management style and help better guide teams.
The Different Leadership Styles
1. Transformational Leadership
This leadership style inculcates the concept of transforming one’s organization, employees or teams into a better version. Transformational leaders provide their team members opportunities to explore different approaches and ideas. They make their team feel they care about them by putting them and their needs first. They express care and concern for their team members and work on fixing their problems together. This approach fosters a sense of bonding, belonging, and loyalty toward the organization.
For instance, let’s take Reed Hastings; when Netflix was first launched, it was a DVD rental company that today has surpassed Blockbuster as a favourite for movie fans. Hastings had a bigger vision for the company, unfettered by any entertainment experience to stand in his way or let the opinions of others in the industry wear him down. He introduced streaming, and his gamble paid off. Today Netflix has about 220.67 million subscribers worldwide and is the largest online streaming provider of video content.
2. Servant Leadership
The term ‘servant leadership’ has been around for ages and refers to a ‘‘philosophy and set of practices that build better organizations, enriches the lives of individuals and ultimately creates a more just and caring world,” according to Greenleaf Center for Servant Leadership.
Servant leaders ensure that everyone knows their job and has the necessary tools and supplies before they begin. If they don’t, servant leaders train and guide them to do precisely that. This leadership style is a favourite among employees as it works wonders for employee morale and experience.
One of the most prominent servant leaders was Abraham Lincoln, the former President of the United States. The American Civil War provided a platform for Lincoln to showcase his extraordinary servant leadership. Two of the most lasting results of his servant leadership are preserving the Union and freeing the enslaved people. Lincoln’sLincoln’s commitment to serving the greater good has revolutionized and forever changed a nation for the generations that have followed.
3. Democratic Leadership
Democratic leadership, or shared leadership, is a leadership style in which all group members participate in decision-making at all levels. With a democratic leadership style, everyone in the team can participate and share views and ideas, with discussions being encouraged. Research has found that this leadership style is one of the most effective and leads to better contributions from group members, higher productivity and increased group morale.
In the early days of Google, Founder Sergey Brin and Larry Page tasked CEO Eric Schmidt with hiring experts in specific fields to drive growth aggressively, with a liberal sense of autonomy afforded to them. To date, Google still operates this policy to a certain extent, with the company’s notorious recruitment process ensuring that they hire only the best in the industry.
4. Charismatic Leadership
Charismatic leadership is a form of professional guidance built on persuasiveness, strong communication skills and charm to help them get the best out of every employee. Charismatic leaders tend to be passionate, have charisma and have strong convictions with a deep connection to the work that they’re doing—which, in turn, inspires the same confidence within their team members. Because of their intense commitment to their work, they tend to evoke strong emotions from their followers and teams. This encourages devotion, action, and strong problem-solving skills.
No one emulates charismatic leadership better than the beloved American Host, Oprah Winfrey. Her charismatic leadership style is known to draw people toward her vision while working to transform the world into a better place. Her charisma and determination have led her to become the first female African-American news anchor in Nashville, followed by a morning talk-show host before creating the infamous and iconic Oprah Winfrey Show (Oprah Winfrey). She notoriously overcame a tumultuous and abusive childhood to become the living legend she is today.
5. Coaching Leadership
Defined by Kenneth Blanchard and Paul Hershey in the 1960s, coaching leadership is common in today’s workplace as its positive nature promotes the development of new skills, revisits company objectives and, most importantly, fosters a confident company culture. This type of leadership incorporates coaching mindsets and behaviours, synthesizing them to create the highest performing type of leadership. It does this by unlocking and enabling potential. This is distinct from the traditional management style of command and control, which can often stifle potential.
Sheryl Sandberg, the former COO of Meta, is known for having exceptionally high expectations for her team and for providing plenty of praise, recognition, and support. By coaching her team and guiding them, Meta has grown into one of the leading organizations globally, with a market cap of $562.19 Billion.
Leadership Styles After COVID-19
The pandemic has drastically evolved leadership, giving rise to a new leadership style: situational leadership. The situational theory suggests that no single leadership style is best. Rather, it depends on which type of leadership and strategies are best suited for the task at hand. According to this theory, the most effective leaders are able to adapt their style to the situation and look at cues such as the nature of the group, the type of task and other factors that may influence the outcome.
For instance, Brian Chesky, CEO of Airbnb, who relied on travel and tourism, found its sales plummeting to a record high of 70%, with its valuation cut in half during the pandemic. For a company that was planning to go public, the shock of COVID-19 left the company paralyzed. However, Chesky quickly rose to the occasion, borrowed money to stay afloat, and cut executive salaries in half. The company listened to users and offered partial refunds for hosts who would otherwise incur massive losses. They scaled back to focus on their core business, laid off 25% of the global workforce, and even earned praise for the compassion and tangible support they offered to those leaving the company. With his impeccable leadership style, in just under six months, Airbnb turned itself around, regained profitability, and went public in one of the most awaited IPOs of the year.
In Conclusion:
Regardless of your current leadership style, there are likely a few changes you can make to be a more effective leader. Like anything, leadership is a learning process; it takes trial and error to get it right. As John F. Kennedy, 35th President of the United States, said, “Leadership and learning are indispensable to each other.” In addition, you can also refer to Four C’s for Great Leadership if you are starting your leadership journey.
