Since the earliest humans roamed the earth, we have been identifying and following leaders. Wherever you go in the world and whatever the culture, either an individual or a group of individuals is responsible for leading and supporting others as they try to achieve a goal. Essentially, a leader is a person who motivates and guides the people around them, and business organizations are known for requiring—and producing—some of the best.
The traditional view of a leader is someone who is perceived as being ‘higher’ than their followers, who provide instruction and wisdom and can hand out reward or punishment as they deem fit. This would be someone in position of authority and control issuing orders for others while keeping a distance from the work themselves.
However, while we have looked up to and followed leaders for thousands of years, the types of leaders we have chosen (or suffered under) have varied greatly. The modern business leader, in particular, is incredibly difficult to define as many are putting themselves right at the center of the business rather than presiding over employees from a distance. They are often instrumental in the modeling of key values, acceptable standards of work, a positive culture of collaboration and accountability as well as providing pastoral support where needed.
This guide explores the different traits, types and styles of leadership, which is found in modern businesses to help you identify and improve your own approach to organizational leadership.
What skills does a modern business leader require?
One of the most important skills a business leaders needs is to be able to develop and gather support for a vision. The vision could be the ideal result from a project or the ideal state of a team, department, or organization in the future. It could be to carve out a section of the market in a particular niche or industry or a more general ambition such as being the most innovative company amongst competitors. Whatever the vision, a leader needs to be able to communicate it in such a way that their team shares in it completely and is motivated to achieve it.
To achieve that vision, a leader needs to develop a series of plans and goals which will bring that vision into reality. A leader will work with their employees, colleagues, partners, customers, stakeholders, and suppliers to organize and deliver the strategy. This also requires continued analysis and adjustment as the strategy adapts over time.
Motivating others is not as easy as many people may assume. While it’s important that a leader is a source of positive energy for the team, this is not enough to sustain a team during stressful periods or challenges. A motivational leader is someone who sets achievable but challenging goals, coaches, provides feedback and enables employees to develop their own skills. Very few people will give a role or project their full energy for money alone; they need an ulterior motive for going the extra mile, and the efficacy of their leader is crucial.
In summary, to be an effective leader, you need to be able to:
- Establish and maintain trust
- Deliver clear direction and communicate with transparency
- Take responsibility for the team’s performance
- Continually optimize strategy
- Motivate others to achieve their best performance
- Encourage experimentation and continued learning
- Nurture talent
- Support and guide others in their decisions
- Train and impart knowledge
- Establish and develop a positive team culture, e.g., accountability.
The best leaders are those who have an impact on the people they work with whether they are partners, colleagues, or employees. They have a natural spark of energy which fires both their motivation and that of the people around them. Their communication and other soft skills enable them to translate their vision into clear and obtainable goals for their team. No leader is perfect, and there will always be frustrations and challenges when trying to lead a business, but it’s also one of the most rewarding professional paths if you have what it takes.
Types of leadership styles
An individual’s leadership style is how they manage to exert influence over others to achieve a goal, but the type of leadership will usually be impacted by the unique consequences of the organization, the followers and the overall aims of the project. For example, some leaders are not comfortable with a high degree of decision-making pressure, while others find taking the opinions of too many other people into consideration to be ineffective. Leadership will sometimes require quick decision making while different situations may need more research and consideration.
Here we have outlined the most common leadership styles which people tend to adopt when leading an organization. Not all of them would be appropriate for your situation, and it’s not uncommon for leaders to adjust between several different styles depending on the situation at hand.
An autocratic leadership style is focused on the person in charge holding all the responsibility and authority. This means they would be making decisions on their own without discussing or consulting with any colleagues or employees. Once a decision has been reached, it would be communicated to subordinates who would be expected to implement it without question with very little flexibility. These leaders would make use of policies, guidelines and written procedures. Autocratic leadership is rarely sustainable or effective in the modern world.
Democratic leadership, as the name suggests, operates as a societal democracy would. While an autocratic leader would make decisions alone, a democratic leader would seek and consider the contributions and opinions of subordinates. While the leader has the final say on decisions and is ultimately culpable, they may delegate tasks and responsibilities to other people. This leadership style requires a high level of communication which flows both ways from leader to the rest of the team. It is built on a foundation of transparency, competence, and creativity.
Strategic leadership is often required at the very top of an organization, but their influence will spread to all levels. This involves managing projects and day to day operations to meet the practical needs of the organization but also what the organization will need in the short and long-term future. During times of change and difficult periods, a strategic leader will be essential to continued growth and stability.
Transformational leadership comes into its own when an organization, team, or individual is embarking on a period of significant change or development. This is particularly important in terms of motivating people to achieve not only what is expected of them but to go beyond expectations of themselves and those around them. Transformational leadership is often the most rewarding and effective in terms of securing the loyalty of their followers. It can also result in highly motivated and empowered employees who will achieve a high level of performance.
Team leadership could also be referred to as visionary leadership as it involves creating an overarching vision for a team of people and devising the steps and processes which will be required to enable them to reach this vision. Primarily, these leaders understand that individual people are essential to the success or failure of a project. By giving each individual in the team a strong purpose and a clear sense of direction, you will engage both their hearts and minds, engendering trust.
Team leadership is also about recognizing that teams are not always going to work like clockwork, and sometimes new approaches will be required. These situations rely on the ability of the individuals and the leadership to achieve consistency and overcome challenges. Teams generally become more effective the longer they have been together, which is why organizations with a high turnover of staff often struggle to achieve high performance levels.
If an organization includes people from a range of different backgrounds and cultures or operates internationally, then a cross-cultural leadership approach may be required. This leadership style is most applicable for people who need to adapt their style or skills depending on which market they are in at the time. They may also need to take many cultures into account when leading a multicultural team, which is true of most organizations in the United States.
While facilitative leadership is not exactly a skill, it often requires several skills in order to master it. Essentially, a facilitative leader will design and develop processes and procedures to enable the organization to perform effectively and efficiently. Some facilitative leaders may not need to be involved in a day to day basis unless the organization’s employees need a lot of support. They may also need to manage the dynamics within the team and to adjust processes over time to ensure the can function at the highest level.
While an autocratic leader holds all the responsibility and makes the decisions, a laissez-faire leadership style gives this power to the employees. Employees are given the freedom and trust to manage themselves with very little interference from the leader. This may suit some organizations, but it has been found in many cases to be ineffective and dissatisfying for both the leader and the employees who are left to work without motivation or structure.
A transactional leadership style is often relevant where the leader needs to maintain a level of performance rather than initiating growth or managing change. It involves giving employees a reward when the leader’s instructions have been followed and the desired outcome achieved. It may seem a simple approach to leadership, but mostly it is providing employees with a clear structure of instructions and expectations, and giving immediate reward or positive feedback when they meet or exceed those objectives. It is used in many organizations and, when done well, can be incredibly useful.
A coaching leadership style is common in organizations where results are key to success, such as in sales team. Just as a sports coach would, a business coach will be responsible for motivating employees to meet their targets and providing education and training to help them develop their skills. Coaching leaders are usually inspiring and supportive and may use a range of coaching techniques to maintain high energy levels in their team.
Charismatic leadership could be one of the hardest styles to master as it can often come down to natural confidence and ability to engage the hearts and minds of others. A charismatic leader is often influential simply through their presence and can make a massive difference to the behaviors and beliefs of their followers. They can not only change how someone operates within an organization, but also transform their attitude towards their work.
How to improve as a business leader
While it’s true that some people are more natural communicators, motivators or strategists than others, no one is a born leader. Leadership skills are developed over time and honed with experience, including the need to make some mistakes along the way. However, in addition to gaining experience, there are other ways to improve your leadership skills. For example, there are numerous books and articles written on the subject as well as training courses. You could also study an organizational leadership degree via an online university program which covers many facets of leadership in a variety of settings.
All theoretical study should be supported by as much real-life experience as you can get. Even people who are not already in a position of leadership can take steps to improve their leadership skills. You could put yourself forward to solve problems in the workplace, take on a specific project which you can manage or ask for more responsibility within the team. Any team member can play a crucial role in motivating their colleagues, or you could become involved in organizations outside of work. Volunteering with non-profit groups or planning and running events all require transferable leadership skills.
The more experience you can acquire in supporting, advising, supervising, and leading others, the more challenges you will face. This will help you to tackle issues of increasing complexity and to develop more sophisticated strategies which push you outside of your comfort zone.