A Comprehensive Guide to Leadership Styles

Defining leadership is rarely straightforward. There are as many leadership styles as there are different attributes that make up a leader.

From Richard Branson’s democratic and participative leadership style to Nelson Mandela’s servant or steward leadership style, there is no one right way to lead. To become a successful leader, you must fully understand what constitutes various leadership styles (and the attributes that define them) to be able to pick the best style that would benefit your organization and enable its advancement.

You may not know precisely what your leadership style is right now or what style you want to have. There’s nothing wrong with that! Leadership development is an ongoing process, even if you’ve been a leader for years. Below, we’ll help you better understand what leadership styles exist, the attributes of those styles.

What Are Leadership Styles?

Leadership styles are highly influenced by a leader’s own experiences and innate leadership skills. Hence, it’s safe to say that most leaders work and rely on their instincts.

Of course, not everyone is going to carry that charismatic aura like Apple’s Steve Jobs or have an inspiring origin story people can rally around like Alibaba’s Jack Ma. MentorcliQ’s VP of Sales Operations, Dominic Monley (an amazing leader himself), puts it best with one of his go-to phrases: “It’s a spectrum.”

But why does having specific leadership style matter if every leader is different?

As a leader, you play a pivotal role in the direction that your organization takes. It influences your ability to create a healthy team dynamic, build a positive work culture, and impact overall productivity. But leadership is also something that’s built on understandable and repeatable practices and habits. And that is something that can be categorized in an understandable way.

Importantly, every organization requires different leadership styles, both broadly and across different teams. It’s crucial to understand your innate leadership skills and attributes. Take notes if you’re on your way toward assuming a leadership position. Assess how you respond to certain situations, the decision-making process, and the approach you take to motivate employees. That would indicate your leadership style.

While it’s possible to change your leadership style, it will take time, effort, and, of course, the need for a change.

Take the Leadership Styles Quiz

Not sure where you land on leadership styles? Take a moment to take this simple, 20-question leadership styles quiz.

How did you do? Were there any big surprises? Please note that this quiz is not definitive (and definitely not meant to be). It should help prime you for everything you’re about to read below, however.

Types of Leadership Styles

If you’ve taken the time to fill out our quiz above, you might have some idea of what leadership styles most align with you right now. You may also have discovered that you have an affinity for almost all of them, which does happen (especially since our quiz is too short to give a very in-depth personality assessment).

You should familiarize yourself with the different leadership styles, as they will inform you of how they can impact those you lead and the entire organization. Here, we’ll elaborate in more detail on the 10 common leadership styles you will probably encounter or adopt as you develop as a leader.

Steward Leadership

Steward leadership, also known as servant leadership, is revolutionizing how we look at leaders. For so long, the general idea of a leader is someone who innately possesses leadership characteristics that can positively influence and motivate employees.

Well, yes and no.

Just because you possess leadership traits doesn’t mean you can lead well. In today’s business landscape, authoritarian leadership no longer seems to be as effective as it used to be. Instead, steward leadership is emerging as the most effective leadership style to foster engaged teams.

Steward leaders possess distinct characteristics that include having a vision that enables them to align with the shared vision of the organization. Moreover, steward leaders aspire to continuous learning and seek growth and development for themselves as much as for those they lead.

Steward leaders are natural mentors. They thrive in providing guidance and training others to become better.

This leadership style impacts the decision-making process in an organization, especially in valuing diversity among the workforce and recognizing opportunities for employee development. Steward leaders are excited about innovation and new opportunities to address and resolve organizational issues.

Foresight Leadership

Foresight leadership is another type of leadership that is creating a buzz in the business world. Foresight leaders focus on identifying trends and opportunities and taking those into account with the company’s strategic planning for the future.

But there’s more to foresight leadership than forecasting trends. It’s not about predicting the future with a crystal ball full of data. Instead, it’s about being keen to identify opportunities where they present themselves.

The more you can foresee events before they happen, the better you can mitigate risks and change your existing strategies to adjust to these events and factors accordingly. Of course, every step and decision must align with the company’s short- and long-term goals. It’s a balancing act.

As such, foresight leadership is also about influencing your employees to adopt the future-thinking mindset, which requires scenario planning, openness to change, resilience, and a long-term vision.

Operations Leadership

Operations leadership addresses the core aspects of the business — operations. This includes three important elements:

• People
• Processes
• Technology

An effective operations leader must be realistic.

While employees and team members are pivotal to the success of an organization, a good operations leader offers constructive feedback based on facts and figures to increase efficiency and optimize performance. At the same time, operations leaders must learn to listen and empower their team members.

Note that constructive feedback is essential, not only for the success of your initiatives but for the growth of your team members. Officevibe found that a large percentage of workers aren’t particularly happy with the amount and quality of feedback they get, meaning you need to be thoughtful and strategic about it.

Another important attribute for operations leaders is a focus on efficiency. Whether it’s to reduce operational costs or improve quality, it boils down to efficiency. Operations leaders command the input and output of company resources. The more efficient you are, the sooner you can meet company objectives. It requires the ability of a leader to designate roles and motivate employees in each department to achieve their respective goals.

Finally, operational leaders tend to focus on quality. Paying attention to quality pushes your team to meet the clear expectations you’ve set and to meet customer demands. It also fosters pride in your products or services.

Financial Leadership

Financial leaders are known for their financial knowledge and expertise, which they utilize to create opportunities for organizations to attain financial success.

The focus of financial leadership is to ensure the profitability and performance of the organization. I know what you’re thinking. “This is just a CFO. This isn’t really a leadership style”.

Not quite.

While the role heavily involves financial analytics, it’s also intertwined with other departments, such as risk management, compliance, and internal audit. Any leader from any department can be a leader who prioritizes their style around the financial health of the organization or their team and makes decisions based on that.

Successful companies need a forward-thinking approach to financial leadership. It requires the ability to look beyond numbers and analyze issues or opportunities, whether tax or economic obstacles.

Meanwhile, effective financial leadership involves using those numbers to forecast future trends and performance and filling in gaps with strategic planning.

Technical aptitude, collaboration, and strategic planning are essential components that are required for financial leaders to prepare for their expanding roles.

Democratic Leadership

Democratic leadership style is where democratic leaders do exactly what the name suggests: they solicit input and feedback from each team member. While leaders make the final decision, employees have an input on the direction of the organization regarding strategies and vision.

Richard Branson, who we mentioned in the intro, is one of the most notable adherents of the demoractic leadership style. Like him, democratic leaders ensure every employee’s voice is heard, resulting in a more engaged workforce. And when employees are engaged, they experience increased motivation and participation.

It’s that kind of mindset and leadership style that is the key to the success of Branson’s reverse mentoring program and other inclusion initiatives.

Another advantage democratic leaders offer is their ability to value what every team member brings to the table. Since you hire people to join your team for their skills, knowledge, and expertise, getting feedback is critical to maximizing their participation and opinion.

Still, democratic business leaders are not immune to challenges. Reaching a consensus or making a strategic decision can be challenging at times. And there will be times when you have to proceed without consensus or even without a majority. While it’s good for democratic leaders to welcome feedback, not all team members might have the right expertise to offer effective feedback in every situation.

Transformational Leadership

Transformational leadership is often confused with charismatic leadership. But transformational leaders are different in their intent.

Transformational leadership looks ahead to the future. They aim to defy conventions and look at other ways of doing things that would bring more efficiency and productivity to the organization.

However, transformational leaders do not act alone. They inspire their employees to think creatively and see things in a new light.

Transformational leadership style is essential for organizations to improve business processes. Just because certain processes work just fine, it doesn’t mean you cannot improve them. With the goal of improving productivity and profitability, transformational leaders think outside of the box.

Transformational leaders also possess other essential leadership attributes, such as persuasion and listening. (We’ve also defined and outlined 10 leadership attributes here.) Actively listening to what your employees have to say would broaden your perspective on what your organization needs to take that next major step forward.

Transformational leadership benefits the team because employees feel valued and supported. But it’s not without a learning curve. As a transformational leader, you must monitor and set realistic performance benchmarks to avoid employee burnout.

Coaching Leadership

The coaching leadership style focuses on identifying and nurturing the strengths of employees and improving their weaknesses. Coaching leaders understand the value each team member offers on the way to progress. Thus, there is an emphasis on the performance and success of individual employees.

Coaching leaders employ several strategies to develop employees, such as:

• Offering guidance and mentoring
• Giving new tasks to challenge their skills
• Giving constructive feedback

Coaching leadership emphasizes employee skill development and enhances problem-solving skills. The goal is to make employees more independent and ensure they become critical assets in your aim to build a strong company culture.

Certain employees thrive in this leadership style because their unique skills are valued, and they feel they are making a huge contribution to the team. And as you might expect, coaching leadership involves a heavy dose of mentorship, as these leaders tend to see its value within the organization.

A major challenge coaching leaders face is that mentoring won’t guarantee immediate results. But done right, you will see results and an impressive mentoring ROI. And even if you focus on skills development, it takes time to see results.

Visionary Leadership

Visionary leadership values the short- and long-term goals of the organization. Visionary leaders have a clear plan and encourage employees to stick with that plan. And for that to happen, visionary leaders must be persuasive in their communication strategy.

Prioritizing future growth, visionary leaders anticipate potential roadblocks and develop actionable steps to boost employee confidence during uncertainties.

Understandably, you may be wondering how visionary leadership differs from foresight leadership.

Here’s how you can distinguish between these two:

Focus and approach:

• Visionary Leadership: Concentrates on a clear plan and encourages employees to follow that specific plan. It emphasizes persuasion, teamwork, and collaboration to move the company towards shared long-term goals and anticipates potential roadblocks.
• Foresight Leadership: Focuses more on identifying trends and opportunities and aligning them with the company’s strategic planning. It involves scenario planning, openness to change, and resilience to adjust strategies according to foreseeable events.

Risk handling and adaptation:

• Visionary Leadership: May overlook day-to-day issues or miss opportunities in pursuit of a particular long-term vision. Constant check-and-balance is required to recognize the value of all goals and manage risks.
• Foresight Leadership: Prioritizes foreseeing events before they happen to mitigate risks. It emphasizes changing existing strategies to align with both short- and long-term goals, maintaining a more dynamic and flexible approach to risk handling.

Employee engagement and mindset:

• Visionary Leadership: Relies on persuasive communication to get employees to enjoy their work and feel a sense of contribution towards the company’s progress. Encourages shared sentiment in reaching goals through teamwork.
• Foresight Leadership: Influences employees to adopt a future-thinking mindset, requiring more analytical skills like scenario planning and a keen sense of identifying opportunities. Promotes openness to change and resilience.

Note that these two are not in conflict. One can be both a visionary leader and a foresight leader. In fact, you should likely be both if you do plan on being one or the other.

Visionary leadership works because teams enjoy their work as they feel they are contributing to the company’s move toward progress. They also share in the sentiment of visionary leaders in reaching a shared goal through teamwork and collaboration.

The potential risk of the visionary leadership style is that a visionary leader could overlook day-to-day issues in exchange for their long-term vision. Meanwhile, a hyper-focused look at a particular goal can cause them to miss potential opportunities that are just as valuable to business growth.

For visionary leadership to work, there should be constant check-and-balance to ensure everyone can recognize the value of all goals.

Transactional Leadership

Transactional leadership is a straightforward approach to leading a team, which involves individual team members (employees) receiving a reward or compensation for performing a job.

Since the action is a transaction, leaders can impose punishment on the employees that fail to meet the company standards in performance and productivity.

A transactional leadership style is evident in various business situations to attain a higher level of performance.

This leadership style is effective because the process is straightforward. Whatever the employee puts in, they also expect something in return. For example, an employee who does great work may expect to be honored with an employee recognition or reward program.

But there are potential perils with transactional leadership since some employees might feel limited in their ability to use creative thinking and knowledge. As a result, you could be at risk of high staff turnover because there is little room for job satisfaction.

Also read: Workplace Mentoring: Reduce Turnover and Increase Engagement

Laissez-faire Leadership

Laissez-faire leadership, or the hands-off approach, is exactly what the term means: “Let them do.” Laissez-faire leaders embrace giving authority and autonomy to employees, empowering them to make decisions and improve accountability.

This leadership style motivates employees to perform their best because they have creative freedom, and the company culture encourages involvement in every aspect of the business.

As a result, a laissez-faire leadership style lacks the more rigid and structured qualities found in traditional companies. They entrust their employees to do what is best for the organization, and employees return the favor by delivering work beyond what is expected of them.

One of the best examples of this I have seen is at the startup daydream. The programmatic SEO company maintains a project-based approach that emphasizes intentional work. The forward-thinking style championed by its leaders results in opportunities for creative curiosity, more manageable meeting schedules, and a strong work-life balance in ways that don’t compromise important task completion.

While there are notable benefits to being laissez-faire leaders, it would be difficult to navigate when you are dealing with new hires or inexperienced employees. The latter requires more guidance and might find it challenging to work autonomously without support, guidance, and the same level of skills and expertise possessed by more experienced employees.

Use Mentoring in Your Leadership Development

Organizations benefit most from leaders developed internally. Leadership development can mean training high-potential employees for future leadership roles, equipping them with the necessary skills to excel as executives. Yet, it’s not just for emerging leaders; even existing leaders and CEOs can benefit.

Leadership development isn’t uniform; it requires a customized approach based on specific leadership styles and organizational needs. The training could be function-specific, focusing on departments like sales or development, and needs to consider the unique requirements of both new and transitioning leaders.

A major takeaway is that mentorship is a highly effective leadership development strategy, with many top companies adopting mentorship programs and software to cultivate leadership skills organically from within.

Which Leadership Style Is Right for You?

With multiple leadership styles (and many more to come as the working world is constantly evolving), choosing the ones that work best for your organization can be overwhelming. What works for other organizations might not work for yours – and that’s exactly why we’re exploring different leadership styles.

Ultimately, true leaders are the ones who can adopt the right leadership style that honors their own skills and empowers their employees to improve and collaborate towards a shared goal.