An Exploration of Leadership Styles: Which Is Best for Your Business?

Leadership styles play a significant role in the overall sustainability of an organization. From increasing employee morale and productivity to managing crises and implementing changes, different styles of leadership can inspire positive results. The effect of leadership on revenue, productivity, innovation, and corporate culture are well-documented. Choice of leadership style can increase – or decrease – sales. Research illustrates that poor leadership practices can cost an organization an estimated 7% of total annual sales. As high as 32% of voluntary employee turnover could be avoided with better leadership skills. Poor leadership stands in the way of employee engagement and actively creates employee disengagement. The bottom line for organizational leaders/owners: your leadership style matters.

The 6 Basic Leadership Styles

Influenced by each leader’s emotional intelligence, leadership styles can have both positive and negative effects on a company’s outlook. In Daniel Goleman’s recent article in the Harvard Business Review “Leadership That Gets Results,” the author describes six leadership styles that can be effective, depending upon business goals:

    • Authoritative. When you want to provide direction to employees while offering creative freedom to solve a problem, the authoritative leadership style is ideal. Taking this approach extends employees an invitation to use their strengths to solve problems, meet needs, and reach goals. Sometimes, you need a decision-maker on the front lines.

    • Coercive. Is time of the essence? The coercive (or direct) style of leadership results in getting tasks completed. This double-edged style can discourage employees, however, resulting in decreased morale, reduced confidence, and plummeting productivity.

    • Pacesetting. Perfect for inspiring employee improvement, the pacesetting style of leadership establishes high expectations for employee performance. Team members with a drive to succeed – and excel – in their roles respond positively to this leadership style; however, underperforming or unmotivated employees tend to respond negatively, or not at all, to this form of leadership.

    • Coaching. For leaders intent on building a solid team, the coaching style offers ample opportunity to develop employees professionally. Many leadership styles focus on the completion of immediate tasks or the meeting of high standards. But coaching aims to fine tune skills, facilitate personal growth, and prepare employees for the future.

    • Democratic. By inspiring employees to participate in the decision making process, the democratic leadership style effectively unites team members while inspiring employees to innovate and take ownership of an organization. Even if it’s successful in these goals, an organizational democracy can blur the lines between leadership and workforce.

    • Affiliative.Choosing to prioritize people over performance, the affiliative style of leadership emphasizes harmony among team members and generally boosts employee morale. The drawback to using this style exclusively, however, is a tendency to neglect performance concerns while failing to provide clear direction to team members.

Combining multiple styles of leadership yields long lasting results, provided you’re aware of each style’s strengths and weaknesses. Ultimately, the success of your business depends on your ability to lead using several of the six basic leadership styles.

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Which style of leadership do you employ most, and what has been the result for your business?

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