5 Types of Leadership Styles That

Influence Business Outcomes

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by Maren Fox
November 16, 2017
What type of leader are you? What works for one individual or team may not work
for another. Although some may argue that there is an inherently wrong way to
manage employees, unfortunately there’s no prescribed right way to manage
employees. Instead, the way you lead a team first depends on your individual
strengths, the goals of your organization, and the disposition and competencies of
your team members.

To help answer this question, it’s important to understand the different types of
leadership styles. In general, leadership theories or techniques can fit into one of
three styles:

 Authoritarian leadership positions the executive at the center of the

decision-making process and relies on defined tasks and close monitoring.
 Participative leadership empowers employees with increased influence
and responsibilities and involves them in some decision-making processes.
 Laissez-faire leadership is negligible in practice and process and enables
group members to make all the decisions.
To dig deeper, let’s review five types of leadership styles that impact business
outcomes.

Directive Leadership
Do you view employees as subordinates and tell them exactly what to do and how
to perform? You may be a directive leader. Also known as coercive management,
this instructional technique is concerned with employee compliance. Directive
managers pay close attention to their employees’ actions and motivate them
through discipline. Furthermore, they often employ transactional techniques such
as rewards and punishments to drive results.

Directive leadership is hierarchical and values consistency, control, and

predictability above all else, and goals are achieved through the use of coercion
and dominance. As you might imagine, in many situations, these managers create
a toxic workplace. In his book Stewardship: Choosing Service Over Self-Interest,
organization development expert Peter Block writes that, although the values of
consistency, control, and predictability “purport to create accountability, in fact
they prevent it.”
Unlike compassionate, purpose-driven leaders who focus on serving the
stakeholders of an organization or community, directive management is motivated
by controlling costs, achieving prominence, and self-interest. However, these
managers may not be aware they are being domineering. “It is not that we directly
seek dominance, but our beliefs about getting work done have that effect,” writes
Block.

Transformational Leadership
Leaders who exhibit transformational techniques inspire their staff through
communication and collaboration. How so? By creating a natural environment of
intellectual inspiration. If you work to enhance your team members’ morale—and,
when successful, job performance—you exhibit transformational tendencies. You
most likely serve as a role model that inspires and executes change with your team
members.

Transformational leadership is often considered desirable among employees

because management works directly with employees to create a vision and identify
change. However, it’s essential for managers to balance idealistic thinking with
strategy. Although they can inspire accountability, it’s important that leaders
understand both the strengths and weaknesses of their employees. To walk the
walk, they must coordinate tasks with techniques.

Bad news? The old leadership model is broken. Good news? Our
infographic, The New Leadership Paradigm, demonstrates a better way.
Servant Leadership
The servant leadership style distributes the wealth of power among an entire team
—and it is the servant leader’s role to facilitate this. The servant leader unites their
team through common cause, by trusting team members, and by actively listening
to their team members’ ideas and struggles. If you encourage collective decision-
making, practice active listening, and focus on the growth of your team, then you
are a servant leader.

Unlike top-down hierarchical structures, servant leadership encourages

collaboration, trust, and empathy. The servant leader unlocks purpose and
ingenuity across their employees—and, when successful, creates happy, engaged,
and more productive employees. Recalling her journey toward becoming a servant
leader in her book Dare to Serve, CEO of Popeyes Louisiana Kitchen Cheryl
Bachelder writes, “I had a chance to step out of the spotlight; to lead the people to
a daring destination; to serve them well along the journey; and to create the
conditions for superior performance.” By adopting the servant leadership style,
Cheryl turned around a struggling franchise-based enterprise. “Popeyes’
performance results have been remarkable. I only wish I had been humbled
sooner,” writes Bachelder.
Servant leadership does require long-term commitment. Although it has the
potential to inspire high employee accountability and loyalty, management must
still exhibit leadership tendencies. Ultimately, the servant leadership style of
management does not allow for much control over employees, so managers must
be confident in both the abilities of both their team members and themselves.

Participative Leadership
Commonly known as the democratic style  of management, participative leadership
has the objective of building commitment and consensus across a team. Like
servant leadership, executives ask for input from their team members before
making a final decision. However, in participative leadership, management makes
the final decision.

Do you value the input of team members and actively work to boost morale? Then
you know that employees play a vital role in any organization’s processes, and you
help illustrate how employees affect organizational change. To avoid the pitfalls of
true laissez-faire leadership, however, leaders must exert some element of
influence. Ultimately, organizations with a strong structure can benefit from
participative methods.

Authoritative Leadership
Like transformational managers, authoritative leaders are concerned with long-
term direction and foresight. If you employ a “firm but fair” mentality, you may be
an authoritative, or visionary, leader. Although authoritative leaders provide
employees with clear expectations and explanations, they may impart elements of
persuasion, too. However, unlike other authoritarian techniques, leaders still
consider employee feedback and communication.

The most effective authoritative managers are those who lead with a clear
direction. They lead by example and manage with a high level of conviction—
which, in part, inspires employees to follow their guidance. However, with too
much control, employee insight and opinions often take a backseat. This limits
collaboration and can stunt employee growth. Successful authoritative teams
require leaders who include their employees in the decision-making process.

With so many different types of leadership styles, you’re bound to find one that
works with your individual strengths and weaknesses—but also one that helps
guide your employees and organization toward success.