Which of these 7 different styles of leadership is right for your business?

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Different styles of leadership can lead to very different team cultures and experiences. How would you describe your leadership style?

Leadership styles in management can vary based on industry, local customs, and personality.

In mentoring relationships, it is important for both the mentor and mentee to practice their leadership skills. In fact, 71% of mentors on MicroMentor say that mentoring has helped them improve their leadership skills.

There are many different styles of leadership, but we will focus on 7 of the most common here.

  1. Transactional leadership
  2. Transformational leadership
  3. Servant leadership
  4. Democratic leadership
  5. Autocratic leadership
  6. Bureaucratic leadership
  7. Laissez-Faire leadership

While there may not be one “best choice”, different styles of leadership may work best in specific situations.

Keep reading to explore each of the 7 different leadership styles and how you should—and should not—put them into practice in business.

Transactional leadership

This leadership style helps to establish roles and responsibilities by using incentivization to motivate employees.

For example, a transactional leader might motivate their team with a scheduled bonus for generating a certain number of leads in a quarter.

Transactional leadership can be effective, but can also encourage employees to do the bare minimum to meet goals and nothing more. It is much more effective to use this leadership style in conjunction with transformational leadership.

Transformational leadership

Transformational leadership is a popular style among growth-oriented companies as it encourages employees to see what they are capable of.

This type of leader will constantly push their team outside of their comfort zones.

For example, a transformational leader might provide their employees with a list of goals with deadlines. While they may seem straightforward at first, the manager might start adding more challenging goals or pick up the pace of deadlines.

Without the right coaching to guide team members, this style of leadership risks leaving team members with different learning curves behind. However, it can also motivate and build confidence among employees.

Servant leadership

The servant leadership style can be a very effective model for empowering teams and boosting morale.

Servant style leadership means prioritizing the needs of your team above all else. A leader or manager using this style of leadership will focus their energy on elevating and developing their teams.

An example of this style could be a manager investing their time in a project to helping a team member develop a specific skillset, regardless of how much this slows down the process and takes up their own time.

While it can be challenging for many of us, the servant leadership style has long term benefits for teams and creates a culture of trust among team members

Democratic leadership

Democratic leadership is an extremely effective leadership style because it empowers team members at all levels to feel empowered within the organization.

In this leadership style, the leader makes decisions taking into account the input of all team members, regardless of their seniority or expertise.

An example of democratic leadership in action is a meeting in which a leader might provide the team with a few decision-related options. After an open discussion about the options, the leader would take into account the team members’ thoughts and feedback or open the decision up to a vote.

Autocratic leadership

This leadership style is one of the least effective ways of practicing leadership.

In this style, the leader makes decisions without taking input from any stakeholders. Team members are expected to adhere to the decision however the leader sees fit.

An example of autocratic leadership could be when a team manager decides to take on a new project without consulting anyone on the team about capacity, strategic relevance, or practicality.

Autocratic leadership disempowers team members and results in decisions lacking the necessary input from stakeholders to be successful.

Bureaucratic leadership

Another ineffective leadership style is the bureaucratic leadership style.

Unlike autocratic leadership, this style might consider the input of team members. However, if that input conflicts with existing policy the leader will likely reject it.

This style of leadership is commonly found in larger and older organizations who have successful processes already in place.

Bureaucratic leadership is quick to shut down innovation and discourages new ways of thinking and achieving ambitious goals.

Laissez-Faire leadership

The laissez-Faire leadership style is often found in younger start-ups.

In this leadership style, leaders put nearly all the decision making power in the hands of their employees.

For example, a leader might not set official policies around project deadlines or working hours for their employees.

While this style of leadership can empower employees to set their own goals and work in a way that works best for them, it can also limit professional development and overlook strategic growth opportunities.

Which leadership style is the best?

With the exception of autocratic and bureacratic styles, each of the other 5 different leadership styles can be beneficial depending on the project or circumstance.

Servant and democratic leadership styles can produce the best long term results for teams and create nurturing team cultures.

Transactional, transformational, and laissez-faire leadership styles may not always be the most effective, but can provide value on a case-by-case basis.

A mentoring relationship is a great place to practice these leadership styles. Open up a discussion with your mentor or mentee about how this might look within your mentorship.

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