At the helm of every successful business is a strong leader. A great leader can help craft a clear vision for a company's future and set a strategic course of action needed to realize that vision. Further, they can lead and inspire the people whose work will turn that vision into a reality.

Strong leaders ultimately help drive a company's success. However, strong leaders aren't all the same. There are diverse leadership styles suited to different types of personalities and corporate cultures. As a business owner, identifying your management style can help you gain confidence as a boss and guide your team members - and your company - to greater success.

This guide identifies some of the most popular and effective leadership styles and explains how you can identify a decision-making process that works best for you.

What Is a Leadership Style?

A leadership style is defined by how a person behaves when motivating, guiding, directing and managing others. This characteristic behavior can be informed by a person's collective traits as shaped by their inherent personality, professional experience and education.

If you aren't confident in your leadership skill set, don't stress. The adage that "good leaders aren't born - they're made" is true. Most people aren't inherently great leaders. Even the most charismatic and beloved bosses have to hone their leadership abilities with time and training. Identifying your leadership style is the first step in becoming a better boss.

The 9 Most Common Leadership Styles

There are many ways to be a good leader, and the diversity of leadership styles reflects this fact.

Autocratic Leadership

An autocratic leader predominantly makes top-down decisions and directs others with little external input. What they say goes. While this authoritative form of leadership may have been normalized in the past, it's less accepted in modern working environments.

Purely autocratic leaders may lose the respect or loyalty of workers if they're seen as too overbearing. That said, an autocratic approach might be necessary in some business scenarios - for example, when a snap-judgment decision needs to be made.

Bureaucratic Leadership

Bureaucratic leadership is characterized by doing things "by the book." Bureaucratic leaders tend to establish clear guidelines and policies for their team to follow - and expect them to stick to those rules.

Bureaucratic leadership fosters great organization, with roles precisely defined and tasks delegated clearly. However, the rigidity that comes with such a system and its adherence to rule-following can limit innovation and creativity in teams.

Charismatic Leadership

Charismatic leadership relies on - you guessed it - charisma. These leaders tend to have charming personalities. They are encouraging leaders whose strengths often include an infectious enthusiasm.

A charismatic leader can be great at rallying a team around a set cause or objective. However, charismatic leaders only succeed if they genuinely possess charm. Otherwise, efforts to influence others can be seen as false and build resentment.

Coaching Leadership

A person with a coaching leadership style is truly comparable to an athletic coach. They see their group members as individual athletes, full of potential. The coach's goal is to motivate their team and help them tap into the full power of their potential. They may nudge workers in a certain direction but rely on them to find the right path independently. They don't force it.

Coaching-style leadership relies on trust and empathy between the "coach" and "coach-ee" if it's going to work. It takes an investment of time and energy to nurture this type of relationship. This can be a drawback, as not all working relationships allow for this kind of connectivity.

Democratic Leadership

Instead of saying "do this" like an autocrat, a democrat will ask their team, "What do you think we should do?" Democratic leaders are open with their teams, sharing information and inviting opinions before making decisions.

Democratic leadership can empower employees and promote a great sense of trust, community and cooperation within a team. However, democratic decision-making can be inconvenient when it's time for quick decisions.

Laissez-Faire Leadership

A laissez-faire leadership style can be seen as the opposite of an autocratic leadership style. The French "laissez-faire" roughly translates to "let it be." That's exactly how a laissez-faire ruler works. They provide minimal oversight and simply trust their team to take the appropriate actions.

While workers may appreciate the freedoms that come with this hands-off leader, they may also feel abandoned at times. Further, laissez-faire leaders run the risk of allowing team members to go in the wrong direction, which can hinder goals and organizational success.

Servant Leadership

Servant leaders cater to their teams instead of always expecting their teams to cater to them. They are dedicated to ensuring employee happiness and satisfaction, encouraging a collaborative approach to reaching goals.

Servant leadership is often associated with high levels of worker satisfaction. However, servant leaders run the risk of endangering organizational goals if they prioritize their team's happiness over reaching objectives.

Transactional Leadership

A transactional leader views their relationship with their team - and each member on it - as a transaction. This emphasizes the contractual nature of the worker-boss relationship. The employee has accepted a job and, as part of that job, they are expected to follow their leader.

A transactional leadership style is beneficial because it's very clear-cut. Every worker will know exactly what's expected of them. This kind of clarity can be especially useful when it comes to complex jobs and duties. However, transactional leadership can be seen as impersonal, which can take a toll on worker morale and negatively impact job satisfaction.

Transformational Leadership

Transformational leaders are focused on the big picture. They want to develop the company for the better and realize that this requires developing individual team members for the better, as well.

A transformational leader can be a significant asset to an organization that wants to pursue big goals and accelerate evolution. However, transformational leaders may get so caught up in the big picture that they neglect the nitty-gritty details of everyday management.

How to Find Your Own Leadership Style

Identifying a leadership style that fits you personally can help you become a better boss, resulting in a more motivated team and greater business success. Note that not all people fall fully into one category. For example, one person may tend toward a democratic leadership style but have to pivot to adopt an autocratic style temporarily when split-second decisions need to be made.

Not sure which of the above options is right for you? Ask yourself these questions to help figure it out:

  • What personal strengths and weaknesses do you have as a leader now? What existing traits can you leverage into a solid leadership style?
  • If any of the given styles resonates with you, are there certain skills you need to develop further to fully fill that leadership role?
  • What personal values and personality traits do you have that might make you better suited for a particular leadership style? While good leadership can be taught and honed over time, you don't want to pick a style that just goes against your natural attitude.
  • What leadership style will best fit your, your team's, and your business's needs and objectives?

If you're still struggling to identify your leadership approach, it may help to get some outside perspective. Exploring the above questions with people who are familiar with you and your business can prove helpful.

You can also find a personal mentor or role model to help coach you in leadership or get assistance from a professional leadership coach. Another (likely more cost-efficient) option is to take an online course like MasterClass.

Finally, note that effective leadership skills take practice. Take time to experiment with different styles and recognize what is and isn't working before making a final decision. Asking for feedback from others, including your team, can help as you're testing out new skills.

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Notice to the Reader

The content within this article is for general informational purposes only and may not apply to you. A business or leadership coach can help you identify a leadership style that works for you.