What Is The Best Leadership Style In Business & Management?

What leadership style is the best for business, management, healthcare, or sales? Let's explore the types of leadership styles you can use.

Table of Contents:

1. What are the types of leadership style?

2. What is the best leadership style to use?

3. The Art Of War in Leadership.

The success of any business or organization depends on the leadership. Whether the business is good, bad, unpredictable, or fast-paced, it is the leaders who steer their team to success.

Understanding the various leadership styles available allows you as a leader to adapt your approach to meet the specific needs of your teams and the challenges they face.

Be flexible when you select the leadership style of your choice.

Leaders must adapt and be flexible.

In this exploration of what is the best leadership styles in management and business, we will examine the eight distinct leadership styles, their unique characteristics, and applications.

Each leadership style has its strengths and weaknesses, and recognizing these can help leaders determine the most effective approach for their specific situation.

Let's explore what are the types of leadership styles:

1. Democratic Leadership -

   
   

   This style emphasizes participation and collaboration, allowing team members to have a voice in decision-making processes.

   
   

   For example, the Sales Planning and Marketing team meet up to discuss the marketing campaign. The leader will hear the discussions and feedback and democratically make the decisions.

   
   

   This fosters a sense of ownership and accountability among employees, which can lead to higher job satisfaction and engagement.

   
   

   Democratic leadership is particularly effective in environments where creativity and input from various perspectives are valued, such as in project teams or brainstorming sessions.

   
   

2. Laissez-Faire Leadership (Hands off Approach) -

   
   

   In this hands-off approach, leaders provide minimal direction and allow team members to take the lead on their tasks.

   
   

   For example, the company consists of different team leaders, each knows their job very well and takes full responsibility for their division. When all the team leaders perform well, the business will automatically thrive.

   
   

   This style can be effective when team members are highly skilled, self-motivated, and capable of working independently.

   
   

   However, it may lead to a lack of cohesion and direction if not managed carefully, making it essential for leaders to know when to step back and when to intervene.

   
   

3. Strategic Leadership -

   
   

   This style focuses on long-term vision and direction, guiding organizations toward achieving their goals through careful planning and resource allocation.

   
   

   Strategic leaders are adept at analyzing market trends, understanding competitive landscapes, and making informed decisions that align with the organization's mission.

   
   

   In this leadership style, the leaders must take the lead, guiding all team leaders to work in cohesion. This leader holds responsibility in leading the company like a general leading an army.

   
   

   This style is particularly useful in fast-paced industries where adaptability and foresight are crucial for success.

   
   

4. Transformational Leadership -

   
   

   Transformational leaders inspire and motivate their teams by creating a compelling vision for the future and fostering an environment of innovation and change.

   
   

   They prioritize personal development and empowerment, encouraging team members to exceed their own expectations.

   
   

   For example, leaders in the insurance industry or a sales leader leading a team of sales agents will motivate, train, and transform the sales agents to sell more and more.

   
   

   This style of leadership approach is suitable when leading a new team or an underperforming team only. When the team has already reached its peak performance, this method will not work anymore.

   
   

5. Transactional Leadership -

   
   

   This style is based on a system of rewards and punishments, focusing on maintaining the status quo and achieving short-term objectives.

   
   

   Transactional leaders set clear expectations and provide feedback based on performance outcomes.

   
   

   Some leaders use the transactional leadership style to instill discipline and drive performance. Fear for those who do not perform, big rewards for those who excel in achieving company goals.

   
   

   While this approach can drive results in structured environments, it may stifle creativity and limit team members' potential for growth if overused.

   
   

6. Delegative Leadership -

   
   

   This style involves delegating authority and responsibility to team members, allowing them to make decisions and take ownership of their work.

   
   

   While this can empower employees, it requires a leader to trust their team and provide support when necessary. It's most effective when team members are experienced and capable of handling their responsibilities independently.

   
   

   

   
   

7. Coaching Leadership -

   
   

   Coaching leaders focus on developing their team members' skills and abilities through mentorship and guidance.

   
   

   They invest time in understanding individual strengths and weaknesses, providing personalized feedback and support.

   
   

   Team members must be cooperative and willing to be coached. The leaders must be approachable and extend support.

   
   

   This leadership style is particularly beneficial in environments that prioritize professional development and continuous improvement, such as in healthcare or sales training.

   
   

8. Charismatic Leadership -

   
   

   Charismatic leaders possess a magnetic personality that inspires and captivates their followers. They often communicate a strong vision and can rally their team around shared goals.

   
   

   While this style can lead to high levels of enthusiasm and loyalty, it can also create challenges if the leader becomes overly reliant on their personal charm rather than fostering a sustainable organizational culture.

   
   

   The team members require motivation and encouragement to perform well in their roles.

   
   

   Their performance heavily relies on the charismatic leader.

   Over time, the charismatic leader might lose their appeal, and it may no longer be effective.

What is the best leadership style to use?

Effective leadership requires choosing the right style, a decision crucial across all industries, including business, healthcare, sales, and management.

Leadership styles—democratic, charismatic, coaching, transformational, transactional, or strategic—each offer unique advantages and can greatly impact a team's or organization's success.

The optimal choice depends on several key factors.

1. Your personality

   
   

   Your personality plays a pivotal role in determining which leadership style you are most comfortable with and likely to excel at.

   
   

   For instance, individuals who are naturally outgoing and persuasive may gravitate towards a charismatic leadership style, inspiring and motivating their teams through their vision and enthusiasm.

   
   

   Conversely, those who are more analytical and methodical might find themselves leaning towards a transactional style, focusing on structured processes and clear expectations.

   
   

   Understanding your own personality traits can help you identify the leadership approach that aligns best with your natural tendencies, thereby enhancing your effectiveness as a leader.

   
   

2. Your type and level of expertise

   
   

   The depth and breadth of your expertise in your particular field also significantly influence your leadership style.

   
   

   A leader with extensive experience and specialized knowledge may adopt a coaching style, guiding team members through their professional development and sharing valuable insights.

   
   

   On the other hand, a leader who is relatively new to a field might adopt a more democratic approach, seeking input and collaboration from team members to foster a learning environment.

   
   

   Your expertise not only shapes how you lead but also affects how your team perceives your authority and credibility, which can impact the overall dynamics of the group.

   
   

3. The market situation

   
   

   The current market situation is another crucial factor that can dictate the most appropriate leadership style.

   
   

   In times of rapid change or crisis, a transformational leadership style may be necessary to inspire and mobilize teams towards a common goal, fostering innovation and adaptability.

   
   

   Conversely, in a stable market environment, a more transactional approach may suffice, focusing on efficiency, productivity, and meeting established performance metrics. By staying attuned to market trends and shifts, leaders can adapt their style to meet the demands of the situation effectively.

   
   

4. The organisation structure

   
   

   The structure of the organization itself also plays a significant role in shaping the leadership style that will be most effective. In a hierarchical organization, a more directive approach may be required, where clear lines of authority and decision-making processes are established.

   
   

   In contrast, a flat organization may benefit from a democratic or coaching style, emphasizing collaboration and shared decision-making among team members.

   
   

   Understanding the organizational culture and structure is essential for leaders to choose a style that not only aligns with their personal strengths but also resonates with the team's dynamics and the organization's goals.

The Art Of War in Leadership

State leaders and military commanders in ancient China have been experimenting with all types of leadership styles to rule their kingdom.

1. Laissez-Faire Leadership - In Chinese philosophy, it is called "Wu Wei" or hands off approach. It is the philosophical approach to Taoism.

   
   

   This was practiced more than 3,000 years ago during the Zhou Dynasty. In the vast land of ancient China, each feudal lord (family member and loyal servant) was given the land to rule by their emperor.

   
   

   Feudal lords only need to pay some tribute in taxes, and military support to the Emperor. This is part of what we call feudalism.

   
   

2. Transactional Leadership - Emperor Qin Shi Huang, who unified China, is renowned for his terracotta warriors and the Great Wall of China, employed this leadership style to govern.

   
   

   This approach, known as Legalism, involved harsh punishment for disobedience and substantial rewards for those who pleased the Emperor.

   
   

3. Strategic Leadership - Employed by Sun Tzu, the author of the Art of War. He never experienced defeat in his military career.

   
   

   This leadership style is highly effective and adaptable, applicable to warfare, business, management, and all industries. Sun Tzu often integrates various leadership styles to address specific situations.

Today we live in a very fast paced world. To keep up to the trend and defend yourself from the competition, you must have a strategy to lead your company.

A leader needs to adjust their leadership style to win in a fast-paced environment.

Your answer is found in the Art Of War.

In The Art Of War, Sun Tzu says,

To fight and conquer in all your battles is not supreme excellence; Supreme excellence is to subdue the enemy without fighting.

Fighting and conquering takes a lot of hard work, energy, and resources. There are better ways to win your battle. 

MrArtOfWar.com teaches you the strategy to win in life, career, and business.