Leadership may be an intangible part of a company, but it’s crucial for creating a positive environment. With strong business leadership qualities, employees feel motivated and supported. This leads to seamless succession planning and greater overall success for the company.
Strong leadership styles are also crucial for creating change. In our current political and social climate, businesses have had to quickly adapt to new work and communication styles. They’ve been urged to take a long hard look at where they stand on equality, diversity and inclusivity. It’s strong leaders, who can admit weak points and strive to better themselves, their teams and their companies, that are most valuable.
But what is business leadership exactly? How do you foster leadership within a company? And how can you determine the most effective business leadership style for your team and company at large? We’ll answer these questions and provide guidance for understanding and choosing between the many effective styles of business leadership.
What is business leadership?
The concept of business leadership has evolved dramatically over the last 50 years. Gone is the belief that leadership is an exercise of power and coercion. Business leadership is essential to achieving a unified goal, through the direction of team members. A successful leader is one who can understand each team member’s motivations and inspire them to work towards a larger goal. A great leader will also give their team members opportunities to step outside of their roles to learn, grow and become leaders in their own right.
Why is leadership important in business?
Without strong leaders, businesses suffer. The right leadership styles ensure projects are finished in a manner up to the company’s standards, help with employee satisfaction and retention and ensure the right people are put in positions to help move the business forward. With the right leadership, companies can make informed decisions that will have meaningful impacts on short- and long-term visions. With poor leaders, companies face more challenges that can go so far as to impact their profitability.
Leadership vs. management styles
The difference between leaders and managers might seem subtle, but in business, there is a clear distinction. Leaders are individuals within a company who create value, rather than count it, and focus on establishing influence, rather than power. The outcomes of leadership vs. management are not necessarily mutually exclusive. Ultimately, a leader is someone focused on growth, while a manager is mainly concerned with ensuring tasks and goals are met.
What are the most effective business leadership styles?
There are seven prominent types of leadership, and discovering which suits you, your team and your company is an ongoing process. Knowing the seven leadership styles will give you a strong jumping-off point to define which one most aligns with your values and work style.
1. Autocratic Leadership Style
The autocratic style of business leadership can be summed up in a single phrase, “Do as I say.” An autocratic leader believes they’re the sole decision maker, and that they are in a position to command others.
This style of leadership is pretty passé and is unlikely to get a leader far in today’s workplace. There are moments in business when aspects of the autocratic style might come in handy though. For instance, when quick decisions need to be made, and a leader has the experience to make it, they might do so without opening it up for discussion. It also might be necessary to act as the sole decision maker if team members are new and inexperienced. Even so, a good leader will share their decisions with the team and provide an explanation for why a decision was made. This is an opportunity to educate team members and demonstrate how and why a specific decision was made.
2. Authoritative Leadership Style
The authoritative style is grounded in the “follow me” approach. This is where a leader will guide a team through a project, share a “map” for the journey, set expectations, and encourage engagement. To be a successful authoritative leader, a good deal of confidence is required in order to comfortably prepare a team for what to expect, anticipate roadblocks, and share problem-solving techniques.
3. Pacesetting Leadership Style
The pacesetting leader is highly focused on achieving goals in a (super) timely manner. They’re of the “do as I do!” mindset. Pacesetting leaders drive projects forward without making time to check in on whether team members still have their sights on the finish line, too. While the pacesetting style may not be ideal for every team, if a leader knows their team members well enough, it can be highly successful. For startups, or periods of time with competing projects and deadlines, the pacesetting approach to leadership can ensure everything gets ticked off the to-do list.
4. Democratic Leadership Style
A democratic leadership style is grounded in communication. Instead of barking commands, a democratic leader will ask, “What do you think?” and will continually provide updates on timing and responsibilities for team members.
The goal here is to give and gain feedback at every point of decision-making. This is done in the hopes of fostering creativity, cooperation and growth for everyone on the team. It might not be the fastest approach to projects, and it requires a leader who is patient and open to the thoughts of others.
5. Coaching Leadership Style
A leader who takes on a coaching leadership style believes they have a responsibility to educate and develop their team. They see people as “a reservoir of talent” in need of fostering and guidance. A coaching leader is very invested in each team member and makes time to listen to their concerns and provide direction when needed.
6. Affiliative Leadership Style
When it comes to the affiliative leadership style, the phrase, “people come first” governs thinking and decision-making. This leader is heavily invested in the emotional wellbeing of team members and takes time to get to know everyone. Communication and collaboration are at the core of this approach.
While this approach might feel stifling to some, having a deep understanding of everyone’s emotional needs can make for a leader who’s highly responsive to each team member. They can anticipate points of friction and provide customized leadership to truly motivate and satisfy their team members.
7. Laissez-Faire Style
The laissez-faire leadership style resides on the opposite end of the spectrum from the autocratic style. This style is truly hands-off. While in some respects it might demonstrate a deep level of trust in a leader’s team, it can also signify a leader who’s checked out and is uninvested. If you think your team might benefit from a leader who’s a bit more hands-off, test the waters by handing off smaller projects that won’t impact the bigger business. Gradually, you can increase to greater, more meaningful projects and tasks as you establish deep levels of trust.
How to be a better business leader
The steps to becoming a strong business leader require a high level of EQ. You must know your strengths and weaknesses, as well as your team members’. And you must be able to reflect on that with a healthy dose of humility. Knowing the leadership skills you’re lacking, and where you need improvement, is even more important than knowing the skills you do have in your arsenal.
How to improve leadership skills in 3 steps
1. Know yourself
First, you need to know yourself, and what leadership style your natural characteristics lend themselves to. But that’s not to say you can’t learn, evolve and adapt to new styles (you might very well need to). It just means knowing the traits you’re already strong on and what areas you might need to further develop.
2. Know your team
You also need a strong sense of who your team members are and what leadership style they’ll best respond to. If you have a group of junior staff with little knowledge of the business, the laissez-faire style could have disastrous consequences. But with an encouraging, coaching style of leadership, your team members could become the rising stars of the company.
3. Know your company
Lastly, your company’s culture should be a consideration. How you choose to lead your team should reflect the wider mindset of the organization. If your company prides itself on being truly democratic and inclusive, and you’re governing your team like a dictator, everyone will see the disconnect.
Ultimately, no one wakes up as a great leader. It requires skills that need continuous development. With each new team member, project and position, you’ll be exposed to new problems to solve, new challenges to overcome, and new people to understand. And with each new situation that arises, you’ll either draw on past experiences or learn new leadership skills to approach each hurdle.
What are business leadership qualities?
No matter your business leadership style, there are certain traits that lend themselves well to leadership. No one possesses every quality, but many can be honed over the years. Having an awareness of each, and the value they can bring, will make you more likely to draw on them. You can’t snap a finger and develop a strong sense of empathy, but with conscious practice and concerted efforts, you can bring these traits to the table as you navigate the tricky waters of leadership.
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Resilience: When Facebook COO Sheryl Sandberg popularized the term “lean in” as it relates to gender bias in the workplace, she was really referring to the importance of being a resilient leader. Resiliency is an ideal leadership quality during times of crisis and change, when maintaining focus on an end goal is critical. A resilient leader won’t be discouraged by obstacles, or buckle under pressure. Resiliency allows a leader to weather any storm.
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Transparency: A leader who values and practices transparency with their team will build trust and integrity more easily. One of employees’ most common complaints is that there’s a lack of communication when it comes to how and why company decisions are being made. Oftentimes, employees are more understanding, even when a decision isn’t ideal, so long as they understand the reasoning behind it. Transparency is all about leaders who communicate clearly and regularly with their team.
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Emotional Intelligence (EQ): Having a highly evolved EQ will give a leader greater insight into the lives and emotions of their team members. Larissa Chaikowsky, COO at BMO Financial Group, believes one of the greatest keys to success as a leader is knowing how to balance confidence and humility, something that requires a highly evolved EQ: “Confidence is always highly praised in leaders, but humility is just as valuable. It’s important for a leader to know where they excel, and where they lack experience. Owning up to that allows a leader to find support from the right people, and will show other team members it’s okay not to have all the answers.”
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Passion: Passion really comes down to the level of interest a leader brings to their team, projects and company. If a leader lacks passion for what they’re working on, they won’t put in the extra hours, or do the extra research, to really understand something and come up with the best solution. Without passion and investment in the business, a leader will lack motivation and the ability to spearhead their team and projects. With passion, a leader will be able to dictate a vision for their team and drum up excitement, because, quite simply, they care.
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Empathy: It’s important for team members to feel heard and respected when they voice concerns or problems. A good leader will listen attentively and put themselves in the shoes of their report to gain a deeper understanding and a new perspective on the problem at hand. Joanna Track, Vice President and Executive Publisher Media Platform & Content at Venturepark Voice, believes listening is the most effective quality in a leader, “The best leaders are those that listen and then speak. Employees need to feel heard, regardless of whether you agree with them. And the same goes for employees. There is always something to be learned, so listening and gleaning insights from those who’ve been down the road before you will be invaluable to your career growth.”
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Empowerment: A strong leader needs to have a solid sense of empowerment, otherwise they could lack the confidence to take ownership and have accountability. But understanding the importance of empowerment doesn’t end with the leader. Seeing opportunities to empower others is something a leader should always be on the lookout for. This is something that distinguishes leaders from managers.
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Open-minded: Maintaining an open mind is an essential component of being a thoughtful leader. It’s easy to get caught up in the “this is the way it is” mentality. Being open-minded allows for change, and if we’ve learned anything in the past year, it’s that change is essential for growth.
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Patience: Patience in all situations is truly a virtue that serves leaders well. It’s a challenging one to cultivate, but it’s appreciated by team members and does wonders for maintaining composure. Being able to take a moment and think calmly before making big decisions comes down to having patience. It’s also handy when teaching new skills to a team. A patient leader will stay calm and cool, even if it takes employees a few tries to get it right.
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Diplomacy: Being a leader often means finding yourself in the middle of problems and disagreements. By keeping a friendly but professional level of diplomacy, you can maintain positive relationships with all parties involved. Diplomacy should not be mistaken for neutrality, decisions must be made and a good leader knows that. But a diplomatic leader will make those decisions in a way where all parties feel heard and respected.
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Initiative for action: Oftentimes in business, the hardest part of the job is just making a decision. A good leader recognizes this and strives to make calls to keep the business moving forward. Even more challenging is making changes that rock the status quo, but this is essential for growth. As we’ve seen in 2020, companies began the long overdue process of evaluating the racial discrimination within their corporate culture. The best leaders demanded this and will continue the process of improving working conditions for every employee.
The Best in Business Leadership
Leadership isn’t a title you achieve and list on your resume. It’s continually cultivated, with each new role, each new team member, and each new project. As a leader, you’ll find that you draw on different qualities at different times throughout your career. And that includes experiences you might have had as a direct report. Leaders never stop learning and seizing opportunities to gain new and valuable experiences; this is how leaders define their leadership style, and become the best in the business.
Sources
https://hbr.org/2004/01/understanding-leadership
https://hbr.org/tests-of-a-leadership-transition
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