Do You Know What Sort of Leader You Are?

“A leader is one who knows the way, goes the way and shows the way” - John C.Maxwell

The challenges of running a successful scale up organization against a backdrop of increasing competition, escalating cost pressures, a shortage of top talent and a demanding workforce undoubtedly mean that today’s leaders need to have not just the commercial and strategic skills but also the “right” leadership skills to fully realise their growth plans.

In this article we explore the 6 different Leadership styles which can shape a successful business and with a view to giving you the opportunity to reflect and decide just how competent a leader you really are and where you may feel the need to adapt your approach to maximise your impact.

The Autocratic

One of the most radical leadership styles is that of the Autocrat where the leader adopts ultimate power across the business. Every decision is directed to the leader and built on the perception that their subordinates will strictly follow them. This form of leadership is only effective to a certain size and scale and beyond that can be the catalyst of much conflict, micromanagement and friction and a major bottle neck to decision making across the business. It can be a helpful approach during stressful and last-minute circumstances. However, it can prevent creativity and innovation from occurring Therefore, it is not a recommended style for growth, instead we suggest changing mindset and strategy to amplify the success of a business with a less restrictive environment, building trust and reporting to allow you to let go without abdication. Autocratic leaders need to listen to their employees and be open to their ideas to cultivate success.

Famous autocratic leaders include Napoleon Bonaparte, King Henry III, and Queen Elizabeth I.

The Democratic

The Counterpart to the autocratic leader is the Democratic Leader - you are seen as the voice of many as well as your own and you look to collaborate across the business to reach consensus. This makes you efficient at engaging the people and stakeholders within your business, organization, to facilitate ideas and information before arriving at a final decision and can make you an established leader. We often see Democratic Leaders beyond a corporate setting too, for example Nelson Mandela was a democratic leader, making waves in the political space. Democratic Leaders can be one of the drivers towards a successful business which is what we look for when scaling a business but be careful that consensus isn’t a catalyst for indecision particularly in a fast moving organisation.

The Charismatic

Charisma is the “ideal” and “stereotypical” quality of the modern leader, adopting a magnetic personality that builds a passionate community and strong business network. Charismatic leaders shape their business around their self-image and how others perceive them which influences the company culture. As charismatic leaders you can often be seen as masters of expressive communication and persuasion that drive business changes, motivating people to follow you and the company’s vision. Whilst this can be hugely beneficial in start-ups and purpose led businesses be careful that the business doesn’t become solely about the leader and not its team, products or services.

Charismatic leaders are sometimes referred to as transformational leaders because they are persuasive, charming, and driven by commitment to their company or cause. However, charismatic leadership differs from transformational leadership in a couple of ways. While both leadership styles aim to motivate employees and bring out their best, charismatic leadership is mainly concerned with working in the status quo, or by the set guidelines with little change. The focus of transformational leadership is to create change, innovate, and improve the future of employees and the organization through motivation and persuasion. Transformational leaders typically allow for more independence, creativity, and freedom with decision making, whereas charismatic leaders promote an environment of devotion, action, and problem-solving through established standards. Charisma is heavily involved in both leadership styles and they are each popular ways to manage a team of employees.

Barack Obama is arguably a good and widely recognised example of a charismatic leader!

The Transactional

Transactional leaders tend to follow a systematic approach of giving and receiving, championing the reward & penalty structure. Favouring employees that are productive and effective at their roles in the business can be an effective method of leading your workforce. However, although it can motivate employees to be more productive, the highly directive nature of the transactional leader can also stifle and hinder creativity, limiting innovation and growth of a business and the personal fulfilment of your employees. Transactional leadership if often associated with traditional leaders and can therefore be ‘late adopters’ to trends and changes within the market. We often find business owners and entrepreneurs struggle with the changes needed in leadership style. The diagram below illustrates some of the pros and cons associated with this approach

Laissez-fair

A French term defined as ‘to let it be’ is exactly what it means - leaders that ‘let it be’. Leaders that adopt a laissez-faire lifestyle build an autonomous system around their business so that their involvement in decision-making and work processes is limited.

A leader that creates leaders.

Laissez-faire leaders are a reflection of their employees and cultivate a community of experts in their field that can independently drive the business forward, aligned to an overall business strategy. Warren Buffet is a primary example of a leader that takes on a very ‘hands-off’ approach and is the polar opposite to micromanaging, allowing his people to create, plan and build what works for them internally. Whilst proven effective, this approach is not as ideal to scale a business quickly unless there is total clarity in the direction of travel and the overall business strategy.

Transformational

We often see famous leaders of big monopoly companies as “transformational” from Mark Zuckerburg to Elon Musk - aggressive with their goals and although demanding are also drivers

of the personal potential of individuals within their business. Microsoft’s current CEO, Satya Nadella is a famous example of a transformational leader, very different to Bill Gates who led with an autocratic style of leading. Nadella successfully pursued an environment which is intellectually stimulating and advocates the growth mindset for all employees, far from the cut-throat nature established by Bill Gates. The strength of a vision is what transformational leaders build the foundations of their business on.

“Be passionate and bold. Always keep learning. You stop doing useful things when you stop learning” - Satya Nadella, CEO of Microsoft

As you can see from the various types of leadership styles, no leader is ‘perfect’ and our styles of leading can be fluid, sometimes needing to change as we continue on our entrepreneurial business journey. However, as leaders we all have one goal in mind, which is to scale our business, efficiently and by changing our internal mindset and strategies we can establish a business network that is a reflection of our own personal growth. You can read more on agile leadership and how driving change is about being the change here: Who is really on the bus in your business?

So what type of leader are you and does your leadership style fit with the goals and culture you want for your business? If you would like to work on your leadership style and approach The Entrepreneur’s Centre is a great place to hang out and share your thoughts and experiences with peers who are facing similar challenges as part of their business growth journey!