Being a leader is no easy feat. Employees need stronger connections than ever, but driving productivity is a must. Artificial Intelligence is looming, and the future of workers is being questioned. Leaders are asked to build strong relationships while making strategic decisions. It’s a lot to balance. We have brought an expert onboard to guide us through the leadership world and share valuable insights.
Therese Lardner is founder and Leadership and Sustainable Performance Coach at Mindset Coaching and Consulting. With a strong background in Psychology, Therese spends her day working with HR and Organisational Development executives. She is passionate about helping their teams reach their full potential. To Therese, the biggest challenge for leaders in the future is establishing real, human connection.
“As the drive for productivity and efficiency gets stronger through technology and organisational restructures, the biggest challenge for leaders will be to not lose sight of the fact that their 'FTE', 'headcount' and 'users' are in fact, humans. A real human connection needs to stay at the forefront so that we're not breaking people in the process of getting to 'better'.”
With that in mind, we delved into the four common leadership types. See below for our must-read guide on leadership styles.
What is Transformational Leadership?
“Punishing honest mistakes stifles creativity. I want people moving and shaking the earth, and they are going to make mistakes.”
- Ross Perot
Ross Perot is a business mogul, former politician, and famous transformational leader. Politics aside, Perot exemplified this style for the way he motivated his team. He had a clear vision for his company and inspired his staff to reach their full potential. Perot's approach is what transformational leadership's all about.
Qualities of Transformational Leadership
You probably have a transformational leader in your life. They never say no to a challenge and make everyone feel at ease. They inspire their team, with a clear goal to improve their organisation. Professor Peter Northouse of Western Michigan University defines transformational leadership as:
“The process whereby a person engages with others and creates a connection that raises the level of motivation and morality in both the leader and the follower.”
Originally coined in the ‘70s, it’s easy to see why transformational leadership remains the ‘preferred’ style among experts. They are characterised as:
- Emotionally Intelligent
- Great Communicators
Transformational Leadership Model
No one's born a leader. Thankfully, you can develop a transformational style with time. Here are the four elements of the transformational leadership model.
1. Intellectual Stimulation
Transformational Leaders encourage their staff to push boundaries. They know what their team’s capable of and promote creativity. Rather than spoon-feed, they allow followers to find solutions for new challenges.
2. Individualised Consideration
They also know that leadership isn't a 'one size fits all' approach. Instead, leaders ensure open-lines of communication. Followers feel comfortable sharing their ideas and receive direct recognition for their efforts.
3. Inspirational Motivation
Transformational leaders know what change is needed and clearly articulate their vision to their team. Their charisma inspires others to take charge and achieve what’s best for their company.
4. Idealised Influence
A transformational leader practices what they preach. If they want their followers to take their lead, they have to earn their trust and respect first.
Advantages of Transformational Leadership
- Staff retention
Transformational leaders inspire, encourage, and engage their team. Employees are given direct recognition for effort and feel valued for their unique contributions. Leaders also satisfy their followers’ needs alongside the company’s needs, ensuring corporate fit. Together, these qualities reduce staff turnover and hiring and training costs.
- Spreads Enthusiasm
When the corporate morale’s down, trust a transformational leader to add a needed boost. Creating self-motivated followers, leaders use their charisma to excite employees to achieve their full potential. The end-result creates innovation and maximises output.
- Allows for a quick formation of a vision
Transformational leaders are passionate about their work. They’re always on the lookout for the next idea and are ready to take action. Able to articulate their vision, they quickly enact change and improve bottom-line results.
Disadvantages of Transformational Leadership
- Assume employees share their motivation
Transformational leaders are passionate and confident. They often assume they’ve motivated employees to share their vision for the company. But this isn’t always the case. If the leader remains unaware of their employees’ different opinions, no changes will be made, and their vision remains unrealised.
- Poor Practical Skills
While having the best intentions, transformational leaders are often swept up in their vision. Only seeing the big picture, they ignore the smaller, administrative tasks. Even tasks necessary to achieve their goals. If they do not have an organised and detail-oriented team, they’ll lack the practical skills to execute ideas.
- Can be used unethically
“One of the downsides of transformational leadership is that a leader can be highly transformational but can be acting quite unethically at the same time.” - Therese Lardner
A transformational leader may be inspirational and have built their teams’ trust and respect. But their vision might not be based on merit, and they may use their influence to exploit their followers.
What is Servant Leadership?
According to our leadership guru, Therese Lardner, transformational remains the ‘preferred’ style for aspiring leaders. Although, she says things are changing:
“Recent research shows that servant leadership (a leader who is focused on serving first and then there is a conscious choice to lead) is a better predictor of things like performance, commitment, and trust, rather than just looking at how ‘transformational’ a leader is. I think in 5 years’ time, the tide will shift toward servant leadership as the style that most leaders aspire to.”
A leadership style ‘better’ than transformational leadership? How can that be? As Therese mentioned, servant leaders serve first, then make a conscious choice to lead.
Serving doesn’t mean leaders run around for their team and indulge every request. It means their followers’ growth and development are their highest priority. They put their team before themselves, and in some cases, their organisation. Long-term, organisations benefit from servant leaders as it creates engaged and dedicated staff.
Qualities of Servant Leadership
Servant leaders embody many positive characteristics, usually described as:
- Great communicators
What’s the difference between servant and transformational leaders?
These two styles of leadership are fairly easy to confuse. Both are based on a genuine, human connection between the leader and the follower. Both seek to encourage and inspire their followers. And both are recommended by leadership professionals. The key difference lies in the leaders’ focus.
Transformational leaders look to motivate their staff to achieve a collective, organisational vision. Servant leaders look to help their staff, making their followers’ needs their highest priority.
Here’s a simplified example explaining the difference:
An employee might go to their leader, asking if they can knock off early to take an art class.
A servant leader will ask them why, to which the employee says the art class helps relieve stress, enhances creativity, and promotes self-esteem. This art class will allow their employee to grow and develop, so their servant leader allows them to leave early.
A transformational leader, however, might not see how the class will help their company. They may reject their request as it doesn’t fit with their greater vision for the organisation.
The above is just one example of how these styles differ in their pure form. In reality, there’s a greyer area between the two, depending on the individual and situation.
Advantages of Servant Leadership
- Loyalty that creates staff retention
Other leadership styles put the company’s needs before their employees. Servant leadership works the other way. Because employees are leaders’ top priority, they feel valued and respected. They feel they’re developing their career and have work-life balance, not afforded by traditional leadership styles. This creates loyal, hardworking staff, reducing staff turnover.
- Assists Team Building
Servant leaders have a sixth sense for people. They know what makes their employees tick. Where they thrive. And what unique strengths each individual brings. Their empathy means they don’t use a ‘one size fits all’ approach, which can alienate and compare employees. The end result is a whole team being supported equally by their leader.
- The leadership style of the future
Our society is becoming more disconnected. People are craving real, human connection not afforded in their day-to-day lives. We’re now expecting more from our leaders, causing a shift towards servant leadership that focuses on genuine, human connection.
Disadvantages of Servant Leadership
- Takes a long time to see results
Servant leadership is an investment. It requires the leader to build trust with their employees. They learn what motivates them, where they want to be, and creates an environment where they thrive. The goal is to create committed employees who feel valued by the organisation. All of this takes time, with limited short-term results.
- Lack of Authority
Servant leaders develop strong relationships with their followers. They ‘share’ power, moving away from traditional, top-down management styles. But this can lead to a lack of authority. If their relationship is not built on two-way trust, employees can exploit their leaders. They see them serving their needs in an extreme way and view them as less authoritative. This becomes difficult when the business wants leaders to push for better performance from their employees.
- Doesn’t work in bureaucratic environments
Servant leaders are constantly putting their followers’ needs first. Because of this, they struggle to go by the book. Servant leadership is difficult to use in rule-bound organisations, common in larger companies.
What is Transactional Leadership?
Heard of the stick and carrot approach? This expression perfectly describes Transactional Leaders. Focused on efficiency and status-quo, leaders quite literally transact. They reward good performance and punish bad performance. While suitable in some situations, our leadership expert, Therese, believes it simplifies workplace conditions:
“Transactional is a highly task-focused, results-oriented leadership style. While this might get results in the short term, it's not sustainable. It doesn't fulfil an employee's natural human need for connection, trust, and safety.”
Qualities of Transactional Leadership
Transactional leadership values strict rules and the status-quo. This differs to servant and transformational leaders, who focus on human connection. Not ones to waste time, transactional leaders are:
Advantages of Transactional Leadership
- Achieves short-term goals and productivity
The transactional structure clearly outlines expectations to employees. Everyone has a defined role and know what’s needed. Often, this creates more productive staff in the short-term. Employees achieve goals quickly to receive rewards (whether financially or psychologically). Workers also know that they are being supervised and avoid punishment by completing tasks efficiently.
- It eliminates role confusion in the corporate hierarchy
Transactional leadership uses a clear chain of command. All members, from management to juniors, know where they fit in the corporate hierarchy. Unlike other styles that share power, employees know who to report to if they have a problem. This eliminates role confusion and employees going rogue.
Cons of Transactional Leadership
- Puts the blame on employees
Transactional leaders are not forgiving in their approach. Employees often bear the brunt of poor performance. As strict rule-followers, transactional leaders never fault the process, blaming employees instead.
- Limits Creativity
Transactional leaders love rules. They love processes. And they value results over emotion. These qualities combined mean employees aren’t inspired to think out of the box. The result is a rigid culture, with a lack of innovation as disengaged employees do not feel confident expressing new ideas.
- Not sustainable long-term
Transactional leadership doesn’t fulfil an employee’s need for connection and trust. Over time, employees become disengaged and frustrated with rigid leadership. While effective short-term, long-term transactional leadership increases staff turnover and employee absenteeism. Naturally, hiring and training costs also increase.
What is Laissez-Faire Leadership?
Laissez-Faire is French for ‘let them do’. And that’s exactly what this hands-off leadership style does. The opposite to micromanagement, leaders allow their team to make decisions among themselves. The employees set their own goals, processes, and deadlines. Often disconnected with their teams, Therese Lardner’s hesitant about Laissez-Faire:
“Laissez-Faire is a 'set and forget' style of leadership. It doesn't provide direction, vision, guidance, or support...For the vast majority of employees, this type of leadership leads to rouge employee behaviour, projects that are not delivered on time, and stagnation of skill-set development.”
Qualities of Laissez-Faire Leadership?
Laissez-Faire champions a hands-off approach. There are a few key characteristics that describe this leadership style:
- Minimal guidance from leaders
- Employees have the freedom to make their own decisions
- Leaders provide resources needed
- Teams are expected to come up with ideas and solve problems amongst themselves
- The power lies with the team members, but the leader takes full responsibility
Advantages of Laissez-Faire Leadership
- Works well for highly-skilled creatives
Steve Jobs, founder and CEO of Apple, was known as a famous Laissez-Faire Leader. You’ve probably seen this quote float around LinkedIn, or hear a colleague use it in passing:
“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people, so they can tell us what to do.”
It perfectly describes the rationale behind his leadership style. In an environment of highly-skilled creatives, employees can excel. They have the freedom and self-discipline to achieve their own goals.
Disadvantages of Laissez-Faire Leadership
- Lack of Role Awareness
Laissez-Faire expects employees to define their role, processes, and deadlines. With little guidance from their leader, employees often go rogue. They become unsure of expectations and disengage from broader business goals.
- Lack of Accountability
As teams are expected to solve problems among themselves, the leader can often blame their team for poor performance. That is, rather than take accountability their lack of direction and leadership; their team members bear the brunt.
Developing your leadership style
Every leader is different. While there are ‘preferred’ styles, it needs to be authentic and what’s best for you. But there are a few steps everyone can take to develop their leadership style.
Start with the end in mind. What’s a challenge for you? What do you wish ran smoother? More efficient and effective? Reflecting on current pain points is a way to reset and get clarity on your current leadership style.
The next step is self-reflection. Gain insights into strengths you can leverage, both from yourself and those around you. Understand what you need to work on. Then, try taking on a stretch project or working with a coach or mentor, such as Therese Lardner. These are great ways of developing strategies to grow your leadership capacity.