There is an undeniable pull toward someone in a leadership position. When they walk into a room, the entire space fills with this charismatic energy and authoritative stance that draws your attention.
However, not all leaders are created equal. What works for a Fortune 100 CEO is completely different from the leadership style of someone coaching a kid’s T-ball team. Moreover, the longer a leader remains with a group of employees, partners, or other clients, the more their style adapts to the business environment—tailored to the unique needs of whom they serve.
In my role as a Prosperity Coach, Financial Career Coach, and Leadership Mentor, I have encountered a wide range of leadership styles. Some are a little rough around the edges and require fine-tuning to be effective. Others practically inspire successful leadership in the people whom they serve. Finding the right leadership style for your unique journey is crucial to your career and personal life.
What is a Leadership Style?
The leadership style you develop refers to how you direct, motivate, guide, and manage the people you are responsible for. This could be a team of professionals, one to two employees, or a group of executives.
The way you conduct yourself in this environment, especially in the financial industry, directly relates to your style of decision-making and strategic thinking. Your style could reflect your personal values, personality, or the specific demands of the organization you are representing.
Most leaders will express a variety of styles during an appointment, but there is always one that sticks out a little more than the rest and is easy to identify. This is even clearer whenever a leader must address the well-being of a team. Then, the style comes out on full display.
Why Identify How You Lead?
When you understand your leadership style in any given business environment, you have more knowledge about the “why” and “how” of your decision-making. Put another way, you can get down to the root cause of what motivates you to implement a new idea or strategy.
Your style will dictate how your subordinates view and interact with you. If they feel stifled, as in you are not aware or interested in what they have to say, then you cannot get the feedback needed to make better decisions and improve the organization’s overall mission.
Most importantly, knowing your leadership style will help you identify your strengths, weaknesses, and where to improve. You’ll have a better viewpoint of what needs attention or development, so you get more valuable feedback to consistently improve over time.
6 Most Common Types of Leadership Styles
There are a number of different leadership styles based on the information you are reading. Even a quick Google search will generate all kinds of responses with anywhere from 3-23 (yes, I saw a report with that many) different types of styles. I’m going to focus on the ones that seem to crop up the most in my coaching and professional interactions.
#1 – Transformational Leadership
Another good word for a transformational leadership style is “visionary.” These are the driving forces behind positive change in the business environment. They often seek to inspire the people underneath them by focusing on the untapped potential that can be “transformed” into new assets for growth and development.
You’ll find many organizations like Starbucks or Amazon transforming from smaller teams to multinational organizations with recognizable brand identities that convey immediate emotional responses from customers.
Common Traits:
- Focused on the future and how they can inspire change to reach lofty goals.
- Comfortable with the idea of change and a more adaptable organization.
- Love to lift individuals up by allowing their strengths and abilities to grow.
#2 – Delegative Leadership
While many leaders like to get “down and dirty” with a team’s operations, a delegator is more “hands-off.” They focus on delegating tasks to key team members so all operations are smooth but not necessarily micromanaged. A team led by a delegator has a lot of trust and active feedback. However, it does require team members to be extremely capable in their roles. Otherwise, nothing ever gets accomplished.
Delegators also take a little longer to get the ball rolling. Unless there is a successful system already in place, they will develop some form of structure so that future task allocation is much smoother. Warren Buffet and Richard Branson of Virgin Group are excellent examples of delegators.
Common Traits:
- They trust and empower different team members to adapt and complete tasks.
- Prefer autonomy from the organization so all roles are clearly outlined.
- Love to create clean communication lines throughout an organization with identifiable structure.
#3 – Authoritative Leadership
Moving right along to our third leadership style we have another “visionary” form of taking the reins. Here, the leader is so well versed in the activities of the organization or develops a firm, clear picture of where they are headed that others are more than capable of following. In many cases, team members feel encouraged and supported to step in line and march alongside or behind an authoritative leader.
This leader will spend a lot of time getting to know each individual team member. This way, they can offer better advice about helping them succeed and grow as they contribute to the overall clear mission. Bill Gates, Steve Jobs, and Anna Wintour of Vogue are all excellent examples of authoritative leaders.
Common Traits:
- Tend to be the opposite of delegative in that they are extremely hands-on, often courting with the line of micromanaging.
- They can inspire, motivate, and influence their team in a way others cannot.
- They understand strategic goals others may have missed and know how to communicate those new goals in highly effective ways.
#4 – Transactional Leadership
If you are more acclimatized to managers than leaders, you’ll probably be familiar with transactional leadership styles. These styles rely heavily on structure, rewards, and punishments. Clear goals are set for the different tasks everyone must achieve, and then rewards or punishments are determined by how well they succeed.
There is a clear give-and-take in transactional leadership. As long as everyone follows the established routines and procedures to achieve efficient productivity, no issues are ever brought up. You’ll often find unique incentives at the core of this style, like a financial bonus, extra vacation days, or something similar. Think of coaches like Vince Lombardi as transactional.
Common Traits:
- Extremely clear rewards and punishments for task completion.
- Tend to communicate clear and precise expectations for everyone involved, including themselves.
- Rely heavily on the individual members to do their role and love developing a structure.
#5 – Participative Leadership
You’ll hear these leaders referred to as democratic. This is because they listen to all employees’ voices and actively involve the “whole” in various decision-making processes. The goal is to be highly inclusive while communicating the organization’s needs so everyone feels a sense of shared responsibility.
The struggle with modern participative leaders is the breakdown of the traditional workspace. The more we move to hybrid and at-home working models, the less involved these leaders feel. That is why you’re seeing an uptick in online socializing to build a culture that can then be directed and leveraged by such leaders as Bob Iger of Disney or Jim Lentz of Toyota.
Common Traits:
- Want to feel “part of the team” and work hard to include everyone.
- Great at problem-solving in a collaborative setting.
- Highly flexible to the team’s unique needs while adapting the mission to fit the tools at hand.
#6 – Servant Leadership
The final leadership style I want to mention relies on putting the needs of the group before that of the leader. It is serving those around you by building solid relationships so everyone can reach their peak performance and goals.
This leadership style involves a lot of ethical decision-making. It naturally cultivates a state of creativity and problem-solving because everyone feels empowered to suggest ideas and solutions other teams may have never considered. Good examples of servant leadership include Tony Hsieh of Zappos and Ken Blanchard.
Common Traits:
- Lead by serving the needs of the organization without sacrificing the macro goals.
- Cultivates strong communication due to active listening of all parties involved.
- This leadership style creates a great sense of loyalty and trust in organizations.
Final Thoughts
Your leadership style will significantly influence your concept of an ideal workspace. Your previous history with leaders and mentors also plays a key role.
Finding which style works best for your unique persona will require a bit of trial and error. You’ll learn quickly what feels suitable for your team and then adapt until you develop a strong personalized style.
A lot of my work as a financial career and business coach is helping people unlock their potential in leadership positions. I enjoy finding out which of these styles best describe my clients and would be happy to engage with you.
Book a session today, and let’s discuss how you can test out new styles and where you may naturally fall on this spectrum. You can gain a wealth of understanding about how to grow your team by first looking at the style that drives you forward.
