Effective leadership is crucial for the growth of any business and will help to create a positive culture and working environment for your employees.
A great leader inspires and motivates their employees, ensuring that everyone is working towards a common goal. By developing your skills and knowing which leadership styles to use, you can boost employee engagement and strengthen company culture, ultimately leading to business growth and customer satisfaction.
What are the different types of leadership styles in business management?
There are many leadership styles in business management that leaders can take when running a business, and these styles can have a range of different results. Daniel Goleman advises switching between leadership styles depending on the situation. As he writes in his 2000 article:
“The most effective leaders switch flexibly among the leadership styles as needed…[They] don’t mechanically match their style to fit a checklist of situations — they are far more fluid. They are exquisitely sensitive to the impact they are having on others and seamlessly adjust their style to get the best results.”
Goleman’s research on effective leadership is highly acclaimed, highlighting six leadership styles which leaders can adapt to:
Affiliative leadership style
This style of business management involves building strong emotional bonds, encouraging collaboration, and prioritising team wellbeing.. This allows teams to share ideas freely and work together towards the goals of the business. It can help to build a positive working environment, where staff are treated as humans with personal relationships as opposed to just employees. However, it’s important to not over-rely on this style alone, as it may lead to a lack of constructive criticism and reduced accountability.
Authoritative leadership style
This leadership style in business management involves motivating team members by tying their work to the overall strategy of the organisation, helping employees to understand their tasks and how they contribute to business goals. When employees understand their role in contributing to the success of the business, this can lead to high employee satisfaction.
Coaching leadership style
This style of business management is focused on the growth of your employees, where leaders take an active interest in the development of staff on a personal and professional level. By asking questions and offering them opportunities to improve, your employees will feel motivated to improve their skills while valuing the company for helping to develop them.
Coercive leadership style
This leadership style in business management is considered a more ‘authoritarian’ style of leadership, where leaders are demanding and expect their demands to be delivered. This style can have an adverse effect on staff turnover and a negative working culture as employees can feel disillusioned.
Democratic leadership style
This style of business management allows your employees to get involved in decisions within their team. Leaders will absorb feedback and opinions of all team members before coming to a decision. This can lead to staff feeling more valued as they are given additional responsibilities and are provided a voice on the direction of tasks.
Pacesetting leadership style
This leadership style in business management involves holding your employees to high standards, while pushing them to increase productivity to meet targets. This can be a negative style if you focus too much on their failures and can lead to a pressurised culture, where staff feel dissatisfied as the pressure can have an adverse effect on their mental wellbeing.
How can you become an effective leader?
An effective leader is able to adjust their style of business management to get individuals aligned and moving in the same direction toward a desired outcome by maximising the strengths of your staff. Effective leaders enable their workforce to reach their potential, resulting in increased productivity and job satisfaction.
You can become a more effective leader by:
Developing and investing in your team
Team development is a great way of increasing the skills of your staff. By investing in staff development, you are providing them an opportunity to grow professionally. This will allow them to maximise their capabilities and overall performance while feeling valued that the company is investing in them.
Don’t be afraid of failure, embrace it instead
All great leaders have had setbacks in their lives, and they have not let failure define them. It’s important to acknowledge any setbacks and discuss how you can grow from it as a team. This will create a culture of continuous development, eliminating a culture of fear within the organisation.
Listen to the needs of your staff with empathy
Employees like to feel like their voice matters. This can be in regard to an upcoming project, or whether they are having any personal issues. As a leader, it is important to let your staff know that your door is open whenever necessary.
When team members feel listened to, they are more likely to be committed to their work and will be motivated to contribute their best for the success of the business. This leads to increased work output, higher job satisfaction, and a more positive workplace environment.
Lead by example
When leaders display the behaviours they desire from their team, this rubs off and motivates their employees to follow their lead. By setting a high standard of professionalism and dedication to your work, this establishes the tone for the whole organisation.
Recognise the successes of your staff
When staff contribute their best efforts to a project, it’s important to let them know that you value and appreciate them. You can do this in team meetings or a low-key chat - depending on the individual. This can help boost the morale of your employees, and it will motivate them to continue delivering a high level of output to earn further recognition.
How do you overcome challenges through effective leadership?
Ease the burden through shared responsibilities
Being able to delegate tasks effectively can have a big impact on the success of a business. If you don’t trust your employees to carry out their responsibilities, they will be demotivated due to this lack of trust - leading to a negative working environment.
An effective leader has faith in their employees to carry out their responsibilities, whilst being available to oversee tasks if any issues arise. It would be wise to set up regular meetings to ensure all targets are being met while having confidence in your employees to take the initiative in projects.
Establish processes to avoid decision fatigue
When you make numerous decisions every day, this can lead to ‘decision fatigue’. This is where your mind struggles to cope with the sheer number of decisions you have to make, which causes you to become exhausted and overwhelmed.
By setting up a streamlined process, you are delegating smaller decisions to your employees of trust, leaving you to focus on the key decisions which will have an impact on the whole organisation
Promote a healthy work-life balance across the organisation to reduce workplace stress
Employee mental health is an integral part of workplace morale. At times, staff may feel stressed or suffer from burnout from various aspects of their personal and professional lives. This can contribute to a less productive and engaged workforce and a negative work culture.
As an effective leader, you can help employees by promoting a culture that values wellbeing. Recognising employees as human beings can go a long way to building a positive culture. You can achieve this by encouraging regular breaks or ensuring everyone uses their holiday entitlement to recharge, while providing resources for employees if they’re struggling.
Balancing the needs of the business with compassion for your staff
There may be a point where you will have to make difficult decisions which could affect the morale of your employees. This can include making staff redundant or cutting budgets to certain departments, which can have a significant knock-on effect to the culture.
Displaying empathy in these situations goes a long way to demonstrating effective leadership. By being transparent and communicating openly with your team, you will gain respect from your employees - especially if you have considered their needs when coming to a final decision.
Where can I go if I am looking to grow a business?
If you’re looking to grow your business, you can benefit from Business Wales’ mentoring programme for business owners who want support from an experienced businessperson.
Moreover, Development Bank provides bespoke loans and equity packages designed to boost your business and accelerate your growth. You can find out all about debt and equity finance here.
You can check to see if your business is eligible here.
