There are so many different theories about leadership that it can be overwhelming to know where to even begin. A quick Google search reveals that there are three main styles of leadership, or maybe that should be six, or should it be eight, or, hang on a minute, is it actually twelve? Just how many recognised styles of leadership can there be? Everyone seems to have written a book about it. Apparently Leadership Theory is big business.
Fortunately, you don’t really need to know the theory to be an excellent leader. You do though, need to recognise what your own particular style of leadership is, in order to be able to grow and improve as a leader.
“In most cases being a good boss means hiring talented people and then getting out of their way. […] Contrary to what I believed as a little girl, being the boss almost never involves marching around, waving your arms, and chanting, “I am the boss! I am the boss!” – Tina Fey
Well, now we’ve got that out of the way, let’s take just a small look at the different types of leadership styles. Don’t worry, this isn’t a deep dive into the academic theories on leadership styles, (though it is based broadly on Kurt Lewis’ Leadership Framework published in the 1930s, as that forms the basis for many of the later models). We’ll just be taking a look at three of the most recognisable styles of leadership, along with some high profile examples of leaders using those styles. See if you recognise yourself too.
Leadership Style 1: Autocratic
As you’d expect, this leadership style involves decisions being taken by the leader, with little or no discussion or consultation with the team. Where discussion does take place, the ultimate decision will still be made by the leader herself.
This style of leadership can be extremely effective when things need to happen quickly, decisions must be made fast, and the team are not expecting to be given autonomy, perhaps because they’re quite inexperienced or unskilled. It’s less effective, and can actually be destructive, when the team’s output needs to be creative, requires high levels of skill, or when the outcome can only be reached through collaboration.
The make-up and personality of the team is also key for success here; not everyone can work well under an autocratic leader and if the fit isn’t right, the team can be left feeling demoralised and disempowered. It can sometimes be the case that leaders who are insecure in their own skills can adopt an autocratic approach to hide their insecurities, but equally it is often just an indication that the leader feels she has the best solution already and doesn’t need input from the team.
One example of an autocratic leader is Lord Sugar: one of his favourite sayings on The Apprentice is ‘”It’s my way or the Highway!” (aside from “You’re fired”, of course).
Leadership Style 2: Democratic
This is the opposite of an autocratic style. A democratic leader will consult with his team over the majority of decisions, but still takes personal responsibility for making the final decision. Because of the high level of engagement and consultation, teams that are managed by a democratic leader can be highly motivated and engaged in their work and democratic leaders often have very loyal teams.
This leadership style can be well suited to creative or development and R&D work. It also suits teams that are highly experienced and skilled, where individuals want to be respected and valued for their input. Teams that are led by a democratic leader can be excellent at skills and knowledge-transfer, fostering a very strong growth and development environment.
However, this leadership style doesn’t work so well where decisions or changes need to be made quickly; the consultation and discussion can slow things down considerably.
Perhaps surprisingly, one often-quoted example of a democratic leadership style is Donald Trump when he was in business. Since becoming president, Trump seems to have moved towards an autocratic leadership style. Interestingly, changing leadership style is something that most leaders will go through at some point during their careers.
Leadership Style 3: Laissez Faire
These leaders give their team a huge amount of freedom in the work they do and how they perform it. A Laissez Faire leader will provide support in terms of advice, guidance and resources if necessary, but doesn’t get involved in directing the work. They may not even provide feedback after the work has been completed.
This approach can be very effective with a highly skilled and experienced team, who are clear on their objectives and deadlines (or are good at setting their own). However, it can be a disaster for an unskilled or insecure team. Team members who require feedback and direction can be left feeling unmotivated and directionless and if the team aren’t strong on self-motivation, projects can slip behind schedule or fail entirely.
On the other hand, if the team is made up of skilled, experienced, highly motivated self-starters, anything other than a Laissez Faire leader would stifle their drive and ambition. Warren Buffet famously takes a very Laissez Faire approach to the businesses he invests in. He recognises that the business is already being successfully run by talented individuals, so it doesn’t need any input from him in order to continue to be successful. Instead, he remains hands-off, and as Tina Fey says, “Keeps out of their way” to let them get on with it.
Leadership for Finance teams
There are, as we recognised at the beginning of this article, many other styles of leadership too, but these three form a foundation for the other forms of leadership. The most effective leaders will use a combination of styles at any one time and over the course of their leadership career. If you can recognise which of the three you use most regularly, it could be useful to consider if it’s still serving you, and your finance team, well. Does it suit your current working situation, or could it be time to try another style?
There is no single ‘right’ Leadership style to suit all finance teams – it depends on your own team’s experience and skills as much as on your personality – but it’s certainly worth taking the time to evaluate your style and check it’s still serving you well.
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