The Impact of Leadership Styles on an Organization

The Impact of Leadership Styles on an Organization

Leadership is far more than “good leadership” and “bad leadership.” If you think of an org chart, you probably picture a leader at the top, but leadership can take many forms.

Traditional notions of leadership include the person in charge, or the person who has power. But true leadership is far more than that. It goes beyond a fancy office, salary, and managing a group of people. 

Leadership is about direction, vision, and the desire to create something new. Of course, those that hold roles of power go about leadership in different ways. Some leadership styles are more effective than others. The best leaders know how to blend different styles, depending on what the situation demands. 

Let’s explore the continuum of leadership styles and the impact they have on an organization.

1. Democratic Leadership

Qualities: Collaborative, encouraging, participative

Democratic leaders emphasize teamwork and involving teams in the decision-making process. They encourage discussion and seek consensus and approval. A democratic leader is likely to ask, “What do you think?”

This leadership style encourages employees to be part of the process. In turn, this promotes team spirit and cooperation. Work gets done because employees feel satisfied that they are involved in the process.

Democratic leaders facilitate communication across various levels of the organization. They aren’t handing down orders and instead believe that everyone has an equal chance to offer an opinion. 

2. Authoritative Leadership

Qualities: Decisive, confident, strategic

An authoritative leader sets the map and leads others. These leaders are able to engage and energize others. When situations are uncertain, they project confidence and the overall vision for the company.

Authoritative leaders do not just issue orders. Instead, they take the time to explain their thinking and rationale. They allow employees to have some latitude in how goals are reached. 

At the same time, authoritative leaders have a lot of control. They set the goals without input from others and oversee the steps to get there. However, they do not cross the line into “authoritarian,” which is a leader who demands compliance without question. 

3. Transactional Leadership

Qualities: Directive, task-oriented, responsible

Transactional leaders are highly focused on the task at hand. They understand what needs to get done and think about how to motivate employees to get the work done.

Think of transactional leaders as “give-and-take” or “reward-and-punishment.” They recognize when work is well done and also think there should be consequences for those who don’t meet expectations.

With transactional leaders, employees have a very clear understanding of what is required of them. Much of transactional leadership is focused on short-term planning and making sure that the immediate needs of the company are met.

4. Laissez-Faire Leadership

Qualities: Hands-off, trusting, comfortable with mistakes

The French term “laissez-faire” translates to “let it be.” Laissez-faire leaders invite and encourage team members to help lead the organization. They trust employees to make decisions and often go with the flow.

A laissez-faire leader provides their team members with the right tools and resources to get their jobs done. After that, they take a step back. Team members make the necessary decisions and solve problems as they come up. 

Employees can feel independent, empowered, and self-motivated with laissez-faire leaders. This can work well in environments with highly-skilled or creative employees. However, a lack of leadership structure can also lead to confusion about who makes the final decision. 

5. Transformational Leadership

Qualities: Visionary, drivers of change, focused on the future

Above all else, transformational leaders are focused on change. They recognize when something isn’t working and want to make improvements. They put a critical eye on every aspect of an organization and wonder if things can be better.

Transformational leaders guide people outside of their comfort zones. They aren’t comfortable with the status quo and think outside of the box. Their goals aren’t only to achieve change but to rally people around a shared vision.

Often, transformational leaders are hired specifically by organizations for the purpose of igniting change. They may be brought into an organization to improve culture or otherwise turn things around.

These leaders know that change does not happen overnight. They give people autonomy and breathing room while working on change from within the organization. Transformational leaders take a lot of pride in seeing their team members achieve something that was previously thought impossible. 

Impacts of Leadership on an Organization

Overall, leaders are a driving force in company culture. The workforce today is rethinking what it wants from leadership. Employees are seeking someone who inspires and shapes change. The definition of success is no longer only reaching that high-ranking title.

Instead, it is about respect for leaders and the work that they do. Leaders need to focus not only on the impact on their employees but also lead by example. This includes focusing on accountability, transparency, leadership wellness, and encouragement. 

At the other end of the spectrum, poor leadership can be felt deeply throughout an organization. If the leadership style is at odds with the needs and culture of the company, it can result in low morale, high turnover, and an inability to achieve success.

Can Leadership Styles Change?

Yes. True leaders should want success for an organization. They are reflective enough to understand that their styles should adapt to the situation. 

This is not the same as undergoing a radical personality change: that isn’t going to happen. Rather leaders know when to apply different skills and leadership qualities in order to move an organization forward. Leadership involves growth since the people they lead, and the organization as a whole are constantly evolving.

Leadership From Within

Today’s leaders don’t need to be at the top. The leadership styles that initiate change can instead come from within an organization by inspiring and motivating those around them.

The strongest organizations are those that motivate leadership at all levels of the company. By fostering leadership across all levels of the organization, companies can meet current demands for innovation and flexibility in a rapidly changing world.