8 Leadership Styles in Business: Which is Best for You?

There is no one-size-fits-all approach to leadership—but there are a lot of options. As a leader, you get results by guiding and motivating a group of people, whether that group is working on a project or building a company. Understanding different leadership styles and how to adapt them to different situations is essential for effective leadership.

This article introduces eight of the most common leadership styles:

• Autocratic
• Coaching
• Democratic
• Laissez-faire
• Servant
• Transactional
• Transformational
• Visionary

Each of these leadership styles can help drive or hinder your success, depending on numerous factors such as context, organizational culture, and team dynamics, as well as your position and circle of influence. We’ll dig into the key characteristics of each approach and provide insights and examples to help you choose the best approach for you.

Autocratic leadership

An autocratic leader takes a “top-down” approach, making decisions on their own without input from other people. Also known as authoritarian leadership, this is a high-control approach—the uneven distribution of power between the leader and the rest of the group is significant and clearly delineated.

Autocratic leadership can be confused with bureaucratic —another high-control approach. However, while both are driven by strict hierarchies with minimal collaboration or flexibility, a bureaucracy is driven to do things “by the book” rather than following the unilateral decisions of one person.

Characteristics of autocratic leadership

• Strict control over work and performance
• Clear expectations, which may include specific instructions on how tasks should be completed
• Little or no opportunity for input from others
• A tightly structured work environment
• Emphasis on results, efficiency, and adherence to established processes

When to use autocratic leadership

Autocratic leadership is a traditional approach that, in many ways, has dropped in popularity because it has the potential to stifle creativity and generate resentment.

However, there are situations—particularly in a time crunch—when a leader who’s assertive and responsible for their decisions can be an asset. For example:

• In an emergency situation or moment of crisis, when there’s no time to deliberate, and quick and decisive actions are necessary
• With an inexperienced team, where nobody else has the knowledge or experience to provide meaningful input
• In a high-risk environment, where divergent opinions could spark confusion or put people in danger

Some of the most celebrated business leaders have also used an autocratic approach to attain extraordinary results. Apple’s innovation is legendary, but Steve Jobs is as recognized for disruption as he is for making unilateral decisions and expecting strict adherence to his vision.

Coaching leadership

A coaching leader leans into one-on-one relationships, mentoring and guiding others to excel. This style is highly focused on individual potential, with leaders investing time and resources into the personal and professional development of team members.

Coaching leadership is sometimes used interchangeably with transformational leadership. However, while both emphasize support, relationships, and growth, transformational leadership looks at the organization as a whole rather than individual development and empowerment.

Characteristics of coaching leadership

• Listening to the group in order to understand their needs, concerns, and aspirations
• Empathizing with challenges at work as well as in personal lives
• Developing talent through a process that includes goal setting, constructive feedback, and action plans
• Supporting their team with patience and persistence, prioritizing long-term growth over short-term gains
• Creating an environment that’s collaborative, with high trust

“As a leader, I feel my job is to set the vision and the goals for the company, and then to work with everyone to empower them to dream big and crazy.”
– Melanie Perkins, Canva

‍

When to use coaching leadership

Coaching takes time and often isn’t a good match for results-driven and fast-paced environments or crisis situations. However, this style of leadership can be an effective way to build trust and loyalty, which helps boost motivation and workplace satisfaction.

A coaching leadership style can be a particularly valuable option for:

• Highly specialized teams, where individual performance has a significant impact on the capabilities of the team as a whole
• Periods of significant change—such as an organizational restructuring or business pivot—where the long-term objective is for employees to thrive with a new way of working
• Development situations where you’re helping someone improve their performance by providing support, guidance, and learning opportunities to help them overcome challenges

Democratic leadership

A democratic leader gets other people involved in the decision-making process and tries to find a balance between the needs of individuals and the goals of the organization. This people-oriented approach, also known as participative leadership, prioritizes open communication and values collaboration and diverse perspectives.

Characteristics of democratic leadership

• Solicits input from team members
• Aims to build consensus around key decisions
• Welcomes feedback and suggestions
• Empowers employees to take responsibility
• Fosters a sense of trust and respect within the group
• Focuses on both results and employee satisfaction
• Encourages continuous learning and development

When to use democratic leadership

Democratic leadership can be an effective approach in situations where different perspectives can lead to more innovative solutions. For example:

• Start-up environments where a group is trying to reach a common goal by solving complex cross-functional problems
• During periods of organizational change when input and engagement can help earn buy-in and support
• In established businesses that can leverage internal insights and expertise to develop new products and services

However, a democratic approach isn’t ideal in high-pressure situations or crises where decisions need to be made quickly.

Laissez-faire leadership

In the context of leadership, a laissez-faire work environment is relatively hands-off. While following this approach doesn’t mean a leader should check out and hope for the best, it does mean taking a step back and getting involved only when asked.

Characteristics of laissez-faire leadership

Central to the concept of laissez-faire leadership is that team members have autonomy and flexibility to make decisions, solve problems, and manage their own work. This leadership style is also characterized by teams that have:

• Clearly communicated goals, objectives, and milestones
• Accountability, with minimal guidance and supervision
• Freedom to pursue individual ideas and initiatives
• Easy access to tools, additional resources, and training
• Authority to self-organize and self-motivate
• A work environment that can easily change and adjust

When to use laissez-faire leadership

A laissez-faire approach requires a high degree of trust in your team’s expertise and motivation. It also comes with some risks. For example, with the potential for interpersonal conflict and misunderstanding, as well as your lack of input toward the final product, there’s a possibility the results will fall short.

However, with trust as a foundation and thoughtful milestones and frameworks in place, laissez-faire leadership can be an effective approach:

• For retail environments, where empowering workers to take action on their own can lead to better customer service experiences
• In creative industries, where individual innovation and originality are highly valued
• In technical environments, where the ability to act with flexibility and independence can help achieve the best results
• For global teams that have already established a high-trust remote work environment

Servant leadership

The concept of leading through service to others first may sound contradictory. But when Robert K. Greenleaf first shared what the New York Times described as a “humanistic philosophy for business people,” he believed servant leadership would ultimately offer organizations a way through times of tension and conflict.

In an essay called “The Servant as Leader,” Greenleaf wrote that by prioritizing other people, “one is always searching, listening, expecting that a better wheel for these times is in the making.”

“Anybody could lead perfect people—if there were any. But there aren’t any perfect people…People grow taller when those who lead them empathize and when they are accepted for what they are, even though their performance may be judged critically in terms of what they are capable of doing.”
— Robert K. Greenleaf, “The Servant as Leader”

‍

Characteristics of servant leadership

• Approaching situations with humility, acceptance, and empathy
• Active listening and open communication
• Honest and constructive feedback
• Receptiveness to new ideas and ways of thinking
• Encouraging team-building and collaboration
• Challenging and supporting team members to reach their highest potential
• Delegating authority so others can make decisions and manage their own work
• Committing to the personal and professional development of team members

When to use servant leadership

Herb Kelleher embodied servant leadership. The cofounder of Southwest Airlines—later CEO and chairman—was a legendary leader remembered for helping his followers grow and succeed.

As author Bill Taylor eulogized in HBR: “In a company devoted to giving its customers ‘the freedom to fly,’ Kelleher and his colleagues identified the ‘Eight Freedoms’ that defined life inside [the] airline, from ‘the freedom to learn and grow’ to ‘the freedom to create financial security’ to ‘the freedom to create and innovate.’”

Taylor continued, “Kelleher understood better than any CEO I ever met that your brand is the outward expression of your culture, and that your culture is the only platform that can sustain and renew your brand.”

While this example shows servant leadership is more flexible than it might seem, it’s a leadership style that can work particularly well in service-oriented organizations such as:

• Not-for-profit organizations, which often have a commitment to social responsibility and ethical conduct among all stakeholders that aligns well with the values of servant leadership
• Healthcare organizations, where the demands on healthcare workers often call for additional emphasis on empathy, support, and understanding
• In smaller organizations where prioritizing employee engagement, growth, and welfare can help build a strong sense of purpose and cohesion

Transactional leadership

Transactional leaders are focused on results, relying on performance-based rewards and negative consequences to encourage behaviors. This leadership style puts a particular emphasis on efficiency and productivity.

Characteristics of transactional leadership

• Focus on achieving short-term goals and tasks
• Emphasis on structure and routine
• A close eye on performance
• Frequent feedback—both positive and negative
• Well-defined roles and responsibilities
• Insistence on following rules, policies, and procedures

When to use transactional leadership

Transactional leadership isn’t a strong approach if you want to create an environment that can support long-term innovation.

However, the transactional leadership style can be a powerful way to hit short-term goals. It works particularly well in environments with well-defined repetitive tasks and processes such as:

• Sales departments, where teams often excel when working toward specific sales targets and incentives such as commissions, bonuses, and promotions
• Assembly line production, where you can set production standards for quality control and efficiency, then reward or penalize workers based on whether they meet those standards
• In customer service environments, where performance can be measured against cleanliness standards, customer satisfaction, and other service protocols

A transactional approach can also be effective in organizations that need to stick to the status quo, where structure can be essential, such as military organizations.

Transformational leadership

Transformational leaders help drive significant change by inspiring others to follow their lead, motivating their team to embrace change, encourage original thinking, and prioritize the growth and well-being of others.

Coaching and visionary leadership styles are closely aligned with transformational leadership—but there are subtle differences:

• Coaching leaders emphasize one-to-one relationships
• Visionary leaders use strategy to move their teams toward a compelling long-term goal
• Transformational leaders lean into unique thinking and problem-solving to help their teams reach a common goal

Characteristics of transformational leadership

• Less structured environment to encourage out-of-the-box thinking that pushes the status quo
• Clear communication, high expectations, and a shared vision
• Challenging team members to reach their potential
• A collaborative environment that emphasizes learning and talent development
• Empathy toward team members, recognizing unique needs and challenges, then providing support and guidance to help them progress
• Trust and loyalty through authentic relationships

When to use transformational leadership

The transformational leadership style can be very effective through times of significant change and upheaval, such as a merger, restructuring, or disruption to your industry. For example:

• Start-ups that rely on workers to push their limits and challenge expectations as the whole team reaches for a shared vision
• Rapidly growing organizations, where a transformational leader can encourage people to solve emerging challenges and stay engaged
• Knowledge-based industries that face constant disruption, where a culture of learning and curiosity encourages professionals to stay sharp and adapt to changes

Visionary leadership

Visionary leaders have the ability to conceive original and even audacious ideas for the future. Visionary leaders don’t just inspire others to rethink what’s possible; they get others on board and ignite the passion needed to bring those shared dreams to life.

Sometimes called strategic leadership, visionary leadership is often used interchangeably with transformational leadership. However, there is a subtle difference:

• A visionary leader has their eyes on the future, taking a strategic approach to move toward their long-term goals
• A transformational leader shares a vision with their team but works to start that change in the short-term through talent development, innovation, and new ways of thinking

Characteristics of visionary leadership

• A compelling vision that serves as a “North Star”
• A high-level approach that keeps the focus on the big picture and long-term goals
• A strong organizational culture that supports the vision
• Collaboration, creativity, and open communication
• Confidence in the team's ability to achieve the vision

When to use visionary leadership

Visionary leadership can be particularly valuable during periods of significant change or new beginnings. For example:

• In start-up environments, when there’s a clear vision of the goal the company wants to accomplish but no clear path to get there
• When launching a new non-profit organization, when the change you want to create is clear but you’re unsure how to have the most meaningful impact
• During an organizational turnaround when a clear vision of the future can help reenergize workers, instill a sense of purpose, and create momentum to help overcome challenges along the way

Reshma Saujani founded Girls Who Code when she realized the size of the gender gap in computing classes across the U.S. Beginning in 2012, she has successfully conveyed her vision to her team, volunteers, and partners. Girls Who Code has grown—and believes they can close the gender gap in new entry-level tech jobs by 2030.

What’s the best leadership style for you?

Everyone has natural leadership qualities that draw on their unique experiences, values, and beliefs. The most effective leaders play to these strengths and learn how to blend different leadership styles to get results.

“Leaders with the best results do not rely on only one leadership style; they use most of them in a given week—seamlessly and in different measure—depending on the business situation.”
— Daniel Goleman, Leadership and Emotional Intelligence Expert

‍

Which leadership style—or mix of styles—is the right fit? Different factors can point you in one direction or another. For example:

• Your position: The scope of your responsibility and ability to influence the organizational climate around you.
• Task vs. people: Some leadership styles work better when the main priority is accomplishing tasks and meeting objectives, while others are ideal to help build relationships, foster personal growth, and address the needs of team members.
• Future vs. present focus: For some projects, a short timeline can create significant constraints on your ability to create long-term change.
• Decision-making process: The decision-making process that will fit your group often depends on the context, culture, and personalities involved.
• Communication style: How you share information can be driven by the context and culture of your group, but it can also be shaped by your strengths.
• Control and delegation: These criteria describe how much control you choose or need to retain over decision-making and task completion.
• High- vs. low-skill work: Some leadership styles work better for tasks that require specialized knowledge, expertise, or technical skills, while others are ideal for tasks that are routine, repetitive, and less specialized.
• High- vs. low-risk environment: The ideal approach to leadership may depend on the level of uncertainty or predictability involved, the potential for loss, and the consequences of failure.

Let’s take a look at how each leadership style measures up.

Comparing leadership styles

Click to view full size

‍

How to change your approach to leadership

Professional development for leaders is focused as much on developing powerful traits as it is on strengthening your basic skills. There are essential leadership skills—such as empathy, active listening, building relationships, and setting healthy boundaries—that will always help to ensure you’re equipped to lead.

Different leadership styles draw on different skills. As you consider how to change your approach to leadership, sharpening your basic skills will give you the most flexibility.

Click to view full size

‍

It’s important to understand how you contribute toward success and how you get in your own way. Self-assessment tools can help you understand your strengths as a leader as well as what you should prioritize to improve. Analyze how you currently react when it comes to your:

• Goals and achievements
• Strengths and weaknesses
• Values and ethics
• Feedback process
• Personal growth and advancement opportunities

Through critical self-assessment, or with help from a coach or mentor, you can expand your leadership capabilities and move forward with the most effective leadership style for any situation.

Hone your leadership skills with talent on Upwork

Upwork isn’t just a place where you can find and hire top talent to bridge skill gaps on your team. You can also use the world’s work marketplace to find the expertise to help you build your leadership skills, including business coaches who can help you customize a personalized development program. Start your search for the talent you need.