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9 Most Effective Leadership Styles in 2021 (Find Out Your Own)

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9 Most Effective Leadership Styles in 2021 (Find Out Your Own)

Leadership styles are inherent, or they develop with time and practice. It is more than a position of authority. Good leadership is a choice. A leader is someone who mentors, leads, inspires, and keeps the team spirit alive. Even in the most challenging situations, they take accountability for their actions.

But what is the one thing that you need to be a leader? Can you guess?


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The answer is people! Yes. That's it.

Humans are social animals. When they receive recognition for doing a good job, they are more likely to perform better in the future. But will people follow you even without any extrinsic or intrinsic motivation? Are they willing to choose you and follow your lead?

A good leader provides a clear vision of the company's goals and mission. Beyond the profits you make or the numbers at the end of the year, a leader gives a sense of purpose behind one's action. What is the point of the growth? What is your impact on the company's success?

But first, let's start with the absolute basic.

What is Leadership Style?

Leadership styles are how a leader guides a team through different stages. These styles dictate how a leader implements plans, provides guidance, and overlooks work. Based on different personalities and methods, there are many different styles.

"The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things." – Ronald Reagan.

Now, as we got a gist of how a leader impacts the organization as a whole, it's your turn to find out what kind of a leader you are.

1. Transactional Leadership


"The task of leadership is not to put greatness into people, but to elicit it, for the greatness is there already."
– John Buchan

What comes to your mind when you see the word “transaction”? In literal terms, it means the agreement to buy or sell something. In this case, the deal is between the leader and followers.

Transactional leadership is a "give and take" scenario. Reward or penalizes your employees according to the organization's standards. Everyone knows what to do, why to do it, and to what standard. Evaluation of employee performance happens with predefined criteria and goals.

This style can be effective if the employees are also motivated by perks and benefits. It works best where the tasks are repetitive and goal-oriented.

Key characteristics of transactional leadership style

  • Focuses on concise goal setting and communicating clear expectations to the employees.
  • The employees need to be equally motivated by getting the proper amount of rewards and recognition.
  • Ideal for large corporations with global teams.
  • Transactional leaders prefer typical workflow and satisfy the daily quota.

Works best with large corporations with routine jobs where the team is already motivated and are experts who need a little direction.

2. Transformational Leadership


"If you want something new, you have to stop doing something old."
– Peter Drucker

This leadership style believes in the concept of transforming anything into something better. Transformational leaders provide the team members opportunities to explore different ideas and approaches. They let their creative juices flow.

You make your team feel that you care about them by putting them first. You express care and concern for your team members and their problems. It fosters a sense of bonding, belonging, and loyalty towards the organization.

But relying on praise and nurturing can also lead to mediocre performance over time. It can also result in a lack of strong, clear direction for the company. Leaders should establish a balance to ensure that people don't get too comfortable.

Key characteristics of Transformational Leadership Style

  • Works best when you need fresh ideas or new perspectives.
  • There is also a particular appetite for risk in this leadership style. It is because leaders are always on the lookout for better ways. It means going out of one's comfort zone.
  • This style encourages both the professional and personal growth of the employees.

Use this style when your business requires constant innovation and moving ahead of the crowd, such as the internet or IT industries.


3. Servant Leadership


"The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant."
– Max De Pree

The servant leaders operate on the idea of service first, lead later.

This style of leadership runs on the motto, “You manage other people the way you would like to manage.” You ensure that everyone knows their job. Ensure that they have all the tools and supplies they need before they begin. If they don’t, you offer them everything they need to succeed.

This style is a favorite among the workers. It works wonders for employee morale and employee experience. But if you don’t balance it, this can lead to your team running the show. It can result in a lack of authority, a little direction, and vision.

Key Characteristics of Servant Leadership Style

  • This style has a high degree of awareness toward the team. Leaders of this category are great listeners. It gives them a better understanding of the team’s strengths and weaknesses.
  • Great for building respect, trust, and loyalty.
  • Helpful in building a solid company culture.

Works best for a diverse team, where personalized management is required for each member.

If you want to dig more into this style of leadership, check out our blog here on Servant Leadership!


4. Democratic Leadership


"A functioning, robust democracy requires a healthy educated, participatory followership, and an educated, morally grounded leadership."
– Chinua Achebe

Democratic leadership style has what you call the "two is better than one" philosophy. Democratic leaders emphasize the inputs and ideology of workers. The business world also calls it "participative leadership”.

This type of leader makes the final decision. But at other times, democratic leaders may delegate power to followers. Having said that, a democratic leader is not off the hook. They are still accountable for all the outcomes.

This is the decentralized approach to power and authority. (Contrasts with the centralized approach of autocratic leaders, which we will address later.)

Key characteristics of Democratic Leadership Style

  • A democratic leader seeks inputs and feedback from followers to make decisions.
  • The leader believes that they can make the best decision with lots of inputs from followers.
  • Not the best approach for a crisis when there is high pressure and time is short.
  • This leadership style emphasizes the aspect of equality in the workplace. Followers of this style take all inputs into account, irrespective of ranks.

Works best with all kinds of organizations. Although places where strict procedures are required, such as manufacturing industries, democratic leadership is not the best choice.

5. Autocratic Leadership


"Nobody is going to delegate a lot of power to a secretary that they can’t control."
– Micheal Bloomberg

How do you picture an autocratic leader?

We picture someone barging into the room and telling people what to do.

As the name hints, autocratic leadership is a boss-centered approach to leadership. The leader has absolute control over the entire operation. They have a top-down approach to communication. They dictate instructions, policies, and activities and expect the followers to comply. You can see high power dynamics going on between the leader and the followers.

Autocratic leaders give little to no importance to socializing and team-building activities. These leaders take no input or feedback from group members. They assess a situation from their own perspective.

Key Characteristics of Autocratic Leadership Style

  • Works best when a quick decision needs to be made.
  • An autocratic leadership style might help suppress a conflict in the short run. But it does not solve the conflict.
  • There occurs a colossal lack of trust in this leadership style on the subordinates. It is why the power to make all the decisions lie in the hands of the leader.

Best approach when consensus is not possible and the leader is required to make a judgment call.

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Can you think of someone who projects such qualities as a leader? Let us know in the comments below.

6. Laissez-Faire (Delegative) Leadership


"If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them."
– Jack Welch

"Laissez-Faire" is a French term meaning let do or let them do it. Some critics call it the “Zero leadership” style. It is a philosophy of non-interference. Leaders will give directions or goals and are less likely to check on you. They have fewer meetings and expect you to do it on your own.

Key characteristics of Laissez-Faire Leadership Style

  • A laissez-faire leader places a lot of trust in their members and their abilities.
  • This management style works by allowing greater employee autonomy. It subsequently adds to more creativity in the workplace.
  • Constructive feedback is a vital component of this leadership style.

Works best if the leader has a group of people who already excel at their skills.

7. Bureaucratic Leadership


"The bureaucracy is a circle from which no one can escape. Its hierarchy is a hierarchy of knowledge."
– Karl Marx

Bureaucratic leaders live by the rules. There are certain times that you expect to get things done by “the book.”

You want to get a tattoo and expect the tattoo artist to follow the original procedure. You want to get your car repaired, and you want the mechanic to fix the problem by the rules. Likewise, you want to lead your team by the laws of the book.

Bureaucratic leaders always follow specific rules and stick to those at all times. Yet, this leadership style can be very rigid at times. This rigidity restricts the level of creativity in the process.

Characteristics of Bureaucratic Leadership Style

  • A bureaucratic leader loves rules, policies and follows procedures meticulously.
    Decision-making processes are typically slow-paced.
  • There is no room for new ideas or innovations. Employees follow routine methods of problem-solving.
  • A management approach of this sort is also very well-organized. Leaders here delegate the tasks as per ranks for better results and accountability.

Works best for large industries such as manufacturing plants where the employees perform routine tasks.

8. Charismatic Leadership


"Charisma is the intangible that makes people want to follow you, to be around you, to be influenced by you."
– Roger Dawson

Charismatic leaders are the ones who can walk the talk. The leaders of this style are masters of communication and persuasion with a sense of charm. They have a specific type of appeal, attraction, and magnetism. It helps them gain people to follow their lead. They inspire, excite, and spark enthusiasm among the team members.

Some charismatic leaders that we can think of are Dalai Lama and Obama. They exude warmth and presence when they walk into a room. It is, what they call, the aura!

Some people are born charismatic, and some acquire it with time and experience.

(Recommended blog- What is Charismatic Leadership? Definition, Characteristics, and Benefits! )

Key characteristics of Charismatic Leadership Style

  • Charismatic leaders are very confident in their approach. They rarely have any self-doubt about their decisions and possess a very influential personality.
  • They have an influence over a large group of followers.
  • They fuel the motives of the employees and believe in the ability of the employees.
  • They place high expectations and competence and act as a role model for the employees.

Works best for social activists, motivational speakers, or political leaders—someone who needs to inspire and gain the trust of their followers.

Leaders like Late Princess Diana, Mahatma Gandhi, Will Smith exude a spark and sense of charm.

9. Coaching Leadership


Leadership is about making others better as a result of your presence. And make sure that impacts last in your absence.
– Sheryl Sandberg

This style of leadership believes in coaching the workers towards greatness. They are usually experts in their field of interest and are great communicators. This type of leadership is most prevalent in sports teams. Yet, it can get troublesome at times as it takes time to mentor and coach the employees.

Key characteristics of Coaching Leadership Style

  • Coaching leadership works best with people who have a coaching mindset and are willing to learn from their leaders.
  • Leaders also should be ready to spend time and energy coaching their employees to improve them in the long run.
  • Empathy and trust are the pillars of this style of leadership.

Works best for teams who need to be trained thoroughly to perform to the best of their abilities.

Leadership styles in the age of Covid-19

Covid-19 has made it difficult and cumbersome for both businesses and life in general. It was a crisis that was new and unprecedented for everyone. There is no perfect way to handle a problem - it is a constant trial-and-error method.

According to a report by Upwork, 26.7% of the American workforce will still be working remotely in 2021 and 22% by 2025.

Thus, leaders must analyze their leadership styles. They must brush up on their leadership practices, especially for the post-Covid era. It doesn’t matter which leadership style you have; make sure you focus on these factors.

Three focus areas that leaders need to inculcate during a crisis-

  • Communication -
    Communication is the key to good leadership and employee engagement. The power of human connection keeps everyone moving and strive towards success. Maintain a communication routine and stick to it. Even for the days when the employees have nothing new to say. Understand what is being said and not said. It will make everyone stay on track and never miss out on information.

  • Promote employee well-being -
    People working from home are managing both work and personal life. It will make them feel stressed, burned out, or experience workplace loneliness. Leaders must analyze how the company’s health and well-being benefits can support employees. Not to miss emotional well-being too.

  • Flexibility and Adaptability -
    Leaders must understand and empathize with their employees. So they must inculcate flexibility and adaptability. Leaders must open up to new ideas and suggestions. It makes work from home more productive for the employees. This will also help reach the organization's long-term objectives.

Types of leadership Approaches that can help the Leaders during the Covid crisis-

  1. Democratic -
    Taking inputs and suggestions from your team in uncertain times will benefit everyone. It can also foster a mutual sense of respect and a better approach to decision-making.
  2. Transformational -
    It is always a good idea to give a voice to the employees. Let them put forward new views and opinions. It helps the leaders to understand the situation. It strengthens the bond and trust with your employees by showing that you hear their voices.
  3. Charismatic - When people are looking for calm in the storm, a charismatic leader can act as the anchor and help people ground themselves and clarify purpose. Sometimes it’s good to bring some humor in the workplace and lighten up the moods.
  4. Servant - According to a Forbes article, Servant leadership is one of the best approaches to leadership during stressful times like Covid. Employees have reported low levels of stress and anxiety and high levels of employee engagement who worked under a Servant leader. Servant leaders pay attention to employees’ emotional well-being and happiness which helps them cope with the pandemic stress.


*(Disclaimer: The above analysis is based on our experience and knowledge and not on facts and figures.)

Final Note

Leadership takes skills and hard work to excel in one’s environment. An effective leadership style is not something that is carved in stone. Anyone can pick or drop any leadership style or combine them depending on the situation and people. It depends on one’s resilience, emotional intelligence, and experience while elevating their overall leadership qualities. Keep in mind that it is an ongoing process that solely depends on adapting to the corporate world’s changing dynamics.

Moreover, one of the strongest leadership qualities can be seen in the military. In businesses, we have colleagues and co-workers. In the military, they have brothers and sisters. They might fight and bicker, but when faced with challenges, they stand united.

But how did they create a bond as strong as blood relations out of strangers?
Common values, common beliefs, and a strong sense of belonging.

Help your employees succeed. Help them build their confidence and achieve more than they and you have ever imagined. That’s leadership!

Thadoi Thangjam is a content marketer and digital marketing executive at Vantage Circle. When she’s not geeking out over content strategies, she is probably hunting for the next perfect track to add to her playlist. For any related queries, contact