Leadership Styles of Top Chief Executive Officers
If you’re an aspiring CEO or a current leader, knowing the different leadership styles is essential. Leadership experts from Vistage, a networking group for senior executives, explain the most common CEO leadership styles and how each benefits businesses.
The authoritative leader focuses on end goals and leaves the way to get there up to team members. This leadership style can boost morale, but it also can discourage innovation.
Autocratic CEOs: Pros and Cons
Autocratic leaders value results and efficiency over all else. They are often found in highly regulated industries that require strict compliance and precise processes. They also find a home in military organizations and other teams that demand quick responses in high-stress situations.
Those with this leadership style tend to make decisions independently without consulting others. They rarely delegate decision-making power and believe they are the only ones capable of making important decisions for the business. This allows them to get things done quickly.
The problem is that it creates a dependency among employees as they must rely on the leader to provide them with direction. This can lead to low levels of employee satisfaction and morale.
Another problem is that it can be easy for these leaders to abuse their power. They may use their position to further their career interests or personal gain at the company’s expense. This has occurred in many different situations and can be a serious ethical concern for any business.
Democratic CEOs: Pros and Cons
The democratic leadership style allows top executives to listen to their employees and consider the results of brainstorming sessions. They may also consult with other business leaders for advice. The leader who employs this management style is a trusted advisor and understands that a good idea can come from any employee. Google is one company that exemplifies this approach, with CEO Muhtar Kent calling their organization a “collaborative community” and describing his role as being more of a “guide than a dictator.”
This leadership style can empower employees and foster creativity and innovation. It can also help with team morale and overall productivity. However, it can be challenging to balance between a democratic and autocratic leadership style.
The democratic leadership style is best used when a business leader needs their team’s input on a decision, plan, or goal. It can also work well when a team is experiencing workplace conflict, and a peaceful resolution is needed. The downside is that this management style can take longer than other leadership styles, especially when a consensus is necessary.
Transformational CEOs: Pros and Cons
Transformational CEOs focus on motivating their employees and promoting teamwork. These leaders create an inspiring future vision that entices their team members to work harder. They understand what motivates different members of their teams, so they can adjust their leadership styles to meet the needs of their staffers.
These leaders also promote actions that align with corporate goals and benefit employee well-being, which increases buy-in of agreed-upon initiatives. For example, former Starbucks CEO Howard Schultz pushed for employee benefits such as healthcare and tuition-free degree programs. This leadership style helps to develop a solid corporate culture and trust among the organization’s employees, which is vital for business success.
However, these leaders may have trouble communicating their vision clearly and enforcing discipline when necessary. This can cause them to miss significant opportunities for growth. They also might have difficulty adjusting to sudden changes, such as a reorganization or budget shortfall. For these reasons, they need to be prepared for the unexpected and have plans to deal with them.
Laissez-faire CEOs: Pros and Cons
Laissez-faire leadership is a hands-off approach that allows group members to work independently. However, this is only an effective leadership style if the team members are highly skilled and experienced. Otherwise, the leader may lose control of the project.
This leadership style allows employees to explore new ideas and create a more creative environment. It also encourages out-of-the-box thinking, leading to innovative solutions that benefit the company. Additionally, this leadership style can increase employee job satisfaction by empowering them to make decisions and take ownership of their work.
Although this leadership style is hands-off, leaders can still provide feedback and constructive criticism to their team. They can also set transparent systems of rewards and penalties to motivate their teams. In a blog, Emily Lundberg, marketing manager for Prialto, writes that research shows goal commitment increases when managers ask for group input before launching new performance objectives. This can be accomplished by meeting with employees to discuss what they need from the company and letting them develop their own goals.
Transactional CEOs: Pros and Cons
Transactional leadership may not have the cache of visionary or charismatic styles, but it’s been responsible for building global giants like Starbucks and transforming tiny local powerhouses. Bill Gates and Martha Stewart are examples of this style, which emphasizes conformity and a strict chain of command. It’s a management philosophy that values stability over innovation and prioritizes meeting goals and quotas over developing team members as individuals.
The benefits of this leadership style include clarity and efficiency. Employees know exactly what is expected of them and how to achieve it. Constant monitoring means mistakes are quickly spotted and corrected so they don’t hurt the rest of the company. In addition, short-term goals are easier to meet and reach than those that require more time.
Disadvantages of this type of leadership include a lack of creativity and an over-reliance on extrinsic motivation. Employees aren’t encouraged to think outside the box and can become numb to their work if they know it will have little effect on their future.
Servant Leadership in CEOs
Servant leadership is an empathetic style that promotes employee well-being. This type of leadership involves leaders listening to employees and caring for their needs, which can boost job satisfaction and motivation. It also encourages team members to develop their leadership skills.
A servant leader’s innate empathy helps them understand their team’s concerns and struggles. They also take the time to communicate with their employees to collect observations and insights, such as nonverbal cues or silent signals. In addition, these leaders often conduct MBWA (Manage By Walking Around) to get to know their employees and customers better.
A servant leadership approach can lead to a more collaborative work environment, ideal for creative industries such as marketing. However, this type of leadership can be challenging to implement in a business that requires quick decisions or strict protocols. Ultimately, CEOS need to understand their leadership styles and how they can affect the company culture and performance. Choosing the right one is critical to success.
Charismatic CEOs: Pros and Cons
Charismatic leaders have an innate desire to change things for the better. They encourage their teams to think outside the box and see what could be. They also tend to focus on continuous improvement, treating mistakes as learning opportunities rather than punishment.
This leadership style can inspire loyalty, strong teamwork, and a clear connection to the company’s goals and vision. It can also increase employee satisfaction and retention. Still, this type of leadership can be detrimental in other areas, like when it becomes self-centered and overly focused on the leader’s needs.
Those with this type of leadership are highly motivated and can be highly effective in the workplace. However, they can also be impulsive and act without thinking through the consequences of their actions. Strategic leaders often take risks and push back against traditional methods, but they also use a combination of flexibility, steadfastness, and big-picture thinking to make decisions for the company. They are attuned to what their competitors are doing and can spot potential business changes before others do.
Situational Leadership in CEOs
A situational leader adapts his leadership style to the needs of his followers. Initially developed by Ken Blanchard and Paul Hersey, this leadership theory allows managers to assess an individual’s or team’s ability level and workstyle to determine the best management style for them.
For example, a directing leadership style offers high levels of direction. In contrast, a supporting leadership style drops to low levels of exposure and emphasizes sharing ideas and facilitating decisions. This enables leaders to focus on building relationships with their teammates.
CEOS need to have a variety of leadership styles in their repertoire. Autocratic leaders may be influential when decision-making is urgent or quality control is critical. However, these leaders often lack employee trust because they are rigid and impose their will on others. Alternatively, democratic leaders may be more lenient but still expect employees to meet specific criteria for performance. Affiliative leadership techniques are suitable for motivating employees by fostering trust and teamwork. Supporting leadership styles are ideal for highly skilled and capable teams that don’t require much guidance.