As an entrepreneur, you will no doubt have your own style of leadership which helped you to establish a successful business. Effective leadership involves being able to adapt favourably to any given situation and take advantage of opportunities presented to you, which is, of course, influenced by your approach to leadership. It is, therefore, useful to have a basic understanding of the most common types of leadership styles , allowing you to change your technique and style depending on external factors that may affect your business.

Many business thought leaders have developed leadership theories that can be used to analyse the way you work and help you grow. One of the oldest situational theories was developed by a psychologist named Kurt Lewin in 1939, whereby he identified three key styles of leadership.

Authoritarian Leaders

As an authoritarian leader, you will be clear about the tasks, boundaries and expectations of your staff. You will be likely to hand out tasks but will not be involved in completing them – instead, taking the role of autocrat.

Pros: If you work to tight schedules, this style of working leaves little room for error.

Cons: creativity and innovation become stifled. If you have long-term plans to develop and grow your business, you will likely be creating an uninspiring work environment for your employees, which may lead to resentment and be counter-productive to your onjectives.

Democratic Leaders

If you are a democratic (or participative) leader, you will not only be clear about your business priorities, but will also leave room for creativity within your staff, involving them in decision making processes. You will listen to and value their input, but will ultimately have the final say-so on any decisions.

Pros: if you are able to encourage creative thinking and problem solving from your staff whilst retaining a firm handle on costs, it will enhance the value of your products or services, as well as create an enjoyable working environment.

Cons: it may not be the right approach when time restraints are very tight.

Delegative Leaders

This style is sometimes described as laissez-faire, since it adopts such a relaxed attitude. A delegative leader will hand all responsibility for achieving goals to the employees, allowing them to make key decisions and steer the business themselves. It has to be said that this type of leadership style is very rare amongst entrepreneurs

Pros: the high levels of trust may motivate the staff to deliver high-quality and innovative solutions.

Cons: with the lack of a leader, the staff may eventually lack direction and become disillusioned.

Whatever your natural leadership style, it is always good practice to reflect on the way you lead a group, considering how it may be affecting the business’s bottom line as well as the working environment. In certain situations, you will need to adapt your leadership style for the good of the business.