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Traction Inc.

13 Nov 4 Types of Leadership Styles in Business

Posted at 8:00:00 AM by Chris Hallberg

Every enterprise needs someone at the helm making decisions and setting a course for success. But, the wayLeadership styles in business that a company is managed will have a lot to do with how successful it is and how well it retains talent. Management styles can be broken down into four basic types, each with their plusses and minuses. These types include:


Think Donald Trump and his "You're fired!" his way or the highway way of doing business. An autocratic style can feel, and can often be, efficient. If it is understood that you do not have to communicate why you need someone to do something, you can have your visions come together more easily.

But, this is a style that many workers find abrasive and unsatisfying. Workers rate responsive management higher than pay when it comes to workplace preferences. This is especially true of Millennials, who are soon to become the largest cohort in the workplace.


In participative management, employees are invited to step forward and share their ideas about what can make the workforce safer and more effective. This style arose in the 1920s as part of the human relations movement. In this style, management still retains final say, which means that the overall vision of the company can be preserved. Warren Buffett runs his company using this style. 

The back and forth can be time intensive, but, workers in companies with this style feel more valued, which leads to higher productivity and less employee turnover.


When you are developing a product or service that will be highly disruptive, a transformational style of management is key. This management style is highly collaborative. It involves bringing the best minds together and putting them to the task of creative truly remarkable and innovative work.

Mark Zuckerburg used this approach to make Facebook so ubiquitous. It has the advantage of allowing this sort of change, but, it can also be extremely time-intensive. And, for every world-changing Facebook, there are hundreds of technologies and products that are nowhere that successful.


In a well-established business where the main goal is smooth continuity, a transactional management style can be a good fit. In this style, those in charge use a system of reward and punishments to ensure that all procedures are followed. It is especially effective in emergency-management and in businesses where specific procedures are necessary, such as one with heavy regulation and oversight. In Elon Musk's heavily technology-based companies, this style of management allows room for steady improvement instead of disruptive innovation. 

No one style is a fit for every business, nor should any one style be slavishly adhered to in every situation. An Entrepreneurial Operating System (EOS) can help you and your team craft better and more effective leadership. With this tool, you can guide your team toward the growth and results you want.


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Topics: EOS