Introduction

 

There are many types of leadership styles that a leader can adopt. The type of leadership chosen may depend on different generations, cultures, and industries. What works for one may not work for another. Ultimately, the common goals of companies are to grow the business, increase company profits, and improve employee retention. Thus, the leadership of the company plays an important part in the success of the businesses. Who would want to work for companies that have poor leadership? Below diagram reveals the common reasons why employees are quitting their jobs (Armstrong, 2022).

Most common reasons given for quitting previous jobs (Apr 21- Apr 22)

Leadership and Management

For an organization to succeed, both leaders and managers should complement each other, with leaders setting goals and driving change, while managers should implement processes and execute these processes to achieve the desired objectives. Managers focus on systems and structures, while leaders concentrate on inspiring, engaging, and encouraging people, which requires emotional intelligence and the ability to influence others (Gavin, 2019).

Which types of leadership do you prefer?

a.      Transactional Leadership (Bureaucratic)

This is commonly seen in organized institutions, large corporations and government sectors where there is little to no creativity or innovation, subordinates need not be highly motivated and required to adhere to rules of the company as they are just parts of an enormous operating machine. Employees are rewarded based on KPIs. The working culture for employees is highly dependent on leaders’ directions (The Economic Times, 2023). The managers usually adopt a command and control managing style, where employee development and career advancement is also limited (Miranda, 2023). Overtime, morale of the team become low. Thus, this style of leadership and management is not desirable even for large corporations even banks in the long run (Akhil Babbar, 2023).

b.      Transformational Leadership

Transactional leadership is usually adopted by industries that is constantly changing (Sayyadi, 2021). For these companies the need for change to enhance performance is heavy, thus motivation is an essential element to maximize employee’s capability and drive success. Leaders will set as a role model for employees. Other than being able to innovate and motivate, they should also poses some coaching ability, act with integrity and have a vision others can understand and trust (Dr Rebecca Newton, n.d.). One of the most well-known transformational leaders is Steve Jobs (The World Intellectual Property Organization, 2011). During his reign in Apple, the company has created products that gain worldwide popularity and dominance, setting the new industry standards and Apple underwent a soaring growth during that his period (Richter, 2016).

When Steve Jobs returned to Apple, he staged a boardroom coup. He decided that if Apple were to be saved, he would be the one to do it. Sean Gallup/Getty Images. (Matt Weinberger, 2020)

Transformative leadership is best fit for small company with ambitious goals but is ineffective in the initial stage or exception circumstance which requires immediate resolution. It requires an existing structure and will not work in bureaucratic companies.  (St. Thomas University, 2014). This style will be ineffective if the leaders and management has ever-changing milestones and goals due to indecisiveness, insensitive to the market or business needs and no clear purpose and expectations (Miranda, 2023). According to McKinsey & Company, 70% of the transformational leadership failed due to various reasons (McKinsey & Company, n.d.).

What type of leadership is effective?

Best leadership styles approach depends on the context. In dynamic and innovative industries that employ more millennials, transformational leadership are highly favorable. Employees has flexibility and continuous learning opportunities in the workplace, rather than the bureaucratic leadership associated with the boomer generation. For industries requiring a high level of compliance, such as large financial institutions or medical sectors, a combination of transactional and transformational leadership appears to be a better option which needs to adhere to the highest industry standards, while catering to changes. This approach allows for a more consultative and participative leadership style, enabling companies to keep up with the changing environment.

Great Leaders and their leadership style

The most successful leaders, Bill Gates, Steve Jobs, and Elon Musk, have emerged from the tech industry. This proves that transformational leadership maximizes the full potential of employees and enables companies to reach unprecedented levels.

A good leader should not only be creative and innovative but also a good communicator who inspires and motivates people to follow them. They need to be responsible and accountable leaders who run businesses ethically, work within established policies and procedures, and set clear goals with great perseverance to achieve them. Additionally, they should be capable of making productive decisions and always be prepared to manage complex situations.

References

Akhil Babbar, R. J. (11 4, 2023). Why most digital banking transformations fail-and how to flip the odds. Retrieved from McKinsey & Company: https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/tech-forward/why-most-digital-banking-transformations-fail-and-how-to-flip-the-odds

Armstrong, M. (25 7, 2022). Infographic: Why People Are Quitting Their Jobs. Retrieved from Statista Daily Data: https://www.statista.com/chart/27830/reasons-for-quitting-previous-job/

Dr Rebecca Newton, P. A. (n.d.). How to Become a Transformational Leader. Retrieved from LSE Online: https://www.lse.ac.uk/study-at-lse/online-learning/insights/how-to-become-a-transformational-leader

Gavin, M. (31 10, 2019). Leadership vs. Management: What’s the Difference?: HBS Online. Retrieved from Business Insights Blog: https://online.hbs.edu/blog/post/leadership-vs-management

Homage to Steve Jobs – A Pioneer of Function and Form. (12, 2011). Retrieved from The World Intellectual Property Organization: https://www.wipo.int/wipo_magazine/en/2011/06/article_0008.html

Landry, L. (04 10, 2018). 6 Characteristics of an Effective Leader: HBS Online. Retrieved from Harvard Business School Business Insights Blog: https://online.hbs.edu/blog/post/characteristics-of-an-effective-leader

Matt Weinberger, A. H. (25 02, 2020). Steve Jobs would have been 65 on Monday. Here’s how the late Apple CEO saved the company from disaster and set it on the path to a $1 trillion valuation. Retrieved from Business Insider: https://www.businessinsider.com/steve-jobs-apple-photos-2017-1

McKinsey & Company. (n.d.). The secrets to transformation success. Retrieved from McKinsey & Company: https://www.mckinsey.com/featured-insights/mckinsey-live/webinars/the-secrets-to-transformation-success

Miranda, D. (27 4, 2023). 10 Management Styles Of Effective Leaders. Retrieved from Forbes: https://www.forbes.com/advisor/business/management-styles/

Richter, F. (21 12, 2016). Infographic: Apple’s Growth Since Re-Hiring Steve Jobs 20 Years Ago. Retrieved from Statista Daily Data: https://www.statista.com/chart/7330/apple-revenue-since-1997/

Sayyadi, M. (20 12, 2021). All Good Technology Managers Are Transformational Leaders. Retrieved from InnovationManagement: https://innovationmanagement.se/2020/06/11/all-good-technology-managers-are-transformational-leaders/

St. Thomas University. (25 11, 2014). What is Transformational Leadership? How New Ideas Produce Impressive Results. Retrieved from STU: https://online.stu.edu/degrees/education/what-is-transformational-leadership/

The Economic Times. (16 08, 2023). Bureaucratic Leadership: Characteristics, Pros, Cons, and Notable Leaders. Retrieved from The Economic Times: https://economictimes.indiatimes.com/jobs/mid-career/bureaucratic-leadership-characteristics-pros-cons-and-notable-leaders/articleshow/102773405.cms

The World Intellectual Property Organization. (12, 2011). Homage to Steve Jobs – A Pioneer of Function and Form. Retrieved from The World Intellectual Property Organization: https://www.wipo.int/wipo_magazine/en/2011/06/article_0008.html