Leadership is less about you and your needs, and more about those of the teams you lead and the organisation you represent. But what style of leadership is most effective – is it better to be a ruthless and aggressive leader like Jack Welch who consistently achieved significant financial results for General Electric when he was CEO? Or is it better to adopt a more holistic, people-centric approach that is practised by the likes of Tim Cook, CEO of Apple?
Whatever your view, the fact remains that as a leader your job is to focus all your energies on achieving one simple thing – a healthy return on investment. How that is manifested in practice is largely of little concern to shareholders and other investors, providing the end result is a positive impact on the bottom line.
But while the take-no-prisoners style of leadership may derive impressive results in the short term, maintaining this over the longer term is more of a challenge. Evidence suggests that sustainable results are better achieved by leaders who take a balanced approach – one that is focused on garnering the support of their people whilst remaining focused on the cash.
In his book Primal Leadership, Daniel Goleman – the man credited with coining the term ‘emotional intelligence’ – argued that the best leaders are able to adapt their leadership style to the circumstances.
Goleman studied 3,000 managers to identify the leadership styles that have the greatest impact on an organisation’s financial performance and his findings point to six different styles of leadership that can be found in organisations across all industry sectors:
Each style, he argues, has a direct impact on the working atmosphere of the organisation that is unique unto itself. Coercive leaders, for instance, rule with an iron first and would typically say ‘Do as I tell you’. Affiliative leaders are concerned with creating an emotional attachment between colleagues and the organisation itself.
Coaching leaders have one eye on the here and now and the other on developing the leadership pipeline of the organisation. Democratic leaders aim to get employee buy-in and make them feel part of the decision making process, typically asking things like ‘What do you think?’ Pacesetting leaders for their part demand a certain level of excellence and self-direction among their teams, whilst Commanding leaders – as the name suggests – are militaristic in style and best suited in a crisis.
Goleman’s research found that a manager’s leadership style is responsible for 30% of an organisation’s bottom-line profitability – that’s far too high a number to ignore!
Of course leaders can switch between styles depending on the situation they may find themselves – if there is a sudden crisis then assuming a Commanding style would be a good option. Whilst a Democratic style may be more appropriate if an organisation is involved in a merger or acquisition whereby staff need to come together and forge a set of commonly agreed goals.
Whichever style is employed, there remains a bedrock of key fundamentals that all leaders must always adhere to. These are:
- Ensuring everyone recognises, understands and supports the vision, mission and goals of the organisation
- Provide an environment whereby everyone, regardless of pay grade, has the ability to realise their personal career ambitions with the organisation
- Enable everyone to have a voice and understands how their role plays an important part in the overall success of the organisation
Achieving a strong set of financial results is ultimately what senior leaders will be measured on. But no matter how fantastic you may be, you will not achieve these results on your own.
Be mindful of the impact that your actions will have on the very people who will help you achieve your targets. You need the support of your teams, so it is important to be self-aware of your own strengths and weaknesses and recognise those in others.
There are umpteen numbers of books and courses available that promise to hold the key to what makes an effective leader. But as the ancient Chinese proverb says, ‘Tell me and I’ll remember for an hour, show me and I’ll remember for a day but, let me do it and I’ll remember forever’ – you never really know what it takes until you actually start doing.