Business leadership: Types of leadership, examples and definition 

Business leadership is a transcendent element for the success of any company. Behind every leader, there is a demonstration of a company's values and goals. Also, leadership types denote effective communication between team members, organizational culture, the hunger to achieve the purposes and impact their different stakeholders. 

A leader must be a ship captain capable of guiding his team to work and reach their destination in the midst of turbulent waters. As the English writer and motivator Simon Sinek says, “A successful leader is one who not only sees where we are, but also where we should go”.

To have good business leadership it is necessary to have qualities that can be developed. There are also actions, both individual and collective, that will help refine and exercise better business leadership for the entire company.  

Today there are many types of business leadership. It is no longer just a matter of hierarchies. And of course! The concept is very different leader than that of boss. In Latin America, this great difference is present. 

According to the latest study by the job search platform, Laborum, 62% of Latin American countries identify their boss as a leader. In the country where this situation occurs most is in Peru, where 73 % of workers consider this. They are followed by Ecuador with a 72%, Panama with a 64%, Argentina with a 56% and Chile closes the ranking with a 54 %, being the country with the lowest figure on the continent. 

But how to improve business leadership and prevent becomes a wave of resignations? Discover in this Ninja Excel article the main scope of this concept. 

What does business leadership mean? 

We define the concept "business leadership" as all the actions and qualities of a person to guide a team in order to reach a goal, influence the behaviors of the members and make decisions (from the simplest to the complex). 

This implies “a dynamic relationship between the people who lead and the people who are led.”. According to Study.comIf done effectively, leadership can be a motivating and satisfying experience for everyone involved. But then, you will surely ask yourself, how to have effective business leadership? Let's keep reviewing. 

Why is business leadership important?: 9 reasons

Business leadership is important since it can impact the motivation of workers, commitment to the company and achieving the proposed goals.. This is how, by developing leadership qualities you can impact

1. Have a accurate communication of objectives and processes. 
2. Address expectations and deliver a response.
3. Create environments where your team will feel valued and comfortable.
4. There are studies where they affirm that democratic leadership implies an increase in the productivity of 46 %. 
5. Reduction of errors; Followers tend to want to do quality work if they know they are accountable to a respected leader.
6. Increased trust among team members.
7. Greater commitment to a team's mission.
8. Be able to ensure that all members are aware of the general strategies.
9. Communicate individual efforts and how they impact achieving the goal.  

Qualities of a business leader

To summarize, the qualities of great business leadership are: 

1. Lead by inspiration, not by domination.
2. “Preach and practice.” The example he sets for us is part of his daily work.
3. Practice empathy. 
4. Flexible when it should be. 
5. Great effective communication. 
6. Manages to resolve conflicts and turns obstacles into opportunities. 

6 types of business leadership

There is no type of leadership that is better or worse. Each type of leader must adapt to the company culture and the objectives to be achieved. Therefore, we present the six most common types of leadership. 

Autocratic leadership

What is: Leaders who make decisions by themselves or without the participation of others.

Pro: Decisions are made faster. Manage each member and see whether or not expectations are met. One-way communication

Cons: It can generate stress, fear or poor active listening on the part of workers. 

Democratic leadership

What is: They seek the opinion of team members to take action. 

Pro: encourages feedback and commitment to the team. The leader always ends up making the decision. 

Cons- You run the risk of not meeting the expectations of all workers. 

Transformational leadership

What is: a leadership that seeks to change the form and substance of how daily tasks are conducted. 

Pro: encourages commitment among workers. Encourage dialogue. 

Cons: The leader must respond to workers who do not agree with the type of transformation proposed. 

Transactional leadership

What is: It's just based on the phrase “give and take.” Workers should only complete the tasks that the leader assigns. In these tasks you will always have a bonus or monetary reward. 

Pro: Team motivation is based on the rewards that the company delivers.

Cons: it is poorly adjustable to changes or fluctuations in the company. 

Laissez-faire leadership or let do

What is: This is based on the assumption that workers have the necessary skills for the tasks they must do. Therefore, members make autonomous decisions and manage the workflow. The leader will make the final decision.  

Pro- Encourages autonomy and as a leader, you will observe potential leaders. 

Cons: Not recommended for employees with little experience. 

Bureaucratic leadership

What is: It is based on the performance of tasks through strict policies or procedures. 

Pro: there is monitoring of tasks, which leads to high effectiveness and achievement of goals. 

Cons: generates unpleasant environments and responds to strict monitoring of the chain of command. 

3 Concrete examples of types of leadership 

Below we will leave you some concrete examples of the types of leadership. Let's review!

“How great leaders inspire action” – Simon Sinek

In this talk, the motivator explains how great leaders inspire action through effective communication and emotional connection. He uses examples from leaders like Martin Luther King Jr. and Steve Jobs to illustrate his points.

“The paradox of charismatic leadership” – Jochen Menges

In this talk, Jochen Menges talks about the paradox of charismatic leadership. Also about the risks of narcissistic and inappropriate behavior. Use examples from leaders like Elon Musk and Jeff Bezos to show how they can fall into this trap and how to avoid it.

“How diversity and inclusion drive innovation” – Rocío Lorenzo

In this talk, Rocío talks about the importance of diversity and inclusion in business leadership and how they can drive innovation and success. He uses examples from companies like HP and Airbnb to illustrate his points.

Benefits of having good business leadership 

In the long term, the benefits of having good business leadership will cause the following effects on companies. 

1. Expands the vision of the business, identifying challenges and planning future strategies. 
2. Clarity in goals and what is needed to achieve them. 
3. Develop and boost people's skills and encourage new leaders. 
4. Improves performance and increases competitiveness in the company. 
5. Maintains a good working environment. 
6. He knows how to guide those who have difficulty.
7. Clarity in company processes 

5 practical tips for successful leadership

To ensure successful leadership, Leaders must go beyond active listening, motivating others or being transparent. This can include things like learning to listen to others, motivating employees, being transparent, and communicating effectively. 

For leadership to be successful and have an effect on teams and the company in general, it must combine all the traits described above.  They are key responsible for setting goals, making decisions and managing employees. Thus, to channel it is advisable to push some actions. Here we present practical tips for successful leadership. 

Create security and trust instance

The leader must apply the organizational culture in the actions and relationships between the members of the company. 

Establish links and be considered

The leader must create moments to get to know each team member. Maintain equitable and respectful treatment. 

Use effective communication strategies

Apply frequent communications, but not excessively. Depending on the type of organizational culture of the company, the leader can send emails, informative briefings, work meetings, 5-minute motivational talks. 

Promote training

The Staff training It is an important task in leadership actions. As a leader, you must motivate compliance with the training as an achievement for the workers and profit for the company. 

Reward achievements

Individual and collective successes, awards or achievements should be congratulated, it will produce a feeling of belonging and affection for the worker.