Before we look at the next two leadership styles, remember, a leadership style is the way a person leads other people. And remember there is no right or wrong leadership style, but a leadership style can be used incorrectly with certain people or situations.
Transactional leadership- One of the most common leadership styles, transactional leadership outlines a situation where there is an understood “transaction,” namely, team members agree to obey their leader in exchange for financial gain. Leaders reward for compliance and “punish” for work that is subpar.
This style of leadership may sound a bit harsh, but there are benefits, specifically the fact that transactional leadership clarifies everyone’s roles from the beginning so there is absolutely no confusion once a project begins. Transactional leadership is focused on group organisation, establishing a clear chain of command and implementing a carrot-and-stick approach to management activities.
One negative to this particular style is that team members often feel little job satisfaction and no room for real growth, and this can lead to high employee turnover. In general, this type of leadership style is appropriate when a manager needs to oversee short-term tasks.
Example - Bill Gates: The founder and Chairman of Microsoft is known to be one of the most respected and successful transactional leaders because of the way he dealt with his employees. Bill Gates is known to not go easy on his employees till he is satisfied with the answers they give him. At the same time, he gives employees free hand to work as they want provided they achieve the targets they are given.
Servant leadership- Servant leaders live by a people-first mind-set and believe that when team members feel personally and professionally fulfilled, they’re more effective and more likely to produce great work regularly. Because of their emphasis on employee satisfaction and collaboration, they tend to achieve higher levels of respect.
A servant leader is an excellent leadership style for organizations of any industry and size but is especially prevalent within non-profits. These types of leaders are exceptionally skilled in building employee morale and helping people re-engage with their work.
The servant-leader is “servant” first; it begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is “leader” first, perhaps because of the need to satisfy an unusual power drive or to acquire material possessions.
A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power and puts the needs of others first and helps people develop and perform as highly as possible. However, detractors suggest servant leaders lack authority and suffer a conflict of interest by putting their employees ahead of business objective
Example - Balfour Beatty: It’s surprising to have a construction company with a servant-leadership centre but Balfour Beatty CEO Eric Stenman firmly believes that’s the way business should be done. Stenman’s focus has always been on the “personal and professional success of all his employees.”
Harvey S. Firestone said- “The growth and development of people is the highest calling of leadership.”
The writer is a Kigali Based business consultant and strategist.
This article is the sixth of a series on leadership by the author and will run exclusively on Business Times for the coming weeks