The Strengths and Weaknesses of 4 Distinct Leadership Strategies A combination of guidance, transparency and collaboration will help leaders guide in the digital age.
By Jake Croman
Opinions expressed by Entrepreneur contributors are their own.
In any industry, leadership means changing with the times. From the production era to the relationship era, leaders have transitioned the way we work according to modern inventions and social trends.
The disruption of new technologies often signals the need to adapt to new approaches; improved ways of living, playing, working and leading. Emerging innovations like AI and big data accelerate the way we understand our world and evolve within our professional lives. Naturally, leadership styles will change for the modern day entrepreneur.
While the digital sphere can improve workers' autonomy in the workplace, entrepreneurs will also need to reassess their leadership styles to spearhead successful business strategies and create work cultures that sustain scalable companies.
According to researchers at the University of Pennsylvania, four types of leadership styles can help entrepreneurs fully harness the digital landscape that has reshaped business models and behaviors for the better. For context, let's first understand why new leadership is needed in today's digital environment:
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Change leadership roles in the digital era
Change is imminent to stay innovative in business. The new digital environment, in particular, allows people to become hyper-connected and informed at all hours of the day through tools like internet of things (IoT), artificial intelligence (AI) and big data's machine learning features. These tools allow employees to demand ownership, recognition and impact within their working environments. Plus, today's customers also want to take part in the marketing and development processes which make services more personalized and integrated into their everyday lives.
Entrepreneurs who encourage agile and transparent company practices can empower their employees and consumers. The importance is amplified as the latest Edelman Trust Barometer shows 60 percent of those surveyed believe that building trust in the company should be the CEOs most important role. But, the skillset also allows CEOs to solve problems and respond to developments more efficiently rather than forcing employees to standby for insight or direction from the top down. Leaders can create the necessary framework for change and comprise 30 percent of a company's profitability.
As changes develop, leaders will need to use a combination of technical, pragmatic, and emotional intelligence to properly assess growth to maintain successful companies. Depending on your industry, these four leadership styles -- and an actionable combination of them -- are ripe for the taking:
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Commander
Ever powerful and pragmatic, the commander leadership role determines which goals to focus on and directs others on how to accomplish them. In industries with machinery or automation -- which automatically demands orders -- or with direct subordinate workers who execute simple tasks, this role remains key. Elon Musk is a good example of this type of leadership style.
Commanding roles are less effective with employees or customers who wish to be a collaborative part of the process, promoting that their choices integrate into the product or service. However, this type of leadership style features high marginal cost and little moral standing for participation or dedication to company mission. If you're based in a field with manufacturing or commoditized goods, this leadership style more aptly allows you to be a commander with direct bandwidth.
In his research, Dr. Stephen Bungay assesses that command principles should unite with leadership and management styles that help organize and control resources and that includes supporting teamwork and the individual. Overall, the commanding leadership style is optimized when utilized during moments that call for responsibility, authority and duty of direction.
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Communicator
Recent reports highlight that 69 percent of leaders are scared to talk to their employees. All leaders need strong communicative abilities. Those who religiously practice open communication can inform their employees on what their strategies, principles and plans entail and how they enable the company to function more efficiently.
Communicators set the mission and the goal plan for success, communicating their vision to inspire and create a strong sense of value and dedication to the company goal. This type of leadership style effectively allows customers and employees to understand company status and empowers them to scale action with your vision. Often, it doesn't encourage innovation.
This style best aligns with services firms where all employees understand they must fulfill a mission. Out-centric communication principles harnessed by leaders can help leaders focus on developing teams and individual workers so that everyone is a valued contributor.
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Collaborator
The collaborative leaders of the future works with both customers and employees to achieve goals. This leadership style is less hierarchical and creates more valued input from consumers and workers at ground zero. It enables each side to perform self-efficiently and to share ideas more readily.
This leadership modality is highly innovative and drives the creation of intellectual capital. Innovators like Victors and Spoils, a collaborative ad agency, or Merck, which offers crowdsourcing competitions showcase how highly collaborative offices work. A 2016 Deloitte Transitioning to the Future of Work and the Workplace study reports that 40 percent of executives expect to increase communication and collaboration between higher management and workers.
The shift from "top-down" structures fosters future innovation for organizations. The Center for Creative Leadership similarly identifies collaboration as a necessary leadership asset in the future.
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Co-creator
Co-creative leaders acknowledges all voices and perspectives in the workplace. Like the collaborative leader, the co-creating leader allows stakeholders to pursue their individual goals in tandem with the goals of the organization. As a result, rapid scaling, due to high levels of participation and innovation make it a stable organization and working environment. With ample amounts of direction, the co-creator gives the autonomy that the worker needs to get the job done. Network companies like Airbnb and Uber use this model to share value via both the company's and the network's participants. Like Uber's model, it lowers marginal costs of marketing, sales and distribution when creating with your stakeholders. The research shows that co-creation should be implemented more in leadership.
These four solutions-oriented styles offer varied results due to their scalability, how efficiently each type of business can innovate, or whether a leader controls the value or its shared with stakeholders. Most leaders apply several different styles effectively, though, its reported that the co-creation leadership role is rare. Using the right leadership styles in a well-balanced way is hard. Great leaders like Steve Jobs used these four characteristic traits.
For example, while Steve isn't remembered for his collaborative nature at work, his business decisions and rhetoric reflect a flexible insight involving collaborative business operations. As a commander, he had a specific design vision. As a communicator, Jobs's hallmark manifested through his inspiring keynote speeches. Regarding collaboration, Jobs worked with others to catapult the Apple product to a new level of success. As a co-creator, he built a developer network unlike any other. Overall, this leadership style allows CEOs to engage workers and harness workers' knowledge best participate and innovative.
Downloading and democratizing digital leadership styles
Using Jobs as an example shows how hard co-creation can be in today's world. Yet, the most valuable and profitable businesses today are network-based models. But, what does it take for a leader to co-create? The ability to relinquish control and the will to share created value with the crowd. When Twitter was created, it was solely used as an internal tool within their company network. The product discovery changed its purpose and now its a significant role in socio-political movements, pop culture and business.
Companies like Uber and Airbnb share revenues with their partners. Enthusiastic engagement and progress rely on their partners including hosts, creators and drivers. These multi-billion dollar startups are not the only companies that use the new leadership model. Established companies like Visa are also jumping on the bandwagon. Because of widespread participation, these companies can survive through participation, co-creation and co-ownership of members.
Democratizing attitudes are going to lead the wave of the future when it comes to the leaders of tomorrow. As technology and business evolve, leaders will be able to assess the world more readily and become more innovative with the people that make up their industry. Like they say; it's a new dawn, a new day and your customers and employees should be feeling good.
