By Michael Feder
Strong leadership is a crucial part of any business and its chances for success. That said, every business is different. A CEO who successfully brings one company to the top of its industry may flounder when placed at the helm of another organization.
Identifying the leadership style appropriate to an organization can help a leader forge a path toward success. This style will define the ways that a leader guides, inspires and oversees their employees. Does the organization require a micro-manager who gets involved in every detail? Or should a manager be hands-off to the point of being absent? Or maybe there’s something in between?
According to a 1939 study conducted by psychologist Kurt Lewin, there are three main types of leadership styles:
A laissez-faire leadership style has the potential to empower creative employees … or leave them feeling directionless. Understanding the characteristics, strengths and weaknesses of laissez-faire leadership can help managers understand if it is right for their organization.
Laissez-faire leadership is all about delegation. Here are some characteristics of this hands-off leadership style.
With this kind of delegative leadership, it’s not uncommon for subordinates to make many of their decisions independently. Leadership may lay out basic expectations, but they are not involved in many of the decisions that produce their expected results. So long as employees do not do anything to negatively affect the company, they are generally given guidance and free rein to make decisions and come up with new ideas.
It isn’t all about freedom, however. Laissez-faire leaders expect that employees can handle problems and challenges as they arise. Accordingly, employees often have substantial resources at their disposal. They can make decisions quickly and utilize those resources without asking for permission. Not surprisingly, there is a lot of trust in businesses organized around a laissez-faire principle.
Due to the large amount of responsibility delegated to their subordinates, laissez-faire leaders have to be very careful when building their team. Successful delegation leadership requires strong team-building instincts and the ability to see their employees’ particular strengths and weaknesses. This allows leaders to construct the team in a way that ultimately achieves the organization’s mission.
Employees and leaders working within a laissez-faire organization enjoy a number of advantages in their work. These include:
When employees are allowed the freedom to work toward set business goals in the way that they choose, it can help them feel more energized and productive. Employees often know their own strengths, and laissez-faire leadership plays to those strengths.
Within a large organization, there are thousands of decisions that have to be made every day. Allowing employees to make many of those decisions is not just about organizational efficiency, however. It gives employees the opportunity to come up with new ideas and implement them.
This can be subtle (such as the particular arrangement of a graphic design) or obvious, but when these decisions are made by the individual employee without being submitted for leadership approval, it can encourage spontaneity and invention.
By delegating tasks that don’t require their particular attention, laissez-faire leaders can focus their energy on the things that do. This might mean recruiting new clients, making executive decisions or strategizing how to grow the organization.
As an employee, it may sound nice to be given more freedom in your work. As a leader, it may sound nice to delegate work to focus on other things.
Unfortunately, a laissez-faire approach is not always what it’s cracked up to be. When misapplied or applied to the wrong organization, it can undercut business goals in the following ways:
A hands-off leader can very easily be seen as a neglectful leader. Some decisions do require a strong executive decision-maker, like when there is an emergency or a new opportunity. Laissez-faire leadership can suggest that no one is steering the ship, and that can sink team morale.
Laissez-faire-managed employees can also feel defeated when they are delegated responsibilities for which they are ill-equipped. This can make them feel set up to fail and undercut their confidence.
While delegative leadership can increase efficiency, it can also have the opposite effect. When decisions that require a strong, singular executive voice are broken apart and delegated to a number of employees, it can be difficult to work efficiently. That inefficiency can be exacerbated during periods of crisis or turnover.
Laissez-faire leadership requires strong team-building skills, but even great leaders cannot anticipate every detail about how a team will work together. By giving employees more responsibility, leaders can inadvertently increase the possibility of one employee’s activities conflicting with another’s.
For example, if two employees come up with totally different ideas for a marketing campaign, they will likely need an executive voice to decide which direction to take. A completely hands-off leader may leave these two to sort it out between themselves, though, and that can become both negative and unproductive.
There are numerous examples of successful laissez-faire leaders, particularly in the world of business administration.
At the turn of the last century, a number of businesspeople made their fortune with novel approaches to production and management. One of the classic examples of a 20th-century businessperson is Andrew Mellon (1855-1937), a banker-turned-industrialist who became one of the wealthiest people in the United States.
Aspects of laissez-faire leadership can be found in many aspects of Mellon’s business philosophy. Instead of managing every detail of his business interests, he hired managers he could trust. Mellon gave these managers a large amount of autonomy to make the decisions they thought best.
This leadership style allowed Mellon to focus on the big picture: expanding his interests well beyond banking and into production, politics and art collecting.
Serving as the chairperson and chief executive of Berkshire Hathaway, Warren Buffett is the perfect example of how the laissez-faire leadership style can be applied to the modern business landscape.
Dealing largely with investments, Berkshire Hathaway’s success depends on finding opportunities before its competitors. To this end, Buffett makes a point of promoting employees who can work autonomously and jump on opportunities when they arise.
This approach to hiring and management contributes to Berkshire Hathaway’s dominance as a multinational holding company and Buffett’s personal wealth, which exceeds $110 billion.
Whether the laissez-faire leadership style is right for a particular organization will depend on several factors, including:
There are also some personal characteristics that will make a person more successful with this type of leadership style, such as:
Figuring out the leadership style that is best suited for your organization can take time. Sometimes, mixing and matching aspects of different leadership styles can be the solution, too. After all, innovation, whether in leadership strategy or day-to-day work, is often the key to success.
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