Understanding Leadership Styles and Situational Leadership Dynamics

In today's complex business environment, effective leadership isn't about adopting a single approach—it's about developing the versatility to adapt your leadership style to match the situation at hand. For founders and senior executives navigating high-stakes decisions and leading diverse teams, this adaptability isn't just beneficial—it's essential.

"The key to successful leadership today is influence, not authority." — Ken Blanchard

The Leadership Style Spectrum

Great leaders understand that different situations call for different approaches. While many leadership frameworks exist, most leadership styles fall somewhere along two key dimensions:

• Directive vs. Supportive: How much direct guidance versus autonomy you provide

• Task-oriented vs. Relationship-oriented: Whether you prioritize accomplishing objectives or building connections

From these dimensions emerge several distinct leadership styles:

Directive Leadership

Characterized by clear instructions and close supervision, directive leadership works well in crisis situations, with inexperienced team members, or when precision is paramount. As a founder facing a critical product launch deadline or a senior executive managing a compliance issue, this approach provides the clarity and structure needed for immediate action.

Real-world example: When Alan Mulally took over as CEO of Ford Motor Company in 2006, the automaker was heading toward a $17 billion loss. He implemented a highly directive leadership approach, instituting weekly business plan review meetings where executives had to present color-coded progress reports (green for good, yellow for caution, red for problems). Initially, everyone showed green despite the company's dire situation. Mulally applauded the first executive who showed red, establishing a culture where problems could be acknowledged and addressed. This directive approach helped turn Ford around without requiring government bailouts during the 2008 financial crisis.

Participative Leadership

This style involves team members in decision-making while maintaining final authority. It leverages collective intelligence and fosters engagement, making it ideal for complex problems requiring diverse perspectives. For organizations navigating market shifts or implementing strategic pivots, this approach can uncover invaluable insights while building buy-in.

"None of us is as smart as all of us." — Ken Blanchard

Real-world example: When Satya Nadella became CEO of Microsoft in 2014, he shifted the company from its traditional top-down leadership style to a more participative approach. He encouraged open dialogue across hierarchical levels and implemented "hackathons" where any employee could propose and develop new ideas. This participative approach helped transform Microsoft's culture and business model, leading to its remarkable resurgence and over $2 trillion market valuation.

Delegative Leadership

By empowering highly capable team members with significant autonomy, delegative leadership builds confidence and develops future leaders. This approach is most effective with experienced teams tackling familiar challenges or innovation initiatives where freedom fosters creativity.

Real-world example: Google's famous "20% time" policy—where engineers were encouraged to spend one-fifth of their work time on projects of personal interest—exemplifies delegative leadership at scale. This approach led to the development of Gmail, Google Maps, and other transformative products. While the formal policy has evolved, the delegative philosophy continues to influence Google's approach to innovation.

Transformational Leadership

Focused on inspiring and motivating through vision and personal connection, transformational leadership excels during organizational change, culture-building, and long-term strategic initiatives. For leaders guiding companies through significant transitions or building purpose-driven organizations, this approach aligns teams around shared meaning.

"Leadership is the capacity to translate vision into reality." — Warren Bennis

Real-world example: When Howard Schultz returned as CEO of Starbucks in 2008, the company was struggling with declining sales and diluted brand identity. Schultz employed transformational leadership by reconnecting the organization with its original mission and values. He temporarily closed all U.S. stores for barista retraining and refocused the company on the customer experience rather than rapid expansion. This vision-centered approach revitalized the company and set it on a path for sustained growth.

Servant Leadership

By prioritizing team members' growth and well-being, servant leadership builds deep loyalty and psychological safety. This approach cultivates environments where innovation thrives and team members willingly contribute discretionary effort, making it particularly valuable for knowledge-intensive industries and creative fields.

"The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant." — Max De Pree

Real-world example: Herb Kelleher, co-founder of Southwest Airlines, embodied servant leadership through his unwavering focus on employee well-being. He famously spent holidays helping baggage handlers, served drinks on flights, and knew many employees by name. This approach created an organizational culture so strong that Southwest became the most profitable airline in the industry while maintaining among the highest employee satisfaction rates. When asked about his priorities, Kelleher would say: "Employees first, customers second, shareholders third"—a radical approach that proved remarkably effective.

The Situational Leadership Framework

The situational leadership model, developed by Paul Hersey and Ken Blanchard, offers a structured approach to adapting your leadership style based on team member development levels across two critical dimensions:

• Competence: The skills, knowledge, and experience required for the task

• Commitment: The confidence, motivation, and engagement toward the task

This creates four distinct development levels, each calling for a different leadership approach:

1. Low Competence, High Commitment

2. Some Competence, Low Commitment

3. High Competence, Variable Commitment

4. High Competence, High Commitment

"Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others." — Jack Welch

Situational Dynamics in Action

Understanding when to shift between leadership styles requires recognizing critical contextual factors:

Organizational Lifecycle Stage

• Startup Phase: Typically requires more directive and transformational approaches to establish direction and build initial momentum

• Growth Phase: Often benefits from participative and coaching approaches to scale capabilities and systems

• Maturity Phase: May require delegative or servant approaches to innovate and maintain engagement

• Transformation Phase: Usually demands transformational leadership to navigate significant change

Real-world example: Reed Hastings demonstrated remarkable leadership adaptability throughout Netflix's evolution. In the startup DVD-by-mail phase, he provided clear direction and vision. During the transition to streaming, he adopted a more participative approach, gathering insights from across the organization. As Netflix matured into content creation, he shifted toward a more delegative style, empowering creative teams with significant autonomy. This ability to adapt his leadership style to the company's evolutionary stage has been crucial to Netflix's continued reinvention.

Team Composition

• Diverse Experience Levels: May require different approaches with different team members

• Geographic Distribution: Often benefits from clearer direction and more structured communication

• Cultural Background: May influence how different leadership approaches are perceived

Nature of the Challenge

• Crisis Scenarios: Typically call for more directive approaches

• Innovation Initiatives: Usually benefit from delegative or participative approaches

• Culture-Building Efforts: Often require transformational or servant approaches

"The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things." — Ronald Reagan

Real-world example: During the early days of the COVID-19 pandemic, Jacinda Ardern, then Prime Minister of New Zealand, demonstrated masterful situational leadership. She began with a transformational approach—articulating a clear vision of "going hard and going early" to eliminate rather than just contain the virus. She then shifted to a highly directive approach for lockdown implementation, providing detailed guidance with compassion. Throughout the crisis, she maintained regular, transparent communication, combining scientific facts with emotional reassurance. This ability to adapt her leadership style to evolving pandemic conditions contributed significantly to New Zealand's initially successful COVID response.

Developing Leadership Versatility

To build your capacity for situational leadership:

1. Expand Your Awareness

2. Build Your Repertoire

3. Improve Your Diagnostic Skills

4. Cultivate Adaptability

"Become the kind of leader that people would follow voluntarily, even if you had no title or position." — Brian Tracy

Personal anecdote: As a leadership coach, I worked with a technology founder who struggled when her company grew from 15 to 150 employees in eighteen months. A brilliant product visionary with a naturally directive style, she became overwhelmed trying to maintain control over every decision. Through our work together, she recognized that her leadership approach needed to evolve with the company. She began consciously practicing delegation with her experienced team members while maintaining more guidance for newer functions. The most powerful moment came when she admitted to her leadership team that she was working on becoming a different kind of leader—one who empowered rather than directed. This vulnerability actually strengthened her leadership position and accelerated the company's development of a more scalable leadership culture.

The Leadership Versatility Advantage

Organizations led by versatile leaders consistently outperform their peers. This advantage stems from:

• Optimized Performance: Teams receive the leadership approach best suited to their current needs

• Accelerated Development: Team members progress faster when leadership adapts to their growth

• Enhanced Resilience: Organizations navigate varied challenges more effectively

• Stronger Culture: Teams develop greater trust in leaders who adapt to meet their needs

"The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not a bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not arrogant; have humor, but without folly." — Jim Rohn

Moving Forward

The most effective leaders don't just adopt different styles—they develop the judgment to know when each approach serves their teams best. By expanding your leadership repertoire and sharpening your ability to read situations, you'll make more nuanced leadership choices that drive both results and team development.

As you reflect on your leadership approach, consider: Which style feels most natural to you? Which situations consistently challenge your preferred approach? And most importantly, what one shift in your leadership style might most benefit your team right now?

This article is part of the Transformative Leadership newsletter series, dedicated to helping founders and senior executives develop the leadership capabilities needed to navigate today's complex business landscape.