5 styles of leadership: qualities of an effective leader in the 21st century

11/05/2023 | Santander Universidades

Analysing the qualities of an effective leader and the most common leadership styles became a focus of study several decades ago. Meanwhile, the concept of female leadership has gained importance in recent years. In fact, according to the 2019 report The Business Case for Change, published by the International Labor Organization, the presence of women holding leadership positions at organisations has a clear positive effect. It is therefore important for companies to implement equality policies in order to guarantee that female talent is found through all levels of hierarchy and, in particular, roles of greater responsibility.

Why do some people become leaders and their ideas are taken on board, where others fail or resort to different means to assert their authority? What makes leaders as varied as Steve Jobs, Angela Merkel, Mahatma Gandhi or Michelle Obama so special? This is a key question given what's at stake here: identifying the right person capable of leading a team to success.

With advances in organisational terms and the disruption of new skills, it is more important than ever to hone the interpersonal skills that companies are crying out for in their future leaders.

Style and qualities of an effective leader: a question of context 

There are several criteria with which to classify leadership styles and to define the qualities of an effective leader. Theories on this area of study have evolved greatly. In the beginning, the idea of a leader with innate abilities (mainly charisma, intelligence and social skills) was expounded, while everybody else was simply a follower.

Nowadays, when analysing leadership styles, besides the abilities of the leaders themselves, several variables are also taken into account, such as the background context or the specific sector in question.

In the study The Business Case for Change, mentioned above, a clear example is given that breaks with the traditional gender standards at organisations. According to the report data, which sampled 13,000 companies around the world, some 75% of businesses in the private sector that have opted to include women in leadership roles have seen an increase in their revenue. 

In fact, in a changing environment, the key to achieving this objective doesn't lie in areas such as the training, experience, gender or age of the worker concerned, but in their ability to adapt to each situation, exercising the leadership needed by the company at any given time.

The most common leadership styles

There is no perfect leadership style or leader; a leader's effectiveness will depend on the circumstances:

  • There are leaders with the sufficient skills to guide others through crisis scenarios, but who prove too authoritarian even when projects are on track. 
  • Others have excellent organisational skills, but lack when it comes to negotiations.
  • There are also those who seek to come across as democratic to an inexperienced team that needs someone to make decisions.

Although there is no such thing as the ideal leadership style, below are the 5 most common types:

1. Natural-born leaders

Those who exercise de facto leadership, without requiring a title to back them up. These tend to be highly charismatic types, able to confidently convey their ideas and with the rhetoric skills to convince others to follow them.

As George A. Sparks notes in Charismatic leadership: Findings of an exploratory investigation of the techniques of influence, these leaders have "the ability to speak and act in such a way that those following are inspired to move to action and share in the vision of the leader" in the same way an audience watching a great actor comes to believe the role being played.

2. Authoritarian leaders

They maintain their leadership from the top down, always from a position of power. This management style does not allow decisions to be questioned nor does it take the opinions of others into account.

Although this leadership style may be effective in certain circumstances (for example, when subordinates refuse to take orders or lack of motivation or experience), it can also discourage workers and make them feel undervalued.

 3. Participatory and democratic leaders

Characterised by encouraging joint decision-making, these leaders take the opinions of all team members into account. Participatory leaders enjoy the support of the entire team because this, in turn, feels that it's being listened to.

This is one leadership style that improves talent retention, i.e., a company's ability to make the most aligned and valuable staff stay at the organisation instead of moving to another where they're offered better conditions. However, it can also prove less efficient and slower when there are irreconcilable viewpoints and the leader has weak negotiating skills.

4. Laissez-faire leaders

These leaders delegate a large part of the decision-making to staff empowered to act. In this way, the leader merely allocates the tasks and monitors to ensure objectives are met in line with the plan.

This leadership style is suitable for teams with highly qualified members and usually involves high levels of creativity. However, there are many scenarios where this management style won't be ideal, such as in cases where employees are unable to set or meet their own deadlines.

5. Transformational leaders

This style is appropriate for organisations going through change processes. In this case, the role of the leader is to communicate the vision of transformation and the objectives that must be met, inspiring others to achieve them too.

Given that it focuses on intangible values, this style may prove ineffective at solving unexpected problems in the short term.

Qualities of an effective leader

Regardless of the different leadership styles we might come across, there are several factors common to all of them. In this sense, these are the qualities of an effective leader:

  1. Self-confidence. A person who aspires to be a role-model for others needs to trust in their own leadership ability. They must be able to recognise their own mistakes and limitations and focus on finding solutions.
  2. Communication skills. A good leader should be able to convey and share their ideas. Ideally, they will develop assertive communication skills, creating a safe space for their staff to express themselves. Listening and being empathetic are fundamental qualities in any of the various leadership styles.
  3. Organisational skills. Another of the main aspects common to all types of leadership is planning and organisational skills. A leader must guide others to achieve efficiency and complete projects, alongside the proper management of available resources.
  4. Responsibility. It is essential for leaders to take responsibility for the decisions they make, regardless of the outcome. Otherwise, they will only foment distrust in the rest of the team, losing credibility and authority.

Qualities companies look for in a leader

While training is gaining traction, it is just as important as developing interpersonal intelligence, defined by the psychologist Howard Gardner as an ability to understand the intentions, motivations, and desires of others and work effectively with them.

Here are the 5 interpersonal qualities of an effective leader that companies seek:


Companies need people who can act as role-models of stability and security at the company. These leaders will be people to whom others can turn in the event of questions about what to do or which decision to make.

Ability to manage teams

Companies value leaders who know how to manage teams and foment rapport between staff members. In short: communications must be fluid. It's important to remember that interpersonal relationships in the workplace are vital for success.

Public speaking skills

Client meetings, internal staff meetings, and conferences are all common occurrences for any team leader. No matter what the scenario, one of the qualities of an effective leader is the ability to speak in public to clearly convey their ideas and thus boost trust in their decisions.

So, to exercise extraordinary leadership, it's essential to master the different styles and draw from a range of strengths. The good news is that all of the above requirements can be picked up with specialised training. There are so many courses available that you can choose whichever one best suits your particular needs.

Get trained in leadership

The statistics are clear: fostering women's leadership at all hierarchical levels of an organisation is beneficial for companies.

An increase in profits is not only linked to the presence of women in managerial roles - the number of roles filled across the entire company is also a decisive factor. This is highlighted in the aforementioned report, The Business Case for Change, the results of which indicate that to reap the positive effects of female leadership, the percentage of women in management posts should be at least 30%. In the same vein, the emergence of role-model women leaders is vital to promote equality within organisations. The same report confirms that companies with a female CEO have greater gender diversity in management roles.

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This is a unique opportunity to take an in-depth look at the three pillars of business management and leadership taught in an MBA: strategy, finance and leading teams. Additionally, you will be supported by the best mentors and facilitators from the LSE and you will be able to interact with your peers via weekly forums and group dynamics. The course has no cost for the beneficiaries and it is not necessary to have a university degree, nor to be a Banco Santander customer.

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