Empowering leaders who give their employees room to think and behave independently are often perceived as more effective than the traditional directive leader who issues specific orders. But according to U.S. researchers, this isn't necessarily so.
In certain types of environments - including fast-moving entrepreneurial businesses – command-style leadership can be more effective, argue Dr. Keith M. Hmieleski and Dr. Michael D. Ensley.
"The empowering style of leadership has been oversold regarding new ventures with heterogeneous teams in dynamic environments," says Dr. Hmieleski, assistant professor of management at the Neeley School of Business at Texas Christian University.
"In fact this combination works terribly."
Hmieleski and his co-researcher from Rensselaer Polytechnic Institute in Troy, NY, claim that this is because people with significantly different backgrounds and patterns of thought and behaviour take too long to reach consensus on goals in business environments requiring rapid action. As a result they miss critical windows of opportunity,
Hmieleski and Ensley surveyed 168 managers at 66 firms from the Inc. 500 list of America's fastest-growing startups. They also surveyed 417 top managers at 154 U.S. firms randomly selected from Dun and Bradstreet.
But the reality, he says, is not that simple. Leadership is contextual and highly complex and both styles of leadership have pros and cons depending on the internal team variables and the external variable of industry dynamism.
Most striking among the findings is that the empowering style of leadership, commonly thought to be most effective with heterogeneous teams in environments of rapid change, was clearly shown to be less effective under those very conditions.
"Fast-moving environments demand fast decisions," said Dr Hmieleski. "That's where directive leadership comes in. A directive leader can rapidly clarify what work needs to be done in the moment and by whom."
As a result, Hmieleski argues that the benefits of directive leadership and the drawbacks of empowering leadership have been downplayed.
Nevertheless, as research published last year by consultants Optima found, employees much prefer their leaders to be people who are willing to nurture, empower and support them, and who are willing to share knowledge and delegate tasks.
Yet in other circumstances, Hmieleski and Ensley found that empowering leadership did come out on top.
In heterogeneous teams in stable environments, empowering leadership shines as the clear choice because stable environments provide time for team members to reach cohesive decisions.
In this sort of environment, directive behaviour can grate on team members and reduce their commitment to the venture.
With teams that are more homogeneous, the researchers found that these effects were reversed. In dynamic environments directive behaviour is unnecessary because team members already tend to share the same goals. In those circumstances, companies performed best when led by empowering leaders.
But in stable environments, ventures with homogenous top management teams had the most success when led by directive leaders.
"The main point that can be drawn from this research is that entrepreneurs must take into account the type of environment and the type of team, then consciously choose the most effective leadership style to address the internal and external factors alike," Dr Hmieleski said. "It's not easy to do."
But according to the study, the effort is worthwhile and may reap substantial performance gains for new ventures.