Leadership Styles and Situational Management

Introduction: What Is Leadership

Leadership is one of the most studied and discussed topics in management. Over the past 100 years, numerous theories, models, and approaches have been proposed to understand what makes a leader effective. However, all researchers agree on one thing: leadership is not a position, but the ability to influence people and inspire them to achieve common goals.

A frequent question arises: are leaders born or made? Modern science gives an unequivocal answer: leadership is a skill that can be developed. Certainly, some personality traits (empathy, decisiveness, communicativeness) make the path to leadership easier, but they are not mandatory prerequisites. History knows many examples of introverts who became outstanding leaders (Bill Gates, Warren Buffett, Satya Nadella).

Leadership Theories

Transformational Leadership

Transformational Leadership (Burns, 1978; Bass, 1985) is a style in which the leader inspires and motivates followers to go beyond their own personal interests for the sake of a common mission. The transformational leader creates a vision of the future and helps the team believe in its attainability.

The four components of transformational leadership (Bass's model):

1. Idealized Influence: The leader serves as a role model. They demonstrate high ethical standards, take risks, and put the interests of the team above personal ones. The team respects the leader and seeks to follow their example.

2. Inspirational Motivation: The leader articulates an appealing and inspiring vision of the future. They energize the team with optimism, set high—but achievable—goals, and help the team see meaning in everyday work.

3. Intellectual Stimulation: The leader encourages creativity and innovation. They question established approaches, welcome new ideas, and do not punish mistakes. The team feels free to experiment.

4. Individualized Consideration: The leader pays attention to each team member as an individual. They act as a mentor, understand individual needs, and help people develop.

Examples of transformational leaders: Steve Jobs (Apple), Elon Musk (SpaceX, Tesla), Satya Nadella (Microsoft).

Transactional Leadership

Transactional Leadership is based on exchange: "you do X — I give you Y." The leader establishes clear rules, expectations, and a system of rewards/punishments. This is an effective style for managing routine processes, ensuring stability, and quality control.

Components:

• Contingent Reward: Clear link between results and reward. “If you meet the plan, you get a bonus.”
• Active Management by Exception: The leader monitors adherence to standards and intervenes when deviations occur.
• Passive Management by Exception: The leader intervenes only in serious problems.

Transactional leadership is not "worse" than transformational—it simply fits other situations. The most effective leaders combine both styles.

Servant Leadership

Servant Leadership (Robert Greenleaf, 1970) is a philosophy in which the leader first and foremost serves their team. Their main task is to create conditions in which people can realize their potential to the fullest.

Principles of servant leadership:

• Listening: The leader listens first, rather than speaks.
• Empathy: Understanding and accepting people as they are.
• Healing: Helping people overcome difficulties and grow.
• Awareness: Understanding oneself, one’s strengths, and weaknesses.
• Persuasion: Influencing through arguments, not orders.
• Stewardship: Responsible management of resources and people entrusted to the leader.

Servant Leadership is especially effective in IT companies and startups, where highly qualified employees value autonomy and development. Examples: Herb Kelleher (Southwest Airlines), Tony Hsieh (Zappos).

Authentic Leadership

Authentic Leadership (Bill George, 2003) focuses on the genuineness of the leader. An authentic leader:

• Knows their values and acts in accordance with them.
• Is open and transparent in communication.
• Acknowledges their mistakes and vulnerabilities.
• Builds relationships based on trust.
• Makes decisions based on an internal moral compass, not external pressure.

Blanchard Model (Situational Leadership II)

Situational Leadership (Hersey & Blanchard) is one of the most practical leadership models. Its key idea: there is no single "best" leadership style—an effective leader adapts their style to the development level of each individual employee.

The model identifies two parameters of leader behavior:

• Directive Behavior: Clear instructions, control, structuring tasks.
• Supporting Behavior: Encouragement, listening, involvement in decision-making.

Combining these parameters yields four leadership styles:

S1 — Directing Style (High Directiveness, Low Support)

When to apply: The employee is a newcomer (D1). High motivation but low competence. They need clear instructions and step-by-step guidance.

What the leader does: Gives specific assignments, explains “what” and “how,” sets deadlines, controls performance. Makes decisions personally.

Example: A new employee in the first week on the job. The leader says: "Prepare the report using this template, use data from this table, deadline is Friday 17:00. If anything is unclear—ask immediately."

S2 — Coaching Style (High Directiveness, High Support)

When to apply: The employee is at stage D2. Competence is growing, but motivation is falling (reality is tougher than expected). They need both instruction and moral support.

What the leader does: Continues to provide direction, but explains “why,” involves in discussion, supports and inspires. Decisions are made jointly.

S3 — Supporting Style (Low Directiveness, High Support)

When to apply: The employee is at stage D3. High competence, but unstable motivation (lacks confidence, is tired, needs “recharging”). No guidance needed, but support is necessary.

What the leader does: Listens, supports, helps in decision-making, gives positive feedback. Decisions are made by the employee with the leader’s support.

S4 — Delegating Style (Low Directiveness, Low Support)

When to apply: The employee is at stage D4. High competence and high motivation. They are an expert and know what to do. Need freedom and trust.

What the leader does: Delegates full responsibility, minimally controls, provides resources and authority. The employee makes decisions.

Daniel Goleman’s 6 Leadership Styles

Daniel Goleman (author of the emotional intelligence concept) identified six leadership styles based on research with more than 3,000 managers:

1. Visionary: “Follow me—I see the way.” Creates an inspiring vision and gives the team freedom to choose how to reach it. Effective when it’s necessary to set a new direction. Climate: extremely positive.

2. Coaching: “Try this—I’ll help you grow.” Focuses on developing people, helps identify strengths and work on weaknesses. Effective for long-term team development. Climate: positive.

3. Affiliative: “People come first.” Creates harmony and emotional bonds in the team. Effective for restoring trust after a conflict or during stressful periods. Climate: positive.

4. Democratic: “What do you think?” Makes decisions through consensus and team involvement. Effective when you need to get buy-in or gather diverse perspectives. Climate: positive.

5. Pacesetting: “Do as I do—fast and well.” Sets high standards by personal example and expects the same from others. Effective for quick results with a motivated team of experts. Climate: can be negative if used for extended periods.

6. Commanding: “Do what I say.” Directive style with the expectation of immediate execution. Effective in crisis situations when there is no time for discussion. Climate: negative if used for prolonged periods.

Goleman emphasizes: the most effective leaders master at least four styles and switch between them according to the situation.

Leader vs. Manager

A frequently discussed dichotomy, though in practice the roles often overlap:

The ideal executive combines both roles: manages processes like a manager and inspires people like a leader.

Leadership Pipeline

Leadership Pipeline (Ram Charan) is a model describing key career transitions for a leader. Each transition requires a change in skills, time priorities, and work values:

1. Managing Self → Managing Others: Transition from individual contribution to managing a team. The key change: value is created not by personal work, but by the work of others.
2. Managing Others → Managing Managers: Transition from direct supervision to managing through other leaders.
3. Managing Managers → Functional Leader: Managing an entire function (marketing, sales, technology).
4. Functional Leader → Business Leader: Managing an entire business, with P&L responsibility.
5. Business Leader → Group Leader: Managing a portfolio of businesses.
6. Group Leader → CEO: Managing the entire organization.

Leader’s Self-Awareness: Johari Window

Johari Window (Joseph Luft and Harry Ingham) is a self-awareness model that helps leaders understand themselves and improve interactions with others.

The model divides information about a person into four areas:

1. Open Area (Arena): Known to me and others. These are our public qualities, skills, and knowledge.

2. Blind Spot: Known to others, but not to me. These include habits, behavioral patterns, and qualities we do not realize but others notice. Feedback from colleagues helps shrink the blind spot.

3. Facade (Hidden Area): Known to me, but not to others. These are thoughts, feelings, and experiences we consciously conceal. Openness and trust help shrink the hidden area.

4. Unknown Area: Unknown to both me and others. Hidden talents and potential revealed through new experiences and self-exploration.

An effective leader seeks to expand the open area by receiving feedback (shrinking the blind spot) and self-disclosure (shrinking the hidden area).

Examples of Business Leaders

Satya Nadella (Microsoft): An example of transformational and servant leadership. Nadella transformed Microsoft’s culture from "know-it-all" to "learn-it-all," instilling a growth mindset. Under his leadership, Microsoft’s market capitalization grew from $300 billion to more than $2 trillion.

Reed Hastings (Netflix): An example of an unconventional approach to leadership—a culture of freedom and responsibility (Freedom & Responsibility). Minimal rules, maximum autonomy, but with high accountability for results.

Indra Nooyi (PepsiCo): An example of authentic leadership and strategic vision. She transformed PepsiCo’s portfolio towards healthy products while increasing revenue by 80%.

Practical Exercises

Exercise 1

Question: You are the head of a team of 6 people. Analyze each employee using Blanchard’s situational leadership model and determine the optimal management style for each:

• Alexey: 3 years on the job, excellent specialist, but recently looks demotivated and bored
• Maria: joined 2 months ago, very energetic, but makes a lot of mistakes
• Dmitry: one year on the job, good skills, but constantly doubts himself and double-checks every decision
• Elena: 5 years in the team, expert, independent, regularly proposes improvements
• Sergey: 6 months, initial enthusiasm is gone, faces difficult tasks, motivation is decreasing
• Olga: 2 years, stable mid-level, handles routine tasks well but avoids new challenges

Solution:

Alexey (3 years, expert, demotivated):

• Development level: D3 (high competence, unstable/low motivation).
• Style: S3 — Supporting. Alexey does not need instructions—he knows what to do. His problem is motivation.
• Actions: Conduct a 1-on-1 to find out the cause of demotivation (boredom? no growth? burnout?). Offer new challenges: mentoring newcomers, leading a new project, participating in strategic decisions. Allow him to develop in his area of interest. Publicly recognize his expertise.

Maria (2 months, energetic, many mistakes):

• Development level: D1 (high motivation, low competence).
• Style: S1 — Directing. Maria is full of enthusiasm but needs clear instructions and standards.
• Actions: Give specific tasks with step-by-step instructions. Clearly explain quality standards and expectations. Check her work in early stages (before completion). Praise progress, kindly point out mistakes and explain how to avoid them.

Dmitry (1 year, good skills, lacks confidence):

• Development level: D3 (competence is present, confidence/motivation is unstable).
• Style: S3 — Supporting. Dmitry is capable, but doubtful.
• Actions: Build confidence through positive feedback. Show the results of his work—"here’s what you did and here’s the effect it had." Gradually increase autonomy. Ask questions like “What do you think is best to do?” instead of giving answers.

Elena (5 years, expert, independent):

• Development level: D4 (high competence and motivation).
• Style: S4 — Delegating. Elena needs neither instructions nor support.
• Actions: Delegate complex and strategic tasks with full responsibility. Give maximum freedom in decision-making. Involve her in mentoring other employees. Discuss career development—is she ready for a team lead role?

Sergey (6 months, enthusiasm gone, difficulties):

• Development level: D2 (growing competence, declining motivation).
• Style: S2 — Coaching. Sergey has hit the “valley of disappointment”—reality turned out tougher than expected.
• Actions: Continue to provide direction, but explain “why” and involve him in discussion. Normalize difficulties: “This is normal, everyone goes through this.” Break complex tasks into smaller ones to create a sense of progress. Share experience in solving similar problems.

Olga (2 years, stable mid, avoids challenges):

• Development level: D3/D2 in the area of new tasks (competent in current tasks, but not developing).
• Style: Combination of S3 (for current tasks) and S2 (for new challenges).
• Actions: Support her in current work. For development—offer “safe” challenges with coaching support. Discuss career goals: does she want to grow? If yes—draw up a development plan. If not—respect her choice, but make sure she remains engaged.

Exercise 2

Question: Analyze the following situation and determine which of Goleman’s 6 leadership styles is most appropriate for each stage. Situation: your company is experiencing a serious crisis—a key client (30% of revenue) is going to a competitor. The team is in panic, motivation has dropped, two valuable employees are considering leaving. Describe your actions in the first 48 hours, the first week, and the first month using different leadership styles.

Solution:

First 48 hours — stabilization:

Style: Commanding (first hours) → Affiliative (afterwards).

Actions (commanding style):

• Immediately gather the team and clearly state the situation: “Yes, we lost a major client. This is serious, but not catastrophic. Here’s what we’re going to do right now...”
• Distribute urgent tasks: who analyzes the reasons for the client’s departure, who contacts other key clients (to prevent a domino effect), who starts working on a revenue replacement plan.
• Set up daily short standups (15 min) for coordination and information exchange.

Actions (affiliative style):

• Hold one-on-one conversations with the two employees considering leaving. Listen to their concerns, show empathy: “I understand the situation is worrying. Tell me what’s on your mind?”
• Be emotionally available to the team. Normalize anxiety: “It’s normal to feel concerned. We will get through this.”
• Provide basic support: flexible schedule, opportunity to discuss anxieties, no pressure.

First week — analysis and planning:

Style: Visionary + Democratic.

Actions (democratic style):

• Hold a team session to analyze the reasons for the client’s departure: what went wrong, what could have been done differently, what lessons can be learned. Involve the entire team—every voice counts.
• Gather ideas for revenue replacement and attracting new clients.

Actions (visionary):

• Based on the analysis and ideas, formulate a new vision: “This situation is an opportunity. We were dependent on a single client. Now we will diversify our base and be more resilient. Here’s our plan for the next 90 days...”
• Show the team the long-term perspective and inspire action.
• Set specific goals for the next month.

First month — recovery and growth:

Style: Coaching + Pacesetting (in moderation).

Actions (coaching):

• Individual work with each team member: discussion of lessons learned, areas for growth, career goals.
• Help the team grow through the crisis—turn negative experience into learning.
• Support the two employees who considered leaving: discuss their role in the new plan, offer development opportunities.

Actions (pacesetting—judiciously):

• Set a high tempo in attracting new clients—lead by example with active outreach.
• Set ambitious but achievable pipeline goals.
• Important: don’t overdo it—the team is stressed; prolonged pacesetting will worsen the situation.

Final reflection (end of month):

• Hold a retrospective: what worked, what didn’t, what to improve.
• Acknowledge achievements and progress (even small gains).
• Update the strategy for the new reality.
• Ensure the two valuable employees have stayed and feel engaged.