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What makes up a great leader? 

What makes people want to follow them? 

What are the characteristics of a great leader? 

How many different leadership styles are there? 

These are all the questions that we’ll be answering in today’s video for Simple Money. 


Authoritarian Leadership

Ever heard anyone say, “so and so is a dictator?” 

Well, that’s this kind of “leader”.

An authoritarian leadership style is exemplified when a leader dictates policies and procedures, decides what goals are to be achieved, and directs and controls all activities without any meaningful participation by the subordinates. Such a leader has full control of the team, leaving low autonomy within the group.

Participative Leadership

When before we had a dictatorship, now we have a democracy. 

Participative leadership is a style of leadership in which all members of the organization work together to make decisions. Participative leadership is also known as democratic leadership, as everyone is encouraged to participate.

Delegative Leadership

Everyone wants a “hands off” leader until they get a hands off leader and nothing goes according to plan… because well, there was no plan to begin with. 

Laissez-faire leadership, also known as delegative leadership, is a type of leadership style in which leaders are hands-off and allow group members to make the decisions. Researchers have found that this is generally the leadership style that leads to the lowest productivity among group members.

Transactional Leadership

Transactional leadership is defined by control, organization, and short-term planning.

Leaders who adopt this style rely on a system of rewards and punishment to motivate their followers. There are also a few key assumptions associated with transactional leadership: Rewards and punishments are motivating for followers.

Transformational Leadership

There are four main components of Transformational Leadership:  Individualized Consideration, Intellectual Stimulation, Inspirational Motivation, and Idealized Influence.

Each of these components are positively related to individual and organizational performance.

  • Individualized consideration addresses the needs of each individual within the organization and what it will take for them to succeed. 
  • Intellectual Stimulation comes in multiple forms: it can be lessons taught, experience gained.. Or it can be a question that is asked that forces the individual to go out and learn the necessary skills or information to answer that question. 
  • Inspirational Motivation speaks to the needs of every individual who isn’t necessarily self-motivated or self-inspired. Executives, employees, and contractors all need to be inspired so that they can do the best work that they are capable of. An uninspired person will tend to do the minimum status quo just so that they can get the job done and go home. 
  • Idealized Influence comes from the leader and is a form of modeling that the team members can look up to. The leader represents the “ideal” standard for how someone should be, what they should do, and what to aim for. 


You may have already guessed this, but the best type of leader is one who can exemplify all of the above characteristics. 

It’s true that most people will have one area that they lean towards the most, but truly exceptional leaders have a little bit of everything going for them. 

It allows them to relate and connect to their people and truly get the most out of them. 

If you’re going to be a leader, then maybe it would be in your best interest to try and adapt them all, as well.