In 2015, Harvard Business Review wrote that Singapore as an entrepreneurial hub is among the best and most successful in the world. Many factors could be attributed to this success. Some would say that the support that the government gives to entrepreneurs helped lead to the success of businesses. On the other hand, some would say that the communities in Singapore cultivate creativity and innovation very well, inspiring more and more entrepreneurs every day to start their own businesses. Lastly, some would say that it’s entrepreneurs themselves that led to the success. All answers are correct, especially the third one.

Effective leadership is at the forefront of driving a business to success. It led to a modern and reliable transportation system that Seah Moon Ming presided over as the Chairman of SMRT. It led to an influential and impactful social enterprise, a component that Melissa Kwee, the CEO of the National Volunteer and Philanthropy (NVPC), Includes to create what is known as a “City of Good.”

These are five types of effective leadership and their strengths.

Democratic Leadership

A democratic system doesn’t just apply to governments. It also can be effective for businesses. This type of leadership is rooted in collaboration. Although they preside over their companies, leaders make decisions and solve problems with the people they work with. They don’t just decide everything for the company.

The strength behind this type is that companies will have no shortage of innovative solutions and sound decisions. The judgment doesn’t just lie on the leaders. What’s also great about this is that it fosters professional growth by engaging with the whole company. By letting workers know that their input matters, they will be more encouraged to embrace their respective roles.

Transformational Leadership

Much like democratic leadership, transformational leadership is rooted in the agency of the people. But what sets transformational leadership apart is that leaders usually have an enthusiastic and encouraging disposition. A huge part of their job is encouraging the people they work with to get deeply involved in the business and embrace opportunities for professional and social growth.

Not only do transformational leaders involve their workers in decision-making and problem-solving, but workers are also encouraged to explore other ways to grow. They go often stimulated intellectually and creatively. Thus, they are mostly encouraged to come up with ways to innovate the companies further.

Servant Leadership

Although both types of leadership previously mentioned involving the team very well in the business, it’s servant leadership that truly holds the team in high regard. For servant leadership, the highest priority is ensuring that the workers are well taken care of and are very happy with their roles in the company. Simply put, they put the needs of the people first.

The strength behind this type of leadership is that it fosters strong camaraderie and loyalty among the team. It promotes the notion that the team should be strong together to achieve their shared goals for the company.

Coach-style Leadership

Coach-style or coaching leadership also encourages the professional and social growth of the workers. But unlike the previously mentioned types of leadership, coach-style leadership prioritizes this above all else. The rationale is coach-style leaders, while having stable positions in the company, won’t be around forever. They will, eventually, retire. Thus, they will have to pass the torch to the next best leader.

A coach-style leadership prepares for that inevitability. At its core, this type of leadership is future-forward. It’s always making sure that companies will continue on no matter who the leader is.

Transactional Leadership

Transactional leadership is probably unique among the previously mentioned types of leadership. This is because this type is driven by structure and discipline. The other types would often encourage workers to explore innovative ways to transform the company. Transactional leadership, on the other hand, relies on a tried and true system in the company.

Transactional leaders also rely on the workers to measure their progress and potential in the company. They cultivate an environment where the levels of authority are always respected. They thrive on the routine. This doesn’t mean that they discourage innovation altogether. It only means that structure and order should always be valued. Workers under this type of leadership are motivated by a reward-penalty system. As long as they do their job, rewards will come to them.

Given the differences of these types of leadership, it’s clear that no one type works for all companies. It all depends on the workers and the leaders themselves. In Singapore, there is no doubt that these five types — and more — are turning startups into success stories. All entrepreneurs have to do is find the type that works best for them and their team.

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