I reckon that one of the most important determinants of leadership style, is the nature of the business environment in which the leader operates. Think of two independent components of that environment – Complexity and Dynamism. Issues arise when there is change in either of these components.
As environments become more Complex, it becomes harder for understanding to flow. Folks at the front line probably won’t have the whole picture: managers might have most of the pieces but they probably won’t have time to work through the complexity. So, analysis is tougher and decisions harder to make. Leaders respond by hiring more smart folks, strategising, applying analytic leadership styles and so on. And this works fine if Dynamism is low because there is time.
Where there is increased Dynamism, it will be harder to implement enduring top-down solutions because things change quickly. Leaders respond by moving faster, improving processes, relying more on instictive leadership and so on. And this works if Complexity is low because the situation is comparatively simple to deal with.
If there is modest movement on either of the (Complexity/Dynamism) axes, then leadership styles can usually adjust readily because not everything needs to change. But, if there is significant, simultaneous change on both axes, then it will be much, much harder. The established ways of doing things will stretch so far, but will eventually become ineffective. Like this…
This is the situation that I think many knowledge-intensive business are in. To respond successfully we must develop a bias towards more-enabling leadership styles; styles that promote collaboration and the emergence of self-directing cross-disciplinary communities; styles that enable spontaneous change.
In solving strategic problems or in seizing opportunities, the natural response of managers must be to begin by building a community around the situation, rather than by taking a more usual analyse-decide-implement approach. (The analyse-decide-implement stuff still happens but it happens organically within the community.) For many, the new ways will feel odd, if not, plain wrong: “We cannot demonstrate control”, “We cannot provide the direction our people are calling for”. We can, but the ways of doing these things will be different, so…
…if you want to see change (in Complex/Dynamic environments): first build a community.