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Leadership Style: How Your Reaction to Risk Can Determine Success or Failure

Many business owners do not realize it, but how you react to risk can influence your leadership style according to a recent article on HR Magazine.  An effective leadership style is necessary to run your organization in a way that is efficient, financially successful and competitive.  However, the risks you are willing or unwilling to take can result in either success or the potential downfall of your business.  The information below demonstrates how your leadership style can be affected by your natural tendency toward risks.

Leadership style can be dramatically different between one person and another.  According to the article posted on HR Magazine, some tend to be prudent and avoid taking any risks, while others actively court danger.  Of course, a particular individual’s leadership style can fall somewhere between these two extremes.  Here are a few examples of how certain risks can affect leadership style, and the ultimate impact it can have on your business.

Common Leadership Styles

The psychological profiles that leaders often fall into in regards to leadership style include spontaneous, intense, wary, prudent, deliberate, composed, adventurous and carefree.  Frequently, leaders will possess traits of more than one profile, but certain characteristics usually dominate, resulting in a particular style.  How might these profiles or characteristics affect your business, bottom line?

An individual with a carefree leadership style is often impulsive; this can mean a reckless attitude that may lead to imprudent or quick decisions which may not be the best for the company.  These types of individuals are frequently not good with details.

The spontaneous leadership style often exists in leaders who are drawn to risk; making decisions that are spur-of-the-moment can make results unpredictable.  Others are prone to be adventurous, which means they may be fearless or act on impulse.  This leadership style is apparent in those who are willing to challenge conventional attitudes or traditions.

Those who are calm, rarely experience anxiety and are self-confident in their decisions usually fall under the deliberate leadership style.  These individuals usually approach risk in an all-business manner; they are always prepared.

Many leaders work under an intense leadership style.  In this case, individuals may be nervous, anxious and high-strung.  Any fear or threat is likely to throw them off-balance; this type of leader may take it personally when their plans or strategies do not end in the result they desire.

We all know those leaders or managers that never seem to lose control or their composure, no matter what happens.  This leadership style is composed; people with this characteristic may seem to be blind to risk.  They are detached an unemotional to the risk they may be taking, and never demonstrate stress.

The prudent leadership style is one of self-control; these types of individuals are very careful, organized and conservative.  The leader who is prudent will usually stick to what they know, taking no chances or risks that may turn out negative for the company.

A leadership style is often natural, but can be learned as well.  Take these descriptions in to consideration; in determining what type of style those managers and leaders in your business use, you can understand which individuals are most effective leaders, which will work to the benefit of your company.

Watch this video interview with Duke Energy CTO David Mohler where he talks about managing the human side of company transformation and how his own leadership style helps make this happen.

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