As an executive coach to agents, I get a pretty clear picture of the greatest obstacles agents face in their businesses. Surprisingly, it’s not the soft market, the bad economy, shrinking commissions, insurance companies or technology. For most agents, the toughest challenge is managing their people. Agents are facing tremendous pressures; they want and need more from their people—more problem-solving and less complaining, accountability without constant prodding, an increased sense of urgency and an ability to think for themselves.

The problem is that despite their best leadership efforts, many agents aren’t getting the results they want. The strategies that used to work aren’t working any more.

Times have changed. Respect for authority and trust are at an all-time low while anxiety and uncertainty are at an all-time high. Job loyalty is a thing of the past. Attention spans get shorter every day. With high unemployment, people are inclined to hold onto their jobs no matter how much they may dislike them. As a consequence, a growing percentage of workers have “quit” but are still on the job. These conditions present huge challenges for leaders trying to engage employees and change behavior.

There is no shortage of opinions on what it takes to be an effective leader—some of them right and some of them wrong. The good news is that there now is a solid body of research on the leader traits and behaviors that are most effective. Understanding these findings can take much of the mystery out of effective leadership.

A leader’s impact on the work environment

The research, which was conducted by the Hay Group, included 3,871 leaders. Through data and direct observation, researchers looked at how leaders motivated their direct reports, managed change and handled crisis. Then, they focused on how their specific behaviors affected the factors that are known to drive the work environment within the business.

What’s important to keep in mind is that work environment accounts for 20% to 30% of business performance. About 50% to 70% of how employees perceive their work environment can be traced to the actions of one person—the leader.

The research identified six distinct leadership styles. Coercive leaders demand immediate compliance. Authoritative leaders mobilize people toward a vision. Affiliative leaders create emotional bonds and harmony. Democratic leaders build consensus through participation. Pacesetting leaders expect excellence and self-direction. Coaching leaders develop people for the future. The styles, taken individually, appear to have a direct and unique impact on the work atmosphere of a company and, in turn, its financial performance.

Undoubtedly these six styles will seem familiar to you. Either you know someone who leads like this or it is the style you use most frequently. What’s insightful and actionable in this research are the specific ways in which each impacts employees’ willingness to follow.

Styles to be used sparingly

First let’s look at the two leadership styles that decrease employee engagement.

Coercive leader. Coercive leadership can be summed up in a single phrase, “Do what I tell you.” Understandably, it’s a style many leaders adopt when time is short and employees fail to see what needs to be done. Coercive leaders are top-down managers. They don’t seek input and they demand compliance. When things go wrong, they are quick to affix blame.

In most situations, coercive leadership is one of the most damaging. It has a negative impact on how free people feel to innovate as well as on their sense of responsibility to the organization. This style kills idea generation and people’s initiative in solving problems. People feel so disrespected that they don’t even bother to bring up new ideas. Their sense of personal responsibility evaporates. Unable to act on their own initiative, they lose their sense of ownership and feel little accountability. An attitude of, “Why bother? What I do doesn’t really matter,” begins to prevail.

As damaging as the coercive style can be, there are times when it works. For example, it can break failed business habits and shock people into change. It is appropriate in a genuine emergency and can also work with problem employees when all else fails. The key is using it sparingly, in the appropriate situations and for a short period of time.

Pacesetting leader. Pacesetters can be summed up by, “Do as I do, now.” They set extremely high standards to which they personally adhere. They are compulsive about doing things better and faster, and they require the same of the people around them. They are quick to replace people who don’t live up to their standards. People often think that pacesetters get great results, but the opposite is true.

Most employees are overwhelmed by these leaders and the demands they make. Morale drops as a result. Pacesetters expect people to know how to do a job, so they seldom provide clarity on the work to be done. Pacesetters feel that if you don’t know how to do it, you’re the wrong person for the job.

People become more focused on second-guessing what the leader wants rather than on the work itself. They are left feeling that the leader doesn’t trust them to work in their own way or take initiative. When things don’t live up to their vision, pacesetters have a tendency to jump in or take over. Commitment dwindles under pacesetters: People lose confidence and have no sense of how their efforts fit into the big picture.

Like coercive leadership, pacesetting has its time and place. It can be extremely effective in situations where all employees are self-motivated, highly competent and need little direction or coordination.

More positive styles

The remaining four leadership styles play a positive role in improving the work environment and engaging employees.

Authoritative leader. Of the six leadership styles, the authoritative one is the most effective in motivating employees. The authoritative leader’s motto is, “Come with me.” They are visionary and they motivate people by making it clear to them how their work fits into the larger vision for the organization. People who work for such leaders understand that what they do matters—and why.

Authoritative leaders maximize commitment to the organization’s goals and strategies. Tasks and performance feedback revolve around achieving the vision. Standards and rewards for success are clearly tied to the vision. Authoritative leaders state the end goal but generally give people plenty of leeway on how to get there.

The authoritative style works in almost any business situation, but it is particularly effective when a business is adrift and the leader wants to chart a new course. As effective as this style is, it does not work in every situation. This approach often fails in situations where the team knows more about the business than the leader does. The leader can end up looking pompous and out of touch.

Affiliative leader. The affiliative leader’s motto is, “People come first.” Thus their leadership style revolves around people—individuals and their emotions are valued over tasks and goals. Affiliative leaders are relationship-builders who know how to keep people happy and create harmony within the team. They create strong emotional bonds and are rewarded with loyalty.

Affiliative leaders create an atmosphere of trust and openness. They are masters at making people feel that they belong. This contributes to good communication and collaboration.

People are given the freedom to do their jobs in the way they think is most effective. Affiliative leaders offer ample positive feedback. Individual and group achievements are routinely recognized and celebrated.

The affiliative style generally has a positive impact but is particularly effective when leaders are trying to build the team, increase harmony, improve communication or repair trust. Despite its benefits, the affiliative style does have pitfalls. The leader’s focus on praise can leave poor performance uncorrected. Employees may believe that mediocrity is accepted. Without constructive feedback, employees get little guidance on what they need to do to improve. When the business is facing complex challenges, affiliative leaders don’t provide the clear directives people often need in order to move forward.

Democratic leader. This leader’s motto is, “What do you think?” Democratic leaders let workers have a say in the decisions that affect their goals and how they do their work. Because they have a say in setting their goals and the standards for evaluating success, people tend to be realistic about what can and cannot be accomplished. By listening to employee concerns, democratic leaders learn what to do to keep morale high.

While this style has its benefits, it can result in endless meetings where ideas are mulled over and the only decision made is to have another meeting. Crucial decisions don’t get made and people end up feeling frustrated and leaderless.

This style is most effective when the leader is uncertain about the best direction and needs ideas and guidance from able employees. It should be avoided in crisis situations and when employees lack the insight to offer sound advice.

Coaching leader. This leader’s style in a phrase is, “Try this.” Coaching leaders help employees identify their strengths and weaknesses and tie them to personal goals and aspirations. They work with employees to pinpoint specific goals and establish plans for attaining them.

Coaching leaders are great at delegating. They give people challenging assignments and accept short-term failure if it furthers long-term growth. Even though it is highly effective, coaching is the least used of the six styles. This is because leaders often lack coaching skills and fear that the approach is too time-consuming.

Coaching works best with employees who are motivated to address weaknesses they know they have or to broaden their skills. It will not work if employees are resistant to learning or if leaders lack coaching expertise and skills.

The need for multiple styles

This study and many others show that with today’s workforce and business climate, leaders need to use multiple styles in order to be effective. Leaders who have mastered the four positive styles— authoritative, affiliative, democratic, and coaching—have the very highest level of employee buy-in and the best business performance.

The most effective leaders move seamlessly from style to style throughout the course of a day. For example, at an employee meeting announcing a new initiative, the leader is authoritative. In a weekly meeting with his experienced and capable management team, he is democratic. In integrating staff from a recent acquisition, he is affiliative. In a one-on-one conversation with a star salesperson who is in a slump, he is coaching.

Using multiple styles doesn’t mean changing your personality and behaving in a way that is unnatural. You probably use more than a single style already. It just means broadening your repertoire through awareness of different styles and being attuned to the situations in which each works best.

Author’s note: In Part 2, we’ll focus on the five leadership behaviors that make people want to follow you and the five most common things leaders do to sabotage their success.

The author

Kimberly Paterson is a Business and Certified Energy Leadership Coach. She is president of CIM (www.cim-co.com) where she works with insurance organizations to build the vision, strategy, customer insight and leadership skills to energize people and achieve outstanding results. She can be reached at kpaterson@cim-co.com.