Contemporary Leadership for Today’s Ever-Changing World

What does it take to help leaders communicate and lead in today’s modern world? A simple word answer would be “Contemporary leadership”. Even the most personable and engaging leaders can benefit from contemporary leadership approaches. Contemporary leadership theory is the leadership approach for the 21st century.

In the past half-century, the study of leadership has evolved. It offers many new models and frameworks. These offerings help to explore what it means to be a leader and practice leadership well.

There are many theories of leadership. Some promote traditional leadership theory approaches, while others promote contemporary leadership theory approaches.

But, in today’s business world, what impact do these leadership theories have?

In this article, we will outline nine contemporary theoretical approaches. It will help you develop and inspire people to achieve organizational goals.

What are Contemporary Approaches to Leadership Theory?

Contemporary generally means “modern” or “new.” The theory suggests the same. It is all about the leadership approaches for the 21st century. This theory is still relevant today though introduced in the 1990s.

Contemporary leadership style helps to cope with changing circumstances of the current world. This approach to leadership is also known as the Neo Charismatic Theory. It relies on three aspects-

• Rapid change,
• Technological innovations, and
• Increased globalization.

Traditional leadership approaches based on influences and interactions differ from contemporary approaches. This New Era approach focuses on the complex dynamics of interactions and situations.

What is it Like to be a Contemporary Leader?

• Contemporary leaders believe that leadership skills are present in every individual. Hence, this theory consists of leadership training and development.

• Contemporary leaders can react to different situations in the changing environment.

• Contemporary leadership brings something new to the table – a collaborative workplace approach. These leaders recognize that strength relies on unity.

• Organizations defined by contemporary leadership have no real hierarchy. Of course, structure exists, but teams are encouraged to work together.

• Collaborative leadership is underpinned by trust. Hence, roles and responsibilities evolve and adapt in response to the business needs.

• A contemporary leader is open-minded. They value the unique insights that diverse perspectives can bring.

• Contemporary leaders make strategies based on the team’s best ideas. They consider problem-solving as a team effort.

• Contemporary leaders do not distinguish. They treat everyone equally as peers. Here, employee feedback is immediate, criticism is constructive, and employee recognition is timely.

• Contemporary leaders are generous. They share knowledge and experiences for the team’s greater good and development.

• These leaders provide personalized mentoring and coaching. They focus on employee empowerment and continuous improvement.

We further discuss many contemporary approaches that offer significant insight into leaders’ behaviors. We will discuss why most leaders make the type of decisions they make.

The theories presented below focus on different contemporary styles of leadership. These leadership approaches are used in various areas of management and leadership.

The Different Contemporary Leadership Theory Approaches

Management Theory or Transactional Theory

Transactional leadership theory is a contemporary leadership style approach. This leadership style emphasizes the interactions between leaders and followers.

The achievement of goals and objectives under this leadership relies on these interactions. The theory works on Maslow’s basic needs of satisfaction.

• A transactional leader is someone who values order and structure.
• These leaders recognize their followers’ desires and motivate them to improve their performance.
• They encourage employees by rewarding them for achieving the objectives.
• Military operations, large corporations are best fit for such leaders. These are places that need rules and regulations to complete objectives on time.
• Transactional leaders aren’t a good fit for creative and innovative workplaces.
• This type of leadership sets defined ways to work for its subordinates.
• These leaders’ preferred method of tracking employee performance is through performance reviews.

Relationship Theory or Transformational Theory

Transformational leadership theory is a recent addition to leadership literature. Transformational and transactional leadership are considered counterparts of each other. Both have the same goal-

focus on getting employees to achieve the desired organizational goals.

Transformational theory is about transforming a business. Transformational leaders have the following traits-

• Transformational leaders are innovative thinkers with creative skills.
• Charisma, motivation, and interactions are important for these leaders.
• They use these methods to influence, increase performance, build trust and understanding.
• Leaders and followers have high moral and ethical standards under transformational leadership. These traits help them to achieve set organizational goals and objectives.
• Transformational leaders are highly committed, motivated and bring significant change to the organization.
• The success of transformational leaders is based on the flexibility of set rules. It also depends on the ability of a leader to convince their followers.

Leader-Member Exchange (LMX) Theory

Leader-member exchange (LMX) theory is an approach to understand how leaders influence employees. The theory states that the influence depends on the type of relationship.

• In high-quality LMX relationships, the leader forms a trust-based relationship with the follower.
• In low-quality LMX relationships, leaders and followers have lower trust and respect levels.

It’s not uncommon for different managers to have other relationships with various employees. Many leaders end up developing different relationships with followers in the same group.

To understand this concept better, we must go back to high school. Almost every student could be divided into two categories- popular or unpopular. LMX theory is somewhat like that. It explains that in any group, there are in-group members and out-group members.

You may find in-group members close to the leaders and out-group members who are more distant.

• In-group members work well with the leader and have a personality that fits with the leader. They are often willing to take on extra tasks or responsibilities. In-group members are more likely to earn promotions.

• Out-group members are less compatible with the leader. They hold dissenting opinions and are less willing to take on extra assignments. Out-group members are more likely to leave.

Servant Leadership Theory

Leadership scholars emphasize the importance of serving others. The other recent focus is on the importance of being true to oneself as a leader.

This theory originated in the writings of Robert Greenleaf. The approach defines leadership as serving the needs of others over their self-interests.

• Servant leaders help employees develop and reach their goals.
• They put their employees first and understand their personal needs and desires.
• These leaders also empower employees and help them build their careers.
• This leadership approach positively impacts organizational commitment, employee behaviors, and work performance.
• Servant leaders create a climate of fairness in their departments.
• Servant leadership is effective but a tough transition for many managers. Many corporate leaders of today are infamous for their humility. But, leaders who have adopted this approach attest to its effectiveness.
• Servant leadership sometimes overlaps with other leadership theories, such as transformational leadership. But, work ethics and selflessness are distinct in this leadership style.

Authentic Leadership Theory

Authentic leaders believe that values and moral compass help towards effective leadership. These leaders change their leadership approach based on the demands of the situation.

• Authentic leaders are self-aware, genuine, and honest.
• These leaders do not try to fit into societal expectations.
• They are introspective. Authentic leaders understand their values and priorities.
• These leaders are not afraid to act the way they are. In other words, they have high levels of personal integrity and practice transparency. They say what they think. They behave in a manner consistent with their values.
• Authentic leaders do not imitate other leaders. They discover their style through their personality and life experiences.
• Authentic leaders build authentic relationships and inspire trust and motivation in their employees.
• This leadership requires understanding oneself. So, self-reflection and feedback are vital for such leaders to perform effectively.

Complexity Leadership Theory

Complexity Leadership Theory was first introduced in 2001. It was developed by Mary Uhl-Bien, Russ Marion, and Bill McKelvey.

The theory derives from a branch of scientific thought called Complexity Theory. Complexity leadership helps to understand how successful organizations manage crises. It also allows you to gain a competitive edge.

Several scholars agree that complexity leadership theory is a form of shared leadership. According to this theory, leadership is shared and not restricted to one person.

• Complexity leaders focus on the recurring social interactions within a network. So, anyone within the social capital can become a leader.
• This theory helps to improve team performance and adaptability. It also increases innovation, promotes quality outcomes, and encourages organizational change.
• These leaders don’t consider themselves as the only driving force for success. Instead, it emphasizes the whole system of an organization. It includes social interactions and ways to manage complexity.

But, this theory lacks empirical research on the various dimensions of the model. The effectiveness of the model is computer-based and lacks a methodological approach.

Charismatic Leadership Theory

Charismatic leadership is a new and distinct paradigm. It came to the forefront of public attention during the 2008 US elections. In the election, Barack Obama was elected as the first African American president. He is believed to be charismatic, among many other leadership attributes he demonstrates.

Charismatic authority is a concept of leadership. Robert House first formalized it in 1976. House followed the work of the German sociologist Max Weber in the 1940s.

Few characteristics of charismatic leaders are:

• Charismatic leaders are influential and confident individuals with strong beliefs.
• They are change agents who communicate their vision to others.
• These leaders set high expectations from their followers.
• Charismatic leaders understand the needs of their followers.
• These leaders build enthusiasm among followers.
• Such leaders are good at recognizing the emotions and moods of others.

But, charismatic leaders can believe more in themselves than in their teams. This characteristic can create the risk of organizational collapse if the leader leaves. Also, charismatic leaders might think that they can do no wrong, even when others warn them. This feeling that they are unbeatable can ruin a team or an organization.

Participative Leadership Theory

Participative leadership is a management style that seeks employee feedback on business decisions. Specific details about business concerns provided to the employees help them to vote. The majority vote is collected then decides the organizational plan of action.

In recent business circles, the “participative leadership” concept has become a catch-phrase. It is also known as democratic leadership.

Few common key traits of participative leaders are:

• Participative leaders encourage subordinates to make decisions.
• They manage teams by encouraging everyone to work together.
• These leaders encourage employees to share their thoughts. Participative leaders encourage employees to present the organization with fresh insights.
• The participative leadership style is centered on communication. Participative leaders keep their subordinates informed about real situations under all circumstances.
• Participative leaders are open-minded and help raise morale. They take suggestions from subordinates and then incorporate them into the action plan.
• These leaders are approachable.
• Counselling, training and development opportunities are offered to subordinates by participative leaders.
• Participative leadership works best in low-pressure environments that don’t quickly turn around. That’s because this kind of leadership takes time.

Power-and-Influence Theory

Power and Influence theory describes how leaders use their power to get the work done to achieve a goal. The approach has two segments:

A) Power:
It is using one’s authority to persuade others to act accordingly. It often leads to resentment. The best-known of these theories is French and Raven’s Five Forms of Power. This model highlights the following powers:

1. Positional power:

• Reward power-
  Leaders motivate their teams by offering rewards based on the tasks.

• Coercive power-
  Leaders pressure the employees into doing something that they don’t want to do.

• Legitimate power-
  It is the perception of authority and status in an organization. Legitimate power builds the feeling of responsibility towards the management and team members. Teams feel obligated to complete their tasks. It is usually accompanied by a traditional system of reward and punishment.

2. Personal power:

• Expert power-
  It is the perception that a person has specialist knowledge. Leaders with expert power result in genuine respect. It makes leaders more effective in directing others and rewarding them. They know what needs attention? How difficult is it? How long should it take? They can guide where required.

• Referent power-
  It occurs when people create strong professional bonds of mutual respect. The leader can make someone feel accepted or like their work. It relies on charm.

The model suggests personal power as a better alternative. Expert power is the most legitimate source of personal power. Hence, it would be helpful if you acquired it.

B) Influence:
It is about changing how a person develops, behaves, or thinks. Influence can lead to respect. It is based on relationships and persuasion. Influence comes from three primary sources that leaders and followers should strive upon:

1. Competency and knowledge
2. Character and trust
3. Dynamism and charisma.

When we talk about influence, we cannot miss the word “empowerment.” Empowerment has been a popular buzzword since the 1990s. It is one of the newest influence methods utilized.

Empowerment facilitates followers’ motivation and gives them control over their projects.

Most employees don’t appreciate power and influence theory. They want leaders that work with them and encourage them. Leaders who practice this theory change people, through power and domination. Domination can result in low morale and cliquey environments in the office.

Note: Transactional leadership also uses power and influence. This approach assumes that people work for reward and no other reason. Thus, it focuses on designing tasks and reward structures.

Final Note!

Effective leadership is crucial to the success of a company. An effective leader makes followers reach a sense of commitment, loyalty, and devotion.

Good leaders are good communicators with knowledge and expertise. Not only that, they can persuade people. Such leaders also decrease stress, costs and increase productivity.

There is no such thing as the best leadership style. But, certain characteristics and skills are needed to have the best outcome according to the situation provided.

Shifts in social structures and high-tech advancements need change management. Contemporary leaders can manage change. Under this leadership style, people work together to achieve a common objective.

In an organization, people come from different backgrounds, perspectives, values, and cultures. Contemporary leaders help bridge these social identity boundaries. It gives importance to both tasks and employees.

Contemporary leadership helps inspire subordinates to commit to the business. These leaders also motivate employees to be responsible.

On the downside, the theory lacks attention to significant cultural variations. The contemporary theory was developed based only on the western world. It did not consider the rest of the world, which is a major drawback. Considering cultural aspects of the non-western world is important.

This article is written by Tanya Ahmed, a Digital Marketer of Vantage Circle, a cloud-based employee engagement platform. She is a leadership enthusiast with a post-graduate MBA in Leadership from Queen Mary University of London. Her experiences range from various fields, including Customer relationships, Content Creating, Sales and Marketing. For any related queries, contact editor@vantagecircle.com.