Team leadership - Leadership styles

Learning Outcomes

After studying this article, you will be able to explain the main leadership styles a project manager may use (including transformational and transactional), describe their core characteristics, identify when each is appropriate for projects, and recognise common exam scenarios and pitfalls related to leadership approaches. You will be equipped to evaluate leadership requirements and adopt suitable styles to meet project goals and team needs for the PMP exam.

PMP Syllabus

For PMP, you are required to understand different leadership styles and how to select, adjust, or combine them according to project and team context. Focus your revision on:

• Distinguishing between main leadership styles: transformational, transactional, servant, directive, laissez-faire, collaborative.
• Recognising traits and core practices of each style (e.g., how leaders motivate, control, and communicate).
• Matching leadership style(s) to team maturity, project complexity, and environment type (e.g., predictive, agile).
• Evaluating the impact of leadership style on team performance, motivation, and outcomes.
• Knowing when to switch, combine, or escalate between leadership styles on a project.
• Understanding common misconceptions and traps in exam questions about appropriate leadership behaviour.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which leadership style focuses on inspiring team members with vision and driving change through encouragement and personal example?
   1. Directive
   2. Transformational
   3. Transactional
   4. Laissez-faire
2. What leadership approach centres on close monitoring of work and rewarding or penalising staff based on achievement of objectives?
   1. Collaborative
   2. Transactional
   3. Transformational
   4. Servant
3. Which is generally the best leadership style for a newly formed, inexperienced project team requiring structure and clear direction?
   1. Transformational
   2. Laissez-faire
   3. Directive
   4. Collaborative
4. When should a project manager consider switching from a directive to a transformational style?
   1. When the team is mature and self-motivated
   2. When project objectives need to be strictly enforced
   3. When clear, step-by-step work control is required
   4. When compliance is more important than engagement

Introduction

On the PMP exam you will be tested on more than just technical project management skills—you must also demonstrate a solid understanding of how a project manager leads people. Good team leadership is essential for delivering project value, managing change, and resolving conflict. Effective leaders do not rely on a single approach. Instead, they tailor their style depending on team maturity, project context, and the situation.

This article reviews the main leadership styles, such as transformational and transactional, outlines their key features, and explains when and how they are best used in project environments.

Types of Leadership Styles in Projects

Project managers need to understand and use a range of leadership styles, adjusting over time to the project's requirements and team needs. No one style is best in all cases. The most commonly referenced styles on the PMP syllabus are:

• Transformational
• Transactional
• Servant
• Directive
• Laissez-faire
• Collaborative

Let's clarify each in turn, highlight pitfalls, and review when and why you would select one style over another.

Key Term: Leadership Style
A characteristic approach a leader applies to guiding, motivating, monitoring, and communicating with their team—including behaviours, methods, and focus areas.

Transformational Leadership

Transformational project leaders motivate team members through vision, inspiration, and encouragement. They focus on change, innovation, and team growth, driving higher engagement by appealing to shared goals and values. Transformational leaders act as role models—demonstrating integrity and supporting autonomy—and consistently communicate a motivating vision of project outcomes.

Key Term: Transformational Leadership
An approach where the leader inspires, energises, and stimulates followers to exceed their own expectations, promoting long-term growth, innovation, and personal development.

Transformational leadership is often linked to successful change initiatives, agile project environments, and high-performing, mature teams.

Transactional Leadership

Transactional leaders emphasise control, order, and clearly structured rewards or penalties based on results. This style operates on explicit agreements: team members work to receive tangible rewards or to avoid negative outcomes. The focus is on performance, compliance, and the meeting of objectives rather than vision or values.

Key Term: Transactional Leadership
A leadership style based on exchanges: the leader sets clear structures for tasks, rewards positive performance, and penalises failure to meet objectives; mostly suitable for short-term results and compliance.

Transactional leadership is useful where standards, deadlines, or regulatory compliance are more important than personal growth or engagement.

Other Leadership Styles in Project Management

While transformational and transactional styles are the most tested, project managers should recognise several other effective approaches:

Key Term: Servant Leadership
A style where the leader places the needs of the team first, removes obstacles, and helps team members grow and perform their work as well as possible. Commonly seen in agile.

Key Term: Directive Leadership
A leader makes decisions, gives clear orders, and closely supervises work. Appropriate for crisis situations or inexperienced/new teams needing structure.

Key Term: Laissez-faire Leadership
The leader provides minimal direction or interference, allowing greater team autonomy; success depends on team maturity and motivation.

Key Term: Collaborative Leadership
The project manager shares decision-making with the team and stakeholders, fostering participation, buy-in, and team ownership of goals and results.

Selecting the Right Leadership Style

There is no single “best” style for all circumstances. The most effective project managers use situational leadership—choosing, switching, or combining styles to fit the needs of the task, team, and environment.

Factors influencing style selection include

• Team experience and maturity
• Project complexity and uncertainty
• Time pressure and urgency
• Regulatory/compliance requirements
• Stakeholder needs and conflict level
• Motivation and engagement needs

Typical Use Cases

• Transformational: Project needs new ideas, culture change, motivating vision, or team innovation; team is mature and open to autonomy.
• Transactional: Work must be completed to strict standards, with tight control, compliance, repeated routine tasks; early in project when structure is critical.
• Directive: Crisis, urgent timelines, inexperienced teams, when decisions must be quick/centralised.
• Servant: For self-organising agile teams or where growth is a priority.
• Laissez-faire: Very experienced/self-motivated teams needing space, not control.
• Collaborative: Building consensus, trust, and buy-in; complex decisions with many inputs.

Worked Example 1.1

A project manager is assigned a fast-track rollout of compliance software to meet a new regulatory deadline. The team is inexperienced. What leadership styles should the project manager employ and why?

Answer: The manager should combine directive and transactional styles—giving clear instructions, closely supervising work, and rewarding/punishing based on compliance to ensure quick, error-free delivery by a less mature team.

Worked Example 1.2

A new project to launch a highly innovative product in a changing market assembles senior, motivated professionals. Management expects creative solutions. Which leadership style is likely to produce the best results?

Answer: The project manager should use a transformational and collaborative approach—setting a compelling vision, supporting team autonomy, and working with the team to encourage creativity and ownership of results.

Comparing Styles: Key Features

Exam Warning

Questions may attempt to trick you into choosing the same leadership style for every scenario. Be ready to justify why another style fits the situation, using team maturity, project urgency, or stakeholder needs as cues.

Revision Tip

On the exam, look for cues about team maturity, stakeholder involvement, regulatory demands, or innovation needs—these hint at which leadership approach to choose.

Key Point Checklist

This article has covered the following key knowledge points:

• Leadership styles (transformational, transactional, servant, directive, laissez-faire, collaborative) differ in approach, focus, and effect.
• Effective project managers use situational leadership, switching or mixing styles based on team maturity and project context.
• Transformational leadership inspires innovation and long-term engagement; transactional provides control and rewards for compliance.
• Directive and laissez-faire represent opposite ends: one for crisis/control, the other for mature/autonomous teams.
• Collaborative and servant leadership build trust, ownership, and enable high-performing/agile teams.
• On the exam, style choice depends on specific team, project phase, and organisational needs.

Key Terms and Concepts

• Leadership Style
• Transformational Leadership
• Transactional Leadership
• Servant Leadership
• Directive Leadership
• Laissez-faire Leadership
• Collaborative Leadership