Wander around the business section of any bookstore and you’ll find no shortage of books offering proven leadership methods that promise to make you the best leader possible. Common leadership methods include transformational leadership, servant leadership, authoritative leadership, and more. 

All of these styles have their strengths and weaknesses, so what’s the objective “best” leadership style? That depends on the context. A good leader knows what kind of leadership style to use based on the situation and the audience.

Contingency theory is based on the idea that effective leadership depends on the situation, there is no one-size-fits-all approach. This theory of leadership offers interesting insights and provides practical guidance for leaders and organizations seeking to optimize their effectiveness in every situation.

What is the contingency theory of leadership?

The contingency theory of leadership is really all about situational awareness and adaptability. It asks leaders to look at several factors, such as the level of task structure (the clarity and complexity of the work), the degree of formal authority possessed by the leader, the competency of the followers, and the overall organizational climate. 

For instance, if you’re a project manager at an advertising agency full of experienced individuals, a participative or democratic leadership style may be most effective, as it facilitates collaboration and leverages the expertise of team members.

But if the situation is a crisis situation—a recent project launch has failed, resulting in a massive drop in stock prices and the threat of a hostile takeover by a different organization—a more direct leadership style might be necessary to provide clear direction and maintain control.

Why is the contingency leadership theory important, and who can benefit from it?

The contingency leadership theory is different from other leadership theories in that it acknowledges the importance of situational awareness and human complexity in leadership. By recognizing that different situations require different leadership styles, this theory provides a framework for leaders to adapt their behaviors and strategies accordingly. This adaptability can lead to guiding teams more effectively and achieving organizational goals.

For example, the leadership style you’d use for a third-grade classroom wouldn’t be the same leadership style you’d use for a team of software engineers. Just as planning a birthday party requires different skills than planning an HR review. 

Many people can benefit from this style of leadership, here are a few:

• Current and aspiring leaders: Studying contingency theory equips leaders with the capability to assess situations, and then choose the right leadership style, increasing their effectiveness in leading teams and achieving objectives.

• People in human resources: HR professionals can apply the contingency leadership theory to design performance management systems that support leaders in adapting their leadership styles. Incorporating contingency theory training helps leaders from mishandling situations by using the incorrect leadership style.

• Students of leadership: People who study leadership can benefit from learning about contingency leadership theory because it provides a nuanced understanding of leadership dynamics and the importance of context in shaping effective leadership behaviors.

Contingency theory models

The general overview of contingency theory is that leaders should be adaptable depending on the situation. But within that theory lie several models that help you determine which leadership style to adopt:

Fiedler's contingency model 

Developed by Fred Fiedler, this model says that effective leadership depends on the interaction between the leader's style and the situation. Fiedler identified two primary leadership styles: task-oriented and relationship-oriented. The model suggests that the favorability of a situation—determined by leader-member relations, task structure, and positional power—determines which style will be most effective. For instance, in highly favorable or unfavorable situations, task-oriented leadership is more effective, while relationship-oriented leadership is most effective in moderately favorable situations.

Hersey-Blanchard situational leadership model 

Developed by Paul Hersey and Ken Blanchard, this model says that effective leaders should adapt their leadership style based on the maturity or readiness of their followers. The model identifies four leadership styles: directing, coaching, supporting, and delegating. The appropriate style depends on the followers' competence and commitment to the task. Leaders should assess follower readiness and adjust their style accordingly, moving from more directive behaviors with less mature followers to more supportive and delegating behaviors with more mature followers.

Path-Goal theory 

Developed by Robert House, this theory says that effective leaders clarify the path to goal achievement and provide support to help followers reach those goals. Leaders choose from four primary leadership behaviors: directive, supportive, participative, and achievement-oriented, based on the characteristics of the followers and the task. The theory emphasizes the importance of aligning leadership behaviors with follower needs and environmental contingencies to enhance motivation and performance.

Vroom-Yetton-Jago decision-making model

Developed by Victor Vroom and Phillip Yetton, this model focuses on the leader's decision-making process in determining leadership effectiveness. It provides a decision tree that helps leaders choose the most appropriate decision-making style (autocratic, consultative, or group) based on the characteristics of the situation, such as the importance of the decision, the expertise of the leader and followers, and the likelihood of follower commitment to the decision.

How can managers apply the contingency theory of leadership

First things first, let’s take a look at some different types of leadership that can be applied to the contingency theory of leadership. Then, we’ll talk about how you can implement it into your managerial role.

• Autocratic leadership: A leadership approach characterized by centralized decision-making and strict control, where the leader holds authority and makes decisions with little input from subordinates

• Democratic management: Decision-making is decentralized, and input from team members is encouraged, fostering collaboration and participation in the decision-making process. 

• Laissez-faire management: Leaders take a hands-off approach with minimal guidance or direction, allowing team members a high degree of autonomy to make decisions and manage their own tasks.

• Transformational management: Leaders prioritize inspiring and motivating followers through a compelling vision, charisma, and personalized attention, fostering innovation, and elevating organizational performance.

• Transactional management: This is leadership focused on the exchange of rewards and punishments for compliance with established goals and procedures, emphasizing clear expectations, monitoring, and feedback. If you can be easily bribed with snacks, you’re a fan of this leadership style. 

• Coaching leadership: Leaders guide and develop their team members by providing feedback, encouragement, and personalized support to help them grow personally and professionally.

• Charismatic leadership: Leaders use a captivating and persuasive style with an inspirational vision, compelling personality, and ability to inspire strong emotional connections with followers, driving organizational change and success. 

• Bureaucratic management: This leadership approach focuses on strict adherence to formal rules, procedures, and hierarchical structures, emphasizing efficiency, consistency, and standardization within the organization. 

• Situational leadership: This flexible approach encourages leaders to adapt their style based on the readiness and competence of their followers, employing different behaviors ranging from directive to supportive depending on the situation.

Steps to apply the contingency theory of leadership

 

1. Assess the situation: This is where you “read the room.” Evaluate the specific context or situation you are facing. Consider factors such as task structure, follower characteristics, and the organizational environment.

2. Match the leadership style to the situation: Determine which leadership style is most appropriate for the given situation based on your assessment. 

3. Be flexible: Recognize that no single leadership style is universally effective. You’ll need to be willing to adapt your approach based on changes in the situation or the needs of your team.

4. Seek feedback: Ask for feedback from your team members and stakeholders to gauge the effectiveness of your leadership approach, then make adjustments as needed.

5. Monitor and reflect: Regularly analyze the outcomes of your leadership actions and reflect on what worked well and what could be improved.