Managerial styles in the context of OCAI

How does the approach to leadership differ across different corporate cultures?

Every manager, whether consciously or unconsciously, influences corporate culture by how they lead their team.  

It is not surprising that situational leadership can increase employee performance by up to 34% and improve collaboration efficiency by up to 43% (Blanchard Companies study, 2022). Conversely, a poor alignment of management style with conditions (team and corporate culture) can lead to frustration, demotivation, and ultimately high turnover (with a documented increase in turnover of up to 40% under inadequate management styles according to McKinsey Quarterly Leadership Insights, 2021).

The fact that junior teams have different management needs than senior ones is probably nothing new. However, the significant impact of corporate culture on management style is often an overlooked reality.

The OCAI model (Organizational Culture Assessment Instrument) distinguishes four main types of corporate culture: innovative, hierarchical, clan, and market-oriented. Each requires a different approach to leadership and specific skills. Therefore, management style is not only a matter of personal approach and team type but also of how well it fits into the company environment.

Because there is never just one way to reach a goal, let's look at exemplary (and easily identifiable and measurable) management styles that are most often associated with dominant corporate cultures. What does such a leadership style look like in different types of corporate cultures? And what are the most common risks of these management approaches?

Innovation: Freedom and Inspiration

Managers in innovation-oriented companies, (typically startups, companies in disruptive environments, technology companies) must support creativity in the interest of innovation, maximize psychological safety, and harness the potential of talents.

• Manager Leader – excels in the growth phase of companies like Apple, Google, and Tesla. The manager creates a context, shows the team direction, and inspires them to find their own solutions. Employees have the freedom in how they achieve the goal, both the manager and the team believe that the best results come from enthusiasm, intrinsic motivation, and learning from mistakes.  

  ❌The risk of managing by context is present with junior team members or insufficiently autonomous teams for whom the leader's vision is intangible. 

  
  

• Democratic Manager – excels in loyal senior teams that have innovation potential that needs to be harnessed and developed. Important decisions are born together, and thus employees feel more involved and motivated. A good example of a democrat is Daniel Ek, CEO & founder of Spotify. 

  ❌The risk of democrats is excessively slow decision-making, or it may be hindered by incompetence, inexperience, or even low loyalty of their team.

The managerial approach of leaders is nicely captured by Steve Jobs' famous quote “We're here to put a dent in the universe”

Hierarchy: Structure and Precision

In organizations with a well-defined structure, such as car manufacturers, banks, insurance companies, or hospitals, managers are expected to emphasize compliance with rules and standards.

• Manager “Driver” – Ideal for logistics or manufacturing. The manager emphasizes clear rules and goals, with organization of work and efficiency being important. Everyone knows what to do, tasks are clearly defined, and deviations from procedures are not welcome. Management maintains a stable work pace. A typical representative of this category is Christian Sewing, CEO of Deutsche Bank.

  ❌The risk of drivers is the inability to take a step back and view from a different perspective. They often struggle to leave established paths.

• Manager Perfectionist – A more problematic management style, but often necessary in fields like pharmaceuticals or the automotive industry. The perfectionist assigns precisely defined tasks, monitors their fulfillment, and points out even minor mistakes and shortcomings. A worthy example of this management style could be Akio Toyoda, former CEO of Toyota, known for his “zero defect” culture.

  ❌Perfectionists typically tend toward micromanagement, which can demotivate teams, leading subordinates to lose their own initiative.    

The hierarchical culture of precision is aptly described by Akio Toyoda's quote “It is in Toyota's DNA that mistakes made once will not be repeated.”

Clan: Human Approach and Development

In organizations where cohesion and long-term development are important, such as family businesses or companies in early growth phases, and firms that grow through human potential (common examples include companies like IKEA, Zappos, Patagonia), these managers typically excel:

• Developing Manager – manages people through developing their skills, coaches, mentors, and supports. For instance, in a consulting firm, a manager helps junior colleagues acquire new skills and advance in their careers. Instead of giving orders, they provide advice and support learning through personal experience. Regular one-on-ones are fundamental in this culture. 

  ❌The risk of this management style is primarily the duration, where real results may only manifest over time, or sweeping conflicts under the rug in the name of “good atmosphere and chance for all.”

• Caring Manager – A caring manager primarily focuses on fostering a good atmosphere in the team. They listen to people, mitigate conflicts, and create a friendly environment in a parental manner. Affiliative management is typical for managers in other cultures during stages when they need to stabilize the team. A fine example of a caring manager could be Horst Schulze, founder of Ritz-Carlton Hotel Company.

  ❌The risk of the caring manager is that they do not develop the team sufficiently and do not lead them toward independence. This style often compensates for other problems and shortcomings in their management.

A managerial motto that reflects the clan culture at the Carlton Hotel Company is telling: “We are ladies and gentlemen serving ladies and gentlemen.”

Market: Emphasis on Results

In highly competitive environments, such as financial markets or sales organizations, managers primarily focus on high performance and maximum efficiency.

• Performance Manager – Usually excels in sales, sets clear goals, and tracks results, metrics, and KPIs. They strive for maximum performance, often motivating through pressure. A typical performance leader is Jeff Bezos and his management style during his tenure at Amazon, which continues to shape the corporate culture even under the new CEO.

  ❌The risk of performance managers is excessive harshness, lack of interest in the human factor of the team, leading to low loyalty among subordinates.

  
  

• Maximalist Manager – Often successful in private equity or startups under strong investment pressure. The investment firm manager expects their people to think strategically, make quick decisions, and respond to market changes. They are uncompromising and want to see results. Good performance from subordinates is taken for granted, and they only point out what could have been done better. A typical extreme representative of this management category could be Elon Musk 

  ❌The risk may be team demotivation due to lack of positive feedback. Under maximalist managers, especially newcomers or those subordinates who have a greater need for positive stimuli tend to suffer.

At Amazon, a managerial mantra reflecting the performance-oriented approach was coined: "You can work long, hard, or smart, but at Amazon.com you can't choose two out of three."

So how to adapt your management style to the company's culture?

In summary, there is no single managerial craft. The management style always needs to be adapted not only to the needs of the team but also to the type of corporate culture. It is crucial for any further progress to know not only the target corporate culture of the company but also your leadership style. Working consciously with this information and developing your managerial skillset according to current needs can be helpful. 
A few key questions can assist:

• Does my leadership style align with the culture of the company and the team I am currently leading?

• Does the company need to shift in a different direction, and should I adjust my approach?

• How can I develop my skills to better meet the needs of the team and organization?

Aligning your authentic management style with the needs of the team and corporate culture is not always an easy discipline. A purely natural way of leading (I manage people “as I’ve naturally evolved”) can work very well if the manager's personality is in sync with the company conditions. Such 100% alignments are, however, rare and the correction of management style is often an essential part of a successful managerial role. It is not necessary to lose one's own managerial authenticity but rather to consciously utilize various management styles depending on what the particular situation demands.