Laissez-faire is a French term that refers to the idea of letting people self-govern and make choices about their behavior. The direct translation is “leave alone.” It originated as a way to describe unregulated markets, based on the theory that when individuals can do business in the way that they choose, commerce functions the best and benefits society as a whole. The laissez-faire ideology has since expanded beyond the economy and impacted social habits and leadership structures in many workplaces.
What is laissez-faire leadership?
Laissez-faire leadership is a management style that encourages individuals to have a high amount of freedom when setting and accomplishing goals. In laissez-faire leadership environments, managers and company leaders serve a support role to their staff, enabling staff to set their own deadlines and make decisions amongst themselves. Laissez-faire leadership is one of three main types of management, the other two being authoritarian and democratic. Successful laissez-faire leaders focus on delegating tasks and cultivating an environment that empowers their employees to make the best choices for themselves.
Related: 8 Types of Management Styles
Characteristics of laissez-faire leadership
Laissez-faire leadership can have many different forms due to the ability of each employee to make their own decisions, but most laissez-faire environments have a strong culture of honesty and trust among employees. Managers are comfortable delegating important tasks to others and coordinating employee activities based on shared goals. Employees communicate freely with one another and have the ability to pursue their own ideas and try new things.
Advantages and disadvantages of laissez-faire leadership
Laissez-faire leadership can be a highly effective management style, but it does have certain drawbacks that make it more appropriate for some situations than others. Just like authoritative leadership can be helpful for people who need guidance and harmful for highly capable and independent employees, laissez-faire leadership can be beneficial in some situations and ineffective in others. Understanding the benefits and drawbacks of laissez-faire leadership can enable you to prevent key issues and cultivate an environment of success:
Laissez-faire leadership tends to be most effective in fast-moving, creative industries that attract highly passionate and motivated employees. If you have a team that you can trust to manage their own work, you can focus on generating a more productive framework for growing your business. The main benefits of laissez-faire leadership are:
- Encouraging your staff to take risks and be creative when implementing their own ideas
- Driving growth by using your time more efficiently and allowing employees to take over day-to-day duties
- Creating employee buy-in by encouraging employees to contribute to the company’s operations and share leadership within smaller teams
- Improving flexibility and developing an agile business that can rapidly respond to changes in the market and refine its business practices
- Increasing employee retention by creating a welcoming and affirming environment that trust employees to make smart choices and rely on their colleagues to do their jobs correctly
Using a hands-off leadership style comes with potential challenges. It can be challenging for new employees or people entering an industry with a high learning curve because they don’t have direct guidance, including:
- Lack of support when employees have a problem or lack the resources to complete a task successfully
- Decreased accountability among individuals because they do not have a direct leader giving them guidance and setting goals on their behalf
- Employees who are not highly passionate about their field may have trouble motivating themselves to seek out improvement or put in extra effort at work
- Confusion among employees about who has final authority on different projects and how to resolve problems or disagreements within a team
Examples of laissez-faire leadership
There are many famous laissez-faire leaders who implemented a supportive management style in their government or business instead of issuing direct orders. Some examples of laissez-faire leaders throughout history are:
Assuming the throne at the young age of 18, Queen Victoria relied on a team of trusted colleagues to help govern the United Kingdom. Queen Victoria is known for keeping business and government separate during her rule from 1837 to 1901. Her government focused on improving overall conditions in society to enable businesses to flourish. Queen Victoria’s ambition to help increase quality of life for her citizens meant that she spearheaded voting reform, housing projects, educational development, working class welfare support and the abolition of slavery.
This required her to place her trust in other members of the monarchy and parliament to ensure the completion of each large-scale project. Her ability to select good advisers and implement laissez-faire leadership style made her a beloved figure for much of her reign.
President Herbert Hoover was a staunch supporter of laissez-faire economics, which had both benefits and drawbacks. His hands-off strategy and belief that a strong economic system would fix itself made it difficult for the United States to emerge from the Great Depression. Although Hoover is one of the examples of how laissez-faire leadership can go awry, his leadership style did enable projects like the Hoover Dam, which was instrumental in stopping flooding and contributing to clean energy using water-powered generators.
As the head of Apple, famous for its innovative technology and designs, Steve Jobs used laissez-faire leadership to encourage creativity and rapid development at his business. He is known for the quote, “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” By focusing on hiring competent individuals, Jobs developed trust and confidence in his team, allowing them the freedom to take risks and stay internally motivated and empowered.
Jobs’ laissez-faire leadership style did come with some negative attributes. Because he placed so much trust in his employees, he was known as a strict disciplinarian when they failed to meet his standards and expectations.
Andrew Mellon, an American businessman in the 1900s, implemented laissez-faire leadership by selecting highly talented managers and trusting them to expand his business. Starting his career working at his father’s bank, Mellon quickly expanded the venture and started to build an empire based on delegation, personal responsibility and flexible management. He was vocal in his disagreement with industry regulations, tariffs and taxes, believing that this level of micromanagement would stifle creativity and limit innovation. Mellon’s commitment to laissez-faire leadership allowed him to branch into many areas including philanthropy, banking, manufacturing, politics and even art collecting.
Berkshire Hathaway CEO Warren Buffet has expanded his business across several industries by delegating leadership to individuals and encouraging a laissez-faire company culture for all employees. Buffet has a strong reputation as a savvy businessperson who uses his flexible leadership methods to identify profitable investment opportunities. By eliminating bureaucracy at his business, Buffet was able to identify dedicated employees who thrived when given autonomy and freedom, ultimately building a powerful work environment based on trust, humility and individual recognition.
Each of these leaders has different interpretations of how laissez-faire leadership should work, with some being more involved than others. As a company leader, you can decide to what extent you want to be involved with your employees’ decisions and activities.