Although most organisations believe that strong managers with a target and numbers-driven approach are crucial to success during a recession, a new study has revealed that bosses with a more democratic, people-oriented style generate better performance.

According to a two-year research project undertaken by the Work Foundation, self-aware leaders who focus on developing mutual relationships and respect were most effective in engaging and motivating personnel to do their best.

Author Gemma Pearson said: "Outstanding leaders are focused on performance, but they see people as the means of achieving great performance and themselves as enablers. They don’t seek out the limelight for themselves but challenge, stretch and champion others, giving them the space and support to excel."

The study called ‘Exceeding Expectation: the principles of outstanding leadership’ was based on more than 250 in-depth qualitative interviews with 77 managers, 15 of which were women and 62 men, at BAE Systems, EDF Energy, Guardian Media Group, Serco, Tesco and Unilever.

It found that there were three key themes characterising outstanding leaders. Firstly, they thought and acted systematically and were driven by a sense of purpose. Rather than compartmentalising issues, they tended to see things in the round and understood that action follows a reaction. They also understood that if a situation of mutual gain can be set up, it creates loyalty and commitment, while confidence and trust are likewise motivational and encourage creativity.

Secondly, the best bosses were people- and relationship-centred rather than simply people-oriented. They gave personnel significant amounts of time and focus and understood that both engaging staff effectively and harnessing their capabilities was crucial to achieving exceptional performance on a sustainable basis.

Thirdly, self-aware leaders were confident without being arrogant and were highly motivated to achieve excellence. They were focused on organisational outcomes, vision and purpose, but understood that they could not achieve success by themselves. Instead they knew that it was their position as a role model, their interactions with others and their influence in supporting staff to do their best that was crucial.