What is Transformational Leadership: How To Lead

Transformational leadership can elevate the standards of the workforce and company as a whole.

  • Release Date: 16 March 2023
  • Update Date: 27 December 2023
  • Author: Speaker Agency

In the global business world, there’s more than one way to lead a team. Some leaders take a hands-off approach by just letting their team get on with things. Others take a strict approach, Steve Jobs was famously one such leader.

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And then there’s transformational leadership. This type of leader takes control, brings passion to the workplace, and works to bring the best out of their employees. It’s a highly engaging form of leadership.  It  can enhance the morale of the workplace and yield significant bottom-line results.

What is Transformational Leadership?

Transformational leadership is a management approach that encourages leaders to motivate and inspire their employees. This in turn delivers success for the organisation. The term and approach is the brainchild of James Macgregor Burns, who wrote about it in his book, Leadership

The book  analysed the leadership styles of historical figures such as Franklin D. Roosevelt and Gandhi. Some modern transformational leadership examples include Oprah Winfrey, Reed Hastings (of Netflix), Richard Branson, and Volodymyr Zelensky.

Inspiration is at the heart of transformational leadership. Leaders that follow this leadership style offer an inspiring vision to their followers. Improving productivity, the quality of work, and employee retention rate in the process. Their goal is to elevate the standards of employees and make them buy into the organisation' s goals. 

The Four Pillars of Transformational Leadership

According to Bernard M. Bass, the four pillars of transformational leadership are as follows:

Idealised Influence

Employees must look up to and admire the leader for transformational leadership to work. Transformational leaders put the needs of their employees and the organisation before their own needs. They adhere to the company’s core values and lead by example. In the process, employees have a positive impression of the leader. 

Inspirational Motivation

An inspiring leader encourages, motivates employees. She will instil a sense of purpose, and confidence in their followers. They elevate the purpose of working by evoking higher ideals and values. 

At its core, inspirational motivation depends on a clear vision for the organisation as well as achievable goals. The vision and goals are repeatedly reinforced through positive approach and enthusiasm. 

Intellectual Stimulation

Transformational leadership encourages followers to deliver their best work. To do this, the leader must create an environment where employees have the autonomy to use their creativity and intellectual assets. This will enable them to find their own solutions to problems. In essence, it’s the opposite of micro management, one that gives trust to employees.

Personalised Consideration

Personalised consideration treats each employee as an individual rather than a cog in the machine. It recognises that each employee has their own skill sets, needs, and professional aspirations. With individual consideration, the leader takes the time to understand their employees on a deeper level. Puts an individual framework in place that helps to get the best from the employee. 

Traits of Transformational Leadership Style

Not everyone is cut out to be a transformational leader. Certain personality types are better suited than others. An analysis of transformational leaders identified the following traits that many transformational leaders shared. It’s important to note that even if you don’t naturally have all of these traits, many can be nurtured.

Extraverted Personality

Transformational leaders don’t lock themselves away in their offices. They’re among their employees, from whom they give and receive energy. As such, this type of management style tends to suit extroverts. Extroverts are more likely to be comfortable projecting a positive outlook and enthusiasm. 

High Self-Esteem

Low self-esteem has no place in transformational leadership. The leader must be anxiety-free, confident, and full of enthusiasm. All of which are by-products of high self-esteem. These qualities help to provide psychological comfort to their followers. Conversely a leader who struggles with their own self worth. Will struggle to instil the level of confidence required for transformational leadership to be effective. 

An Open Mindset

A transformational leader must be open to new ideas and ways of doing things. They tend to think outside the box and analyse situations without resorting to the obvious and traditional methods. They’re forward-thinking and lean towards modern solutions rather than repeating the status quo. 

Internal Motivation

Transformational leaders tend to have powerful internal motivation. They’re self-starters who have a vision for the organisation and are determined to make it a reality. They’re driven by lofty ideals and goals rather than prestige or money. 

A People-Person

Transformational leaders care about their employees. They understand the importance of support, respect, and concern in the workplace. They tend to be agreeable people who can get along with others extremely well.

Their Courageous

If transformational leadership was easy, then everyone would do it. But it’s not — it takes courage to try new things, put trust in employees, and make tough decisions. A transformational leader isn’t afraid to take the hand off the brake, even if it risks failure. 

The Effects of Transformational Leadership

It takes time to become a transformational leader. But once you have, you should see some tangible improvements in the workplace. While this form of leadership isn’t the only factor that contributes to making an organisation better. Research has suggested that it can be responsible for a variety of improvements that can make a lasting, real impact. The benefits include:

Improved Team Performance

Transformational leadership theory aims to elevate the standards and output of the workforce. In one study, researchers found that companies that adopted a transformational leadership style saw a multitude of benefits. These included  increased team performance, increase in meeting targets and improved bottom line.

Enhanced Employee Performance

Transformational leadership elevates the standards for the entire organisation. It encourages everyone at the company to perform at their highest level. Inspiration is at the heart of transformational leadership. It’s not just the leader who shows inspiration, but the employees too. 

With the support of the leaders, employees are more likely to invest in their professional development. They will collaborate with colleagues, and take more risks and challenges that can benefit the organisation. 

Employee Satisfaction

Organisations with a transformational leader at the helm tend to benefit from enhanced employee satisfaction and loyalty. At its core, transformational leadership helps to make employees feel like valuable members of the organisation.  This will help retain talent migration. This helps to increase the company’s employee retention rate. 

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The Downsides of Transformational Leadership

Transformational leadership can be highly beneficial, but it’s not without its problems. If you’re adopting transformational leadership in your organisation, be aware of the following issues:

  • Reliance on ‘leading by example’ rather than a clear, focused approach.
  • Reliance on internal motivation instead of external motivation may lead to employee burnout. 
  • Changing too much at once can disrupt routines and productivity.
  • The closer working relationships may result in the leader preferring certain employees.

Transactional and Transformational Leadership: Key Differences

Transactional and transformational leadership provide two very different leadership models. They share a common goal i.e. making the company better tomorrow than it is today. Where targets differ is how to achieve those goals. 

Transactional leaders tend to believe:

  • Employees are motivated by rewards and punishments.
  • Employees perform best when they follow the instructions of the leader.
  • Chain of command should be well-defined and absolute.
  • The leader must micromanage and/or closely observe employees.

As you can see from those four points, transactional leadership style has little in common with transformational leadership. It’s a more traditional leadership model that, while it can be effective, often stifles innovation and creativity. Holds a company back from exploring new ideas, and prevents employees from reaching their full professional potential.

There are advantages to transactional leadership. For instance, it tends to create a sense of fairness within the organisation and involves easy to understand systems. For example: “do this and you’ll be rewarded; do this and you’ll be punished. 

The approach can also be highly effective when dealing with a crisis situation. Even leaders who generally follow the transformational leadership model draw upon some tenets of transactional leadership from time to time. 

Final Thoughts

There are more straightforward leadership styles, but for modern, forward-thinking organisations, there are arguably none more effective than transformational leadership. Offering a host of benefits, it’s a leadership style that has won big praise. Mainly for the positive impact it can have on employee performance and satisfaction, as well as the organisation as a whole. 

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