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Transformational leadership is a leadership style that has gained traction for effectiveness in the workplace. It places a higher importance on interpersonal skills and authenticity. Is this surge in popularity worth its weight in gold? Or is this another fool’s gold methodology? What does transformational leadership mean?
What Is Transformational Leadership?
Transformational leadership styles shape leaders into figures of encouragement and inspiration for their team. It creates a leader that is a cheerleader, confidant, and role model.
The leader promotes success by considering the needs of their team and motivates necessary changes. Transformational leadership fosters trust in a group by empowering employees when they make decisions.
When the methodology is active, leaders kick micromanaging to the curb and allow creative solutions. Management inspires their workforce through authentic relationships that will amplify growth.
Development History
The style was first developed in 1973 by James V. Downton, shortly evolved later in 1978 by James MacGregor Burns, and then further evolved by Bernard M. Bass in 1985.
James V. Downton was a sociologist whose research focused on charismatic leaders. He was the first to name the term, but it was later researchers that defined the style as we know it today.
James MacGregor Burns’s developed his contribution to the style through his research into political leaders. He wrote about two opposite leadership types: transactional and transformational leadership. Burns said transactional leadership is when “leaders and followers make each other advance to a higher level of morale and motivation.” He described the target of the approach as changing the perceptions and aspirations of employees.
Bernard M. Bass took the style further by explaining how to measure successful transformational leadership. A leadership style needs to have a proven impact for it to be useful. When employees have feelings of respect or trust towards their leader, Bass considered those to be the signs of a successful transformational leader.
The transformative leadership style might not be new, but its expansion across industries continues to spread. The focus on creative problem-solving has made it popular in the fast-paced IT industry. Healthcare, education, and government agencies are also sectors that frequently use the method.
Transactional Leadership
The polar opposite method, Transactional Leadership, motivates through the classic carrot and stick methodology. Employees receive rewards when they do well and punishments when they error. Prizes vary but include pay raises, role advancement, and recognition.
An employee earns rewards for fulfilling their role, no more, no less. This practice lessens the responsibility placed on employees, but it limits their potential. Rather than train employees to use guidelines to make new solutions, transactional leaders cap the process by restricting employee roles. Transformational leadership twists off that cap and asks all levels of the workforce to be innovative.
Systems under transactional leadership remain predictable with constant supervision. The emphasis is on dependable procedures with expected outcomes. Every scenario has an outlined response. Rather than problem-solve on their own, employees seek answers from leadership.
For a transactional style to function, leadership must maintain a consistent reward and penalization system. If a leader promises rewards, but none are received, leaders are not living up to their end of the bargain. The same is true with the opposite situation if errors are unreprimanded. If employees are not encouraged to maintain the system, the system produces discouraging performance.
When all is going well, the system can be reliable and effective. There’s certainly nothing wrong with establishing a routine. The transactional leadership style is rigid and doesn’t allow for resourceful deviation. Short-term goals are emphasized rather than long-term goals.
It’s consistency versus creativity. Transactional leadership places more pressure on stringent procedures, but transformational leadership relieves stress by allowing the system more flexibility.
Communication for Transformation
Transformational leadership requires soft skills.
Workers need hard skills to complete tasks. Creating spreadsheets, research capabilities, proficiency in company-specific programs, or data entry are examples of hard skills. Hard skills are all essential to doing the job. Successful job applicants might have a long list of hard skills on their resumes.
However, there’s a substantial difference between being able to do the job period and doing it remarkably. Soft skills, like time management, multitasking ability, and adaptability, allow someone to work better. Interpersonal skills, such as communication, are soft skills that enable leaders and their employees to thrive in a workplace.
Communication skills are soft skills essential to the transformational leadership style.
Communication Skills
Communication relies on more than words. Verbal inflection, how you say things, and body language, how you present yourself are as vital as what you say. Inspiration and authenticity are key terms that determine successful communication for transformational leaders.
Engaged Listening
The best communicators are also great listeners. Generating an open dialogue with equal back and forth shows employees that their leader understands what they say. If someone feels heard, they’re more open to listening to ideas that might challenge them.
Trust
If you want open communication, a leader first needs to establish trust with an employee. There is no quick, one-step way to earn trust. Leaders should actively listen and incorporate group ideas into final decisions. Over time, actions that demonstrate that a leader is collaborative can create trust.
The Four I’s
There are four elements, called the Four I’s, involved in the Transformational Leadership approach.
Idealized Influence
A leader needs to be an authentic role model for the group.
What is an authentic workplace role model? Role models are people worthy of imitation. It’s not as simple as monkey see, monkey do. The keyword is worthy. A leader needs the respect of their employees to earn the title of workplace role model.
If someone always has a contagious smile, we might want that same effortless positivity. When we know someone consistently meets deadlines, we might be encouraged to compete. If someone delivers creative problem-solving methods, we might be inspired to create one-of-a-kind solutions for ourselves.
Idealized influence is all about acting right and inspiring positive behavior in others.
Maybe not every employee wants to wear the biggest smile, but everyone wants to feel good about their work and environment. If a leader is approachable, an employee is more likely to reciprocate.
Being an example won’t instantly change all employees into overachievers overnight. Being an inspirational leader means acting and reacting. Be ready for open-minded conversations about behavior standards. Be available for advice on how to reach those standards.
Inspirational Motivation
You might have heard this hypothetical before:
Two workers are digging a ditch. If you ask one what they’re doing, they might answer with the obvious: “I’m digging a ditch.” Ask the second digger the same question, and they might answer, “I’m building a cathedral.”
Both workers are digging, but the second worker understands that the ditch is only one step in a long-term construction project. Without the ditch, the worker laying the foundation can’t begin. If there’s no foundation, there’s no cathedral.
The diggers’ tale demonstrates the difference between workers whose minds focus on a single task and workers whose minds see the bigger picture.
A leader can change the way employees envision their tasks. One worker might be a small gear or a large gear, but the clock won’t tick without all the pieces. Every task matters, but a leader can help employees notice that their task matters.
Intellectual Stimulation
Not all ideas are great ideas, but if employees are too afraid to share any thoughts, you’ll never know the difference. Transformational leaders foster workplace environments where every member of the team feels valued and is comfortable sharing ideas.
Some of their ideas won’t work. A leader needs to have the skills to have conversations about flawed ideas without isolating employees. By being a guide and sounding-board in a safe space, a leader creates an environment of active team players.
Leaders learn from their actions and the actions of their team. Performance will improve when a leader shares their insights and shares the experience of others.
Individual Consideration
A team should have common goals, but the individuals on a team also have individual needs. A leader understands that every member has unique motivations and values, and a leader should accommodate those needs.
The goal is to have a team that functions together. No one person requires more attention but rather specialized attention. Establish genuine communication. Don’t go down a checklist of talking points.
Another word for this element is coaching. Think of the best coaches in your life, or even in entertainment. The coach isn’t throwing the ball or running across the field. The coach develops strategies and communicates plans with their players.
Great coaches find potential in their players and isolate the skills they need to refine. Sometimes this takes practice, but that’s why teams run drills before the big game.
Is Transformational Leadership Effective?
Harvard Business Review studied what they crowned the Transformation 10. The list ranks a group of leaders that utilize types of transformational leadership. The listed companies have experienced growth since embracing the technique. Some were known quantities before but expanded thanks to innovation.
Harvard Business Review assessed the success of the companies using three factors.
- New growth – Was there an increased revenue attributed to newly developed projects and services?
- Core repositioning – How has the core business adapted to new changes?
- Financial Performance – Has the company overall shown profit or other economic growth during the transformation period?
Judges narrowed down a long list of companies and declared a top ten for organizations that showed the most improvement.
The Transformation 10
- Jeff Bezos, Amazon
- Reed Hastings, Netflix
- Jeff Boyd and Glenn Fogel, Priceline
- Steve Jobs and Tim Cook, Apple
- Mark Bertolini, Aetna
- Kent Thiry, DaVita
- Satya Nadella, Microsoft
- Emmanuel Faber, Danone
- Heinrich Hiesinger, ThyssenKrupp
Out of its total revenue, Amazon’s was the lowest new growth with 10%, and Apple was the highest with 80% new growth revenue. The other companies measured mainly in the middle of that range.
The range demonstrates that change takes time to accomplish great things. Leadership must be capable of a split focus to stimulate new growth and support the core business through updating practices.
Another key to the success of overall company growth was to develop a plan. Transformational leadership considers long-term goals. That doesn’t mean there are no short-term goals. Instead, plans for the short-term should further long-term goals.
Harvard Business review’s Transformation 10 watched for areas that their business could naturally add to their core business and heeded cultural changes that would demand adaptations.
Netflix
Netflix has famously dominated the streaming business. Much of their achievement is due to being one of the first. By starting early, they’ve earned a large corner of the market.
In the early days, Netflix was a mail-delivery DVD-rental service. The core business was successful, but a new core-adjacent revenue source showed potential: online streaming.
When Netflix transformed into an online platform, co-founder Reed Hastings tried to continue the DVD-rental with a new name, Qwikster. No surprise, what was once their core business became obsolete, and Qwikster met with customer backlash.
Hastings had to adapt his long-term plans to deal with the consequences of that backlash. However, his long-term goals regarding the fruitful new revenue area, online streaming, continued to see profits. Transformational Leaders make long-term plans but also aren’t afraid to fiddle with them.
Hastings listened to feedback. It’s hard to imagine a world where he didn’t adapt to a changing world. Netflix’s 190-million-plus customers worldwide are grateful for the company’s innovation.
Checklist of a Transformational Leader
Suppose your company is on the road to echoing the transformational leadership model. How do you know if you’ve done it? There might not be balloons waiting to drop from the ceiling, but there are signs that a leader is following the model effectively.
A transformational leader is someone who:
- Curates and maintains a safe environment for employees to share ideas
- Creates a company culture where employees can envision the value of their role
- Exemplifies the standards of their organization
- Establishes clear guidelines for values, priorities, and standards of the team or company
- Strategizes for long-term growth and new sources of revenue
- Encourages cooperation and open communication
- Prepares employees through coaching and mentoring but allows them to make decisions and take ownership of their tasks
