The world of work has changed, and with it the role of the manager. Successful companies need transformational leaders who are role models, motivators and at the same time sources of inspiration for their teams. Good news: transformational leadership can be learned.
What is transformational leadership?
The first theories of transformational leadership have been around since the 1960s. The sociologist James V. Downton was the first to coin the term, James McGrego Burns the one who particularly coined the term in 1978 and defined it as a situation in which “leaders and their followers help each other achieve higher levels of morale and motivation”.
Today, transformational leaders are understood to be leaders with a strong vision and charismatic personality. Transformational leaders inspire and motivate their teams, without micromanaging. They increase their employees’ commitment by giving them more room for creativity and more control over their work. In everything they do, they set a positive example for their employees and communicate a vision to influence and inspire them to develop and achieve more than they expect.
In short: transformational leadership transforms the dependency relationship (pay for performance) into an emotional relationship.
What are the 4 Is of transformational leadership?
With the concept of the 4 “I’s of Transformational Leadership”, Bernard Bass explains the psychological mechanisms behind transformational leadership. The four components, usually referred to as the “4 I’s of transformational leadership”, include:
- Idealised Influence – essentially the transformational leader acts as a role model, embodying the qualities that they want from their team. They lead by example, creating belief and trust in their employees.
- Inspirational Motivation – Transformational leaders create an inspiring yet understandable vision for their team, gaining their buy-in and motivation towards achieving the goals they set. Together, idealised influence and inspirational motivation drive belief and increased productivity in their team.
- Individualised Consideration – Transformational leaders work with each and every member of their team to help them grow and meet their goals. They show genuine interest and concern, providing support and training in a non-judgemental manner.
- Intellectual Stimulation – Transformational leaders encourage their team to be creative and innovative, coming up with new solutions that challenge current ways of operating. By challenging their followers, they focus on constantly improving their performance, and by extension that of the wider company.
How do transformational leaders behave in the everyday working environment?
Transformational leaders share six key traits:
- They have the ability to identify and articulate a vision.
- They set an example and provide an appropriate model to follow.
- They encourage cooperation and promote group goals.
- They expect high performance levels – from themselves and their team.
- They provide individual support, showing empathy and building trust.
- They foster continuous learning and development.
On a day-to-day basis these transformational leadership qualities means they are open and approachable for their teams, while providing them with the space they need to develop and grow. They will support through regular individual check-ins with every team member, building a rapport and mentoring them on how they can improve, without imposing their own ideas. They are conscientious and always open to learning and developing themselves through feedback. In meetings they ensure that everyone has the chance to contribute, valuing all contributions equally to build team harmony. They are charismatic, agreeable, extrovert and engaging, inspiring people to succeed through the force of their personality. However, at the same time they set and expect high performance from their team, meaning transformational leaders can be tough when necessary.
What is the difference between transactional and transformational leadership?
Transactional and transformational leadership are normally seen as polar opposites:
- Transactional leaders rely on a carrot and stick system of rewards and punishments to drive employee performance. Essentially team members complete their work in return for pay or opportunities for advancement, rather than being motivated by wider company goals.
- By contrast transformational leaders motivate team members to go above and beyond through their charisma, vision, and support. Team members want to do well, irrespective of any rewards, in order to live up to the standards that transformational leaders set.
However, it is important to understand that the same leader can display both transformational and transactional styles. For example, they can use a transactional approach to ensure that routine, necessary tasks are completed but overlay this with transformational leadership to inspire innovation and creativity. This means that they are still viewed as transformational leaders by their teams.
Why is transformational leadership important?
The effectiveness of transformational leadership is now well proven. It activates employees’ intrinsic motivation and leads to higher employee engagement, higher loyalty and makes employees perform better to achieve the common goal.
Especially where organisations are moving to more team-based structures and want to use the individual talents of each team member and drive change, transformational leadership is important.
Over time, this style of leadership has become increasingly critical to the success of organisations – and is an important topic especially in these uncertain times.
Three factors make transformational leadership vital to business success today:
- Good employees are an important success factor and competitive advantage: Organisations increasingly rely on the skills, experience, and ideas of their people to differentiate themselves in the market. At a time when all sectors have been disrupted by digitization and new competition, the businesses that thrive will be those that engage, motivate, and get the best out their people through inspirational leadership.
- There has been a radical shift in how organisations are structured: Gone are old-style “command and control” hierarchies, replaced by more flexible team-based structures. In many cases post-pandemic hybrid working mean that team members are often not in the office five days a week, meaning that team leaders need to inspire, motivate, and support them at a distance.
- The needs of customers and employees have radically changed: Consumers are more demanding and want new products, services, and experiences that old-style leadership cannot deliver. Equally, new generations entering the workforce want to work for companies and leaders that share their values and motivate them through understanding and inspiration, rather than micromanagement. At the same time employees are worried about the current economic and geopolitical situation and want support and understanding from their managers. Senior management therefore has to be at the forefront of leading transformational change.
Tivian’s Future of Work Report has also shown: The role of the leader has changed. Transformational and empathic leadership is the key to success.
What are the challenges of transformational leadership?
There are two main challenges to creating effective transformational leadership within an organisation.
1. Developing managers
The first challenge can appear the hardest. Many leaders do not innately possess the full range of transformational leadership skills. They may lack charisma, communication skills or the ability to inspire their teams, preventing them from developing into complete transformational leaders. The positive news is that these skills can be learnt and developed over time, by listening and acting on 360 feedback from those around them.
2. Gaining buy-in from employees
Secondly, employees may initially be suspicious of the culture change behind introducing transformational leaders, particularly if they are just used to working with transactional ones. They may not believe that managers are genuinely interested in helping them improve and worry that admitting current weaknesses will be seen negatively. Solving this issue takes time, with transformational leaders demonstrating through their own actions how committed they are to their team, building a culture of openness and support that overcomes any employee doubts. Essentially managers need to show authentic transformational leadership to get staff on-side.
How do you change the leadership role?
To succeed, businesses need to develop transformational leaders across the organisation. That requires a combination of planning, transformational leadership training and cultural development, driven by HR and a commitment from individual managers to self-improvement.
The role of HR teams
Adopting the transformational leadership style is a major change in the culture of many organisations. It therefore needs to be supported through a clear and effective change management programme that sets and communicates a vision, and supports it with processes, policies, and measurement to monitor change. It is vital that HR teams ensure that employees buy into the new vision and understand and support change.
On the leadership side, HR has to put in place a full program to encourage and support managers as they develop into transformational leaders. This should include training, regular check-ins, transformational leadership coaching and mentoring. Most important is creating a framework for collecting 360 degree feedback from the teams and superiors of individual managers so that they can continually learn and improve.
The role of each manager
A focus on continuous improvement and development is one of the key traits of the transformational leadership philosophy. They must therefore be open and willing to learn from feedback from those around them, whether it is positive or negative. Running regular 360 degree feedback exercises provides self-awareness into performance and where they can improve. Leaders therefore need to learn from feedback by triggering their own 360 degree feedback exercises on a regular basis or at key moments, such as after major team changes. By understanding and acting on feedback they will strengthen trust with their teams and encourage and build a culture of open discussions and feedback.
The role of companies
Today companies need to develop transformational leaders at all levels if they want to thrive in increasingly fast-moving and volatile markets. It is important to democratize leadership development.
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