What is transformational leadership? (2023)

What is transformational leadership?

Transformational leadership is a management philosophy that encourages and inspires employees to innovate and create new ways to grow and improve the path to a company's future success. With this method, managers give entrusted employees the freedom to make decisions and support new problem-solving approaches.

Transformational leaders are passionate about their work and the company's mission while helping all employees succeed. Another important characteristic is their ability to identify themselvesbusiness processesthat no longer work and focus on adjusting or changing them as needed.

While transformational leaders are often admired, they don't seek praise or flattery because their focus is on doing what's best for their organization. Risk taking is calculated based on the gathering of information from team members, the leader's own instincts and experience. Decisions are made in light of the organization's values, vision, and goals.

Why is transformational leadership important?

There are many types of leadership styles. While some may benefit the individual leader or provide short-term results, transformative leadership inspires actions and habits designed to help an organization over long periods of time. This approach has gained popularity because it can be the proverbial win-win situation, helping both the leader and the organization to succeed.

For example, rather than focusing on short-term tactics or issues, a transformational leader prioritizes understanding what motivates individual employees and helps them focus on the organization's long-term vision.

These leaders are also not afraid to be challenged or consider constructive criticism. This allows employees to contribute their ideas and constructively criticize the new guidelines. Leaders also take risks and encourage suggestions from others so that everyone contributes to team achievement. Instead of a rigid approach to leadership, transformational leaders practice team building and encourage coaching. Building confidence in people's ability to succeed and learning from mistakes better prepares organizations for sudden changes, such as B. a reorganization or downsizing.

Learnhow to build a teamthat work well together by focusing on three key factors.

Transactional vs transformational leadership

Different managers may adopt different leadership styles depending on the situation and the needs of the organization. There are times when a more transactional approach is required to ensure key short-term goals are met and operations run smoothly. However, the transformative approach is encouragingbusiness Innovation, new ideas and long-term goals.

transactional leadership

transactional leadershipuses clear structure and guidance to determine and communicate an employee's performance needs. It also uses a system of rewards and punishments based on the results. This transactional approach to leadership tends to favor planning and short-term results. While this is more of a top-down approach than others, ideally people are given the resources they need to do their jobs effectively and the goals are agreed upon collectively. Employees are set so-called SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals.

Transactional leaders are also exceptionally good at managing and don't interfere when things go as expected. But negative results, such as missed sales targets or production delays, also immediately draw attention.

transformational leadership

While transformational leaders respond to issues and concerns as they arise, they are more proactive in continually fostering new ideas and approaches. They focus on ambitious or long-term goals that are harder to quantify. However, the transformation leader puts more traditional and quantifiable goals, such as a share of sales or positive customer feedback, into the big picture.

Transformational leaders also promote actions that help the team and the company achieve organizational goals and its vision of success, and they motivate employees by appealing to their own interests. This is developed by involving employees in the decision-making process, leading to greater agreement on agreed goals. For example, a manager and an employee might agree that response time to customer service requests should be 10% faster to ensure higher customer satisfaction. But instead of simply following an edict from management, the employee understands that achieving this goal is a mark of achievement for them and better for the company.

If a transaction leader can react punitively to negative results, e.g. a lost sales quota leads to lower commissions or reassignment of leads: the transformation leader tries to fix the problem through more direct involvement, e.g. B. Share sales pitches for improvement Understand the challenges the seller faces or provide additional resources and training.

Transformational Leadership Qualities

Transformational leaders have a distinctive set of traits that, at best, complement and combine to create the most effective leadership approach. These features include the following:

• accept the change.Transformational leaders embrace change and anticipate the impact it will have on an organization so they are prepared to meet the challenges.
• understand the emotional willingness to cooperate, empathyemotional intelligenceare key qualities of transformational leaders. In practice, they are self-motivated, resilient, and able to earn the trust and respect of those around them.
• Adaptability.Transformational information technology (IT) leaders have the ability to navigate rapid industry changes and take advantage of complex technology. You'll also see the impact of how these changes will affect other technologies and anticipate problems before they occur.
• Inspirational team player.Transformational leaders focus on the well-being of employees and the organization rather than taking a “me first” approach. When the team is successful, they celebrate as a team and give credit where credit is due.
• Promote participation and communication.Transformational leaders absorb the ideas of everyone around them, without judgment or knee-jerk reactions. You can communicate openly and honestly with employees, which in turn builds trust in the long run.

Find out how Ford and WayfairBuild trust in your employeesusing Slack to enable communication between employees and managers.

Pros and cons of transformational leadership

Encouraging employees to consistently meet and exceed goals is a key leadership effort. Transactional leadership accomplishes this through rewards and punishments, while transformational leadership is more about inspirational motivation.

Benefits of transformational leadership

• These leaders have a less management-heavy approach, where employees have more freedom to experiment and suggest new ideas and approaches.
• Employees are encouraged to focus on what is good for the organization rather than their own interests.
• Other new ideas and approaches come from the people who do the work and deal directly with customers and production issues.
• Employees have a vested interest in the goals of the organization, which leads to greater engagement and engagement in the workplace.
• An effective transformation leader unites the organization in a common cause.

Disadvantages of transformational leadership

• The big inspiring vision of the transformational leader is not always accompanied by detailed instructions on how to get there.
• If the vision is too big or too aggressive, employees can burn out or get discouraged trying to achieve it.
• By definition, a transformational leader brings change to an organization, but in some cases, that change can be too disruptive. Leaders must focus on the benefit of the organization, not on changing for change's sake.
• There is always a risk that some employees may not agree with the vision of the Transformational Leader. That doesn't mean they aren't doing their job, but it could be in a less than optimal way.
• An important part of being a transformational leader is keeping enthusiasm high and connecting with employees. This is best accomplished through ongoing and proactive communication and encouragement, which can take a long time.

Here are three keys for leaders.Measure employee engagement.

Transformational Leadership Training and Certification

There are a number of free and paid transformational leadership training courses, seminars, and certifications that can help you advance in a career. Here is an extract of the training courses available:

• The American Management Association (AMA) offers paid serviceslessonsin transformational leadership for both members - at a discount - and non-members.
• LinkedIn offers aCourseon the topic of transformational leadership for a small fee. It's free for LinkedIn Premium members or for those who want to do a one-month free trial.
• Udemy bietet „Transformational Leadership –Leadership and Training Course”, with five hours of video on demand for a fee.
• Georgetown University offers a paid onecertification programin transformational leadership.
• Coursera's Transformational Leadership for Inclusive Innovation is offered through the University of Toronto. It comes with a seven-day free trial and offerscertification.

Examples of transformational leaders

Many transformational leaders have helped bring revolutionary products and services to the technology marketplace while increasing profits and performance. These are some examples of transformational leaders.

steve jobs

Often described as a genius and visionary, the late Apple co-founder and chief executive officer (CEO) inspired a wave of innovative product development during his two tenures at Apple. In Apple's early years, he inspired and challenged teams to create the most consumer-friendly hardware and software designs. His return to Apple more than a decade later was marked by products like the iPod, iPhone and iPad. He has effectively communicated his vision that the products meet high quality standards and are easy to use for the consumer.

satya nadella

When Satya Nadella became CEO of Microsoft in 2014, he transformed the company. What was once a sluggish tech giant focused on maintaining its industry dominance is a much more agile and open vendor that has responded quickly to make its software available on all platforms, including those of its competitors.

Read this Q&A with Nadella on whyEmpathy is important for technological innovation.

Jeff Bezos

The industry that Jeff Bezos transformed with the founding of Amazon is just a footnote to his great success. Amazon's initial success was as an online bookseller. As the company began selling other products, Amazon quickly became the e-commerce giant it is today. encourage acorporate cultureopenness to innovative approaches has continued to bear fruit. Amazon helped start the cloud computing revolution with Amazon Web Services (AWS), which was originally an on-premises solution for Amazon's computing and storage needs.

Reshma Saujani

The former CEO and founder of the nonprofit organization Girls Who Code led a movement to close the gender gap in technology. In addition to leading the organization, Saujani promoted the basic principles of the organization with hisBook,Girls Who Code: Learn to code and change the world. She also picked up aTED talk, "Teach Girls Courage Not Perfection," has been viewed more than 4 million times.

Elon Musk

A key trait of transformational leadership is developing a vision that an organization can readily understand and embrace. Elon Musk had a vision for electric vehicles that withstood initial struggles and came close to bankruptcy. Today Tesla is one of the most respected companies in the world. His understanding of software also redefined what it means to be a successful automotive company. He's also one of those rare people who disrupt multiple industries, like Musk.spacexis a leader in the commercialization of space travel.

reed hastings

The co-founder and co-CEO of Netflix helped change entertainment forever with his namesake service that established streaming in the industry. The company originally shipped DVDs (digital video disc) for a monthly fee, and later switched to streaming. Under Hastings' leadership, Netflix grew from a delivery service to a major provider of original content. Netflix goes one step further and develops complex viewer consumption algorithms to provide relevant content recommendations. A key element of Hastings' leadership was his belief that the company had to have the right culture. After meeting with employees to learn how they thought the company could run better, he created an internal culture guide. It was later posted publicly online and became a screening tool that helped discourage incompatible people from applying to Netflix.