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Expert Contributors:
Valentin Radu
CEO & Founder, Blogger, Speaker, Podcaster, Omniconvert
Companies are up against a formidable trend: employees are no longer trusting, enthusiastic, or confident in their leaders.
Gallup’s global indicators of leadership and management show that only 23% of workers trust their leaders, 32% are confident in their company’s financial future, and only 19% are enthusiastic about it.
The pressing need to change this finds a path forward in transformational leadership. This style emphasizes building trust and authentic connections in the workplace and engages employees while encouraging their growth.
However, is this enough to transform the current perceptions of organizational leadership?
Below, we explore all aspects of this incredibly nuanced style to see where it fits in this narrative, starting with the core question: what is transformational leadership?
What is Transformational Leadership?
Leadership literature most commonly describes transformational leadership as a management philosophy in which leaders build trust among employees, encourage them, value and support their innovative ideas, and foster their development. They focus on inspiration and collaboration to drive long-term organizational growth.
However, these characteristics barely scratch the surface of transformational leadership, a concept that has been gaining momentum for the past few decades.
The Transformational Leadership Theory
The transformational leadership theory, established by James MacGregor Burns (1978) and later expanded by Bernard M. Bass (1985), serves as a theoretical framework that highlights the dynamic relationship between leaders and followers.
- Burns defined transformational leadership as a process where leaders and followers elevate each other’s motivation and morality
- Bass emphasized that such leaders inspire followers to exceed their expectations for the collective good and introduced ways to measure the success of transformational leadership
Since then, this framework has been widely used in corporate settings, albeit with some necessary changes over the years. However, its main goal to encourage, inspire, and pave the way for company growth remains to this day.
In fact, research indicates strong connections between transformational leadership and positive organizational outcomes, from increased employee commitment to job satisfaction and trust, all of which contribute to a robust organizational culture.
The Transformational Leadership Style
The transformational leadership style inspires and motivates, leads by example, and pushes followers to exceed their own expectations.
It’s rooted in the ability to bring about meaningful change beyond goal setting by reshaping how the individual perceives their role and contribution to the collective.
Transformational leaders don’t micromanage. Instead, they mentor and act as role models.
In the workplace, these are the team leaders who host brainstorming sessions for everyone to share their ideas and explore their creativity, or the managers who show enthusiasm for new projects. It’s the employers who celebrate the achievements of their employees and invest in their growth.
This leadership style can inspire positive change, and it’s particularly effective in dynamic and changing environments, as it promotes adaptability and engagement.
However, transformational leadership requires a specific combination of personal characteristics and skills for it to be effective.
Transformational Leadership Characteristics
The key characteristics that define transformational leaders are:
- Empathy
- Self-awareness
- Emotional intelligence
- High moral standards
- High ethical standards
- Clear values and priorities
- Authenticity
- Drive for continuous growth
However, they should also possess the right combination of skills, including:
- Active listening
- Articulate communication
- Problem-solving
- Adaptability
- Creativity
- Open-mindedness
Substantial evidence has emerged over the years that women tend to perform better in areas related to innate leadership traits.
For example, statistics on women in leadership reveal that female managers are more supportive of their teams, more motivated by a sense of purpose, and want their company to positively impact employees and the community – all fundamental transformational leadership characteristics.
They were also more likely to possess emotional intelligence, self-control, awareness, and moral orientation.
As for the skills, these can be developed through practice and experience.
In the workplace, targeted programs by executive coaching companies can help leaders build them. For example, executive leadership coaching can push for better motivation and the ability to inspire, while executive communication coaching helps leaders articulate their vision clearly and foster open dialogue.
These programs can ensure that leaders are well-equipped to follow and execute the core components of transformational leadership.
Core Components of Transformational Leadership
The transformational leadership theory, specifically its expansion by Bass, introduces the four I’s as core components of this style. These elements further explain the concept and give guidance on how to be successful as a leader.
The four I’s of transformational leadership are intellectual stimulation (IS), individualized consideration (IC), inspirational motivation (IM), and idealized influence (IF).
Intellectual Stimulation
IS: Promoting continuous development and growth
A transformational leader stimulates employees intellectually, encouraging continuous learning and development, innovation, creativity, critical thinking, etc.
In return, this pushes employees to problem-solve better, offer their perspectives, challenge their beliefs and values (personal and those of the company), and voice their concerns when necessary.
Individualized Consideration
IC: Attending to the individual
Individualized consideration is an approach that emphasizes recognizing and addressing the unique needs of each team member. This effort to accommodate employees and provide personalized support makes them feel heard and valued.
Empathy as a leadership characteristic is central to this core component. It allows leaders to listen to their employees and attend to their needs, ultimately helping them reach their personal and organizational goals.
Inspirational Motivation
IM: Articulating a vision and inspiring performance beyond expectations
Transformational leadership is anchored in inspirational motivation. This element is responsible for setting a “vision,” which leaders communicate and encourage their teams to work towards.
Instead of using fear or punishment, as seen in other leadership styles, this one creates a strong sense of purpose. As a result, employees are motivated to perform beyond expectations, even when the standards are set much higher.
Idealized Influence
II: Leading by example
Idealized influence builds trust that helps leaders use inspirational motivation to drive action toward their vision.
It represents leaders acting as role models and leading by example.
Those with this trait demonstrate authenticity, high ethical standards, integrity, and confidence, earning their followers’ trust, admiration, and respect.
Transactional vs Transformational Leadership
When defining transformational leadership, James MacGregor Burnes emphasized its difference from transactional leadership.
Burnes states, “Transactional leaders are leaders who exchange tangible rewards for the work and loyalty of followers.”
In essence, transactional is the exact opposite of transformational.
It uses rewards and punishments instead of inspirational motivation, supervises instead of attending to the individual, and isn’t focused on intellectual stimulation but rather on keeping things consistent and predictable.
Moreover, while one demands routine (transactional), the other is flexible (transformational).
In a work setting, the transactional vs. transformational leadership debate favors the former when stability and clear structure are needed to achieve specific goals and the latter when fostering innovation and employee engagement is essential for long-term growth.
Transformational Leadership Examples
Reed Hastings (Netflix), Stebe Jobs and Tim Cook (Apple), and Satya Nadela (Microsoft) are often associated with major corporate transformations.
While Hastings’s vision of future streaming, Nadella’s “insider-outsider” perspective, or Jobs and Cook’s innovation can be good examples of transformational leadership, they fail to represent the diverse landscape.
A study on the perception of transactional and transformational leaders found that 72.4% of men and 82.9% of women exhibited transformational leadership styles. However, when participants were asked to name a successful leader, most cited male figures, revealing a persistent perception bias.
Despite the unquestionably high achievements of examples like Hastings or Jobs, transformational leaders come in all forms, and recognizing this broader spectrum is essential for fostering inclusive leadership in the future.
Benefits of Transformational Leadership
The benefits of transformational leadership are well-documented in both academic research and real-world applications.
“Prioritizing a shared mission fosters a culture of continual growth and development, heightening employee satisfaction.
This environment drives individuals to exceed their limits, collectively propelling the company toward sustainable success,” explains Valentin Radu, CEO and Founder of Omniconvert.
“In my experience, focusing on a common vision invigorates teams, leading to a profound transformation within the organizational culture.”
In support of this, evidence-based studies exploring its effectiveness show that transformational leadership improves performance outcomes, organizational citizenship behaviors, employee engagement, trust in managers, and psychological empowerment.
It also positively affected motivation, creativity, satisfaction, commitment, and overall well-being.
Another study on its impact on work performance, burnout, and social loafing shows a clear, positive correlation between transformational leadership and both intrinsic motivation and work performance.
Although there wasn’t a significant relationship with the other two components, the study suggests leaders should develop transformational attributes to inspire employees, boost their self-confidence over specific jobs, and empower their decision-making abilities.
“Prioritizing a shared mission fosters a culture of continual growth and development, heightening employee satisfaction”
Transformational Leadership in Practice
Finally, revisiting our starting point, the question remains: Can transformational leadership increase employees’ lack of trust, confidence, and enthusiasm in the workplace?
In practice, while its framework aims to inspire and engage employees, not every leader effectively implements the principles we discussed. When leaders fail to embody transformational leadership characteristics, this could explain Gallup’s global indicators of leadership and management.
Conversely, a good leader, someone who genuinely adopts the framework, could improve engagement and overall job satisfaction.
In conclusion, the impact of transformational leadership largely depends on how faithfully leaders apply these practices and their genuine desire to improve an organization.
Written by Tamara Jovanovska
Content Writer at Shortlister
Sources
- Gallup, Indicators: Leadership & Management
- Transforming Leadership, By James MacGregor Burns
- Leadership And Performance Beyond Expectations, By Bernard M. Bass
- Transformational Leadership: The Impact on Organizational and Personal Outcomes
- Transformational vs. Transactional Leadership Theories: Evidence in Literature
- Perceptions of Transactional and Transformational Leaders According to Gender
- Transformational Leadership Effectiveness: An Evidence-Based Primer
- Impact Of Transformational Leadership on Work Performance, Burnout and Social Loafing: A Mediation Model
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