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Why Transformational Leadership is Important to Your Organisation

Transformational Leadership – Transforming Business

Transformational leadership is a necessary quality for every business. This leadership style produces leaders who are change agents. Consequently, they can take the company to the next level.

The old ways of bad management no longer work. Staff members now air their grievances over social media and employer review sites. Furthermore, if your employees aren’t happy, they will leave. Because they often leave a bad review, recruitment becomes more difficult. Finding the right people with good leadership skills is, therefore, more important than ever.

Some issues team members may have with their manager are:

  • Showing favouritism.
  • Micromanaging.
  • Bullying them.
  • Not listening to advice.
  • No rewards for good work.
  • Lack of direction.
  • Focus on things which aren’t important.

Some issues may be a communication problem. Sometimes managers become so busy, they forget basic teamwork skills. However, many of them can be attributed to the style of leadership within the business.

There is a strong correlation between employee engagement and transformational leadership. Idealised influence among these leaders can result in higher engagement among employees. When the leader has strong influencing skills, the employees become engaged.  As a result, teams identify with their leaders and listen to their expectations and aspirations.

Read on to learn more about different leadership styles, and how adopting a transformational leadership style can help your business.

Types of Leadership Styles

Sometimes team members have a problem with their manager’s leadership style. A leadership style refers to the way a manager guides, directs and motivates an employee. There are several leadership styles, such as:

Authoritarian Leadership

Authoritarian leaders motivate their staff through rules and regulations. This type of leader does not like advice or want anyone to question their direction. Furthermore, they will punish those that go against them. These leaders are effective in immediate action. They tell people what to do and expect them to do it.

Positives:

  • Enables leaders to share their views with others.
  • Gives close supervision for team members in routine jobs.
  • Provides orders for people who need direction.
  • Ensures all goals are completed.

Negatives:

  • Doesn’t consider advice from others.
  • Prefers ideas not to be questioned.
  • Allows no creativity.

Democratic Leadership

Democratic leaders involve their staff in decisions. They are most effective in situations where the teams achieve tasks on their own. These types of leaders encourage employee feedback. They will ask for input but will still make the final decision.

Positives:

  • Boosts morale of their team.
  • Listens to advice.
  • Makes team members feel valued.
  • The team accepts changes better because they gave advice.

Negatives:

  • Decision-making becomes slow and sometimes goals aren’t met on time.
  • Sometimes people give advice when they have no knowledge.

Laissez-fair Leadership

Laissez-faire leaders allow team members to work on their own. They allow them to work without guidance and support. This style works for those team members who are highly motivated and can work by themselves. However, it may result in lower levels of productivity.

Positives:

  • The leaders delegate the responsibility of decisions to their staff.
  • Allows creativity and flexibility.
  • Most effective with self-motivated staff members.

Negatives:

  • People who need direction don’t do well.
  • This style is not good with team members with no motivation.

Transactional Leadership

The transactional leader was first described by Max Weber in 1947. Bernard Bass further expanded on it in 1981. This is the most common leadership style.  This type of leader will focus on getting the job done. They seek to do this by offering a reward in exchange for completing goals. If a goal is not completed, then punishment is given.

Positives:

  • These leaders set goals and monitor performance.
  • They reward good workers.

Negatives:

  • They punish those who do not do good work.
  • They may not care about the well-being of their team.

Transformational Leadership

The transformational leader focuses on the relationships in the group. They build these relationships to meet business goals. These leaders act as role models and they inspire others to give ideas. They listen to different perspectives. These types of leaders are coaches who work with their staff to develop their skills and abilities to improve performance.

Positives:

  • They expect high performance and lead by example.
  • They are innovative and listen to different ideas.
  • These leaders inspire others to be great at what they do.

Negatives:

  • May overlook small details because they see the bigger picture.
  • Often perceived to show favouritism.

Transformational leadership is the most desired style in managers today. Transactional leadership is one which is most used in companies today. Organisations know if they want to take their companies to the next level, they need leaders that foster growth.

What is the Difference Between Transactional and Transformational Leadership?

These types of leaders are very different. Transactional leaders focus on the organisation. They look at the goals of the business and make plans to meet those goals. Transformational leaders focus on change in the organisation. Ultimately, they are agents of change.

Transformational leadership people want to meet goals, but they take it a step further. They want to seek ideas to improve the business. They don’t want to stay where they are, and look to take the vision and enhance it.

Both types of leadership qualities are important for a business. Transaction leaders are shift leaders who want to make a daily goal or meet customer expectations. They are supervisors who are there to get the job done well.

Transformational leaders are CEO’s or managers who want to take the business to the next level. They may be a supervisor who has great ideas and gives advice to the CEO. They are the type of people that look for the next big thing. Furthermore, they inspire and motivate their staff to do the same.

The History of Transformational Leadership

Leadership expert James McGregor Burns introduced the concept of transformational leadership in his 1978 book ‘Leadership.’ He introduced the concept of transforming leadership in his research on political leaders. Then, he started researching organisational leaders.

According to Burns, transformational leadership is a process in which ‘leaders and followers help each other to advance to a higher level of morale and motivation’.

In 1985, industrial psychologist Bernard Bass expanded Burns’ ideas. He identified and wrote about four other elements of transformational leadership.

He states, ‘Transformational leadership occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.’

Those Elements Are:

    1. Idealised Influence – The teams believe the leader ‘walks the talk’ and is highly respected. This leader would never ask their team to do something which they wouldn’t do. They inspire their team through their actions. They gain trust and respect. The staff members want to be like their leader and feel pride in their work.
    2. Inspirational Motivation – These leaders inspire and motivate their staff. They instil confidence in their staff and have great communication skills. They inspire and motivate their staff about the direction of the team and the business.
    3. Intellectual Stimulation – This is when they listen to the concerns of their team members. They believe in giving attention to the employee and gathering their input. This leader will help the employee see the positive side of things and calm any fears.
    4. Individualised Consideration – The leader challenges followers to be innovative and creative. They want to get input and get “out of the box” ideas from their staff. This leader will listen to each employee individually to get their ideas. They also want to help the employee succeed and develop different training opportunities along with the employee.

Implementing a Transformational Leadership Style

A transformational leader wants to gain the trust of his or her team. They want every person on their team to feel pride in their work. Every person, no matter what their role, should know that what they do is important. It is important to walk the talk. Show your team how important their job is to the organisation. They should know your vision and the vision of the business. Consequently, they should want to deliver the results of the vision.

Qualities of Transformational Leaders:

      • They seek input.  These types of leaders want to learn what they don’t know. They seek input from their staff and co-workers.  Furthermore, these leaders love to learn new systems, processes, techniques, and anything which empowers them to do better.
      • They are innovative and creative. They encourage creativity to get solutions to problems. Transformational leaders love new ideas. Furthermore, they will research solutions from people and sources. These leaders inspire others and they value input and feedback.
      • They are influencers. People listen to what they say. These leaders often talk about the big picture and garner involvement. They want people to be inspired by their work.
      • They build trust. Trust is reinforced by these managers who do what they say they will do. They follow the commitments they make.
      • They have a good rapport with their co-workers and leaders. These leaders know what needs to be done and they do it. They don’t have an ego and want everyone to win.
      • They have emotional intelligence and are aware of, and know how to, control their emotions. These leaders can adapt to change.
      • Become an influencer, a motivator, listen to others fears and calm them, and let your team be creative. Be the leader who believes in your people.

To become this type of leader it is important that you truly understand the qualities of transformational leadership. Is it possible to change your leadership style?

Become an Idealised Influencer

This leader inspires others to be great and they are motivational. You should inspire your team to come up with new ideas and help them to achieve success. Are you trying to beat sales from last year? Are you looking for new product innovations? What can drive your team to be better than who they were before? Challenge your team to have higher levels of performance.

Become an Inspirational Motivator

Introduce positivity within the team. Show concern for feelings of your team and build relationships.  Give your team members one-on-one time to make sure they can give input freely.

A transformational leader acts like a coach and mentor. You should listen to your team’s feedback and address all concerns. Don’t get angry when they give you new ideas or express negativity. Show empathy when they have problems and be supportive when they need you.

Become an Intellectual Stimulator

Push the limit for taking risks and ask for ideas from the team members. They should know that no idea is bad. Make brainstorming fun and ask your team to do research. Is your business developing a new marketing campaign?

Encourage team members to find new ideas. What could they develop to take the business or the department to the next level? What do they need so they can get results?

Give individualised consideration to every team member.

Examples of Transformational Leadership

According to Forbes magazine, transformational leaders are constantly asking questions. For example, what can we do differently? What do we want? And, what do you want? They don’t take the first answer. In short, they inspire greatness.

For example, think about Reed Hastings, CEO of Netflix. He founded Netflix in 1997 and knew he needed to take his company from a DVD rental to where it is today. He hired people to take the business to that level. Moreover, he empowered his team to make decisions. Now Netflix produces original content. Consequently, they have become a huge subscription service and so much more than they were.

Another example of a transformational leader is Jeff Bezos, CEO of Amazon. Amazon began as a discount bookseller.  Then, Amazon started selling other products. They started selling their own products like the Kindle and Echo devices. Amazon didn’t stay with the status quo and to just be a bookseller. They wanted to sell other things and they wanted to sell their own product. Furthermore, they even invited others to sell alongside them.

Key Challenges

Some challenges transformational leaders may have are:

      • Other leaders may not see the need for changes.
      • Some employees can’t be inspired.
      • Implementing the changes may be difficult.
      • Making the changes stick.

It is important for the leader to have meetings with their staff regularly. They should let them know the status of each step. If a staff member cannot get on board, the leader may need to have some tough discussions with them. It is also important that other leaders of the business understand the purpose. Once the change has occurred, it is important to give frequent reminders about why the change was needed. This ensures no one goes back or quits working on the project.

Final Thoughts

It is important that transformational leaders don’t just help develop their team, but also themselves. They should also work on their own weaknesses and learn new ideas.

Transformational leadership is great at creating the vision and inspiring others to help generate the ideas. Then, they pass it down to the transactional leaders to make sure the job is completed by all the workers. All leadership styles have their positives and negatives.

Try to find out what type of leadership style is important on all levels of the company when hiring. Each type of style may be needed for different types of groups or jobs. When hiring, check your employee’s needs to find a style which will help them succeed.

Lastly, you should make sure you have transformational leadership in your organisation. These leaders can take your business to the next level.  They can take a small bookstore into becoming a large retailer. They have big aspirations, so it is important to hire these visionaries and great leaders.


For further tips and information, you can take a look at our Ultimate Guide to Leadership Skills and our Leadership Skills YouTube Channel. Also, check out our award-winning blog to see more Leadership Skills Tips and articles.

Dan Silverman

About Dan Silverman

Dan is an experienced career development professional and leadership coach. His strengths lie in defining goals and assessing capabilities to implement strategic business plans and build key relationships. He has a solid background in developing HR strategic plans, policies, and creating programmes designed to attract and retain highly motivated and productive employees.

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