What Is Transformational Leadership?

posted September 4th, 2018 by SEU Online

Two fish bowls with a fish jumping from one to the other

There are several types of leadership styles that business managers and executives may use. Add to that list six traits of a good leader, and there are plenty of characteristics that leaders should be comfortable with and exhibit at any given time. The best leaders are capable of modeling all of them.

Some concepts in leadership, such as transformational leadership, are worthy of deeper analysis. Like servant leadership, transformational leadership is something that business leaders should strive to grow in throughout their lives.

Defining Transformational Leadership

Transformational leadership is a management style that involves identifying a needed change, creating a vision to help inspire the team to follow through on it and guiding them to execute the plan. Though transformational leadership takes place on multiple levels of a process, micromanaging is not part of the style.

According to CIO Magazine, leaders set an example at the corporate level by strengthening culture, employee ownership and independence in the workplace. Employees are given more room to be creative, look ahead to the future and find new solutions to old problems. As a result, employees are motivated to innovate and create change, which is the primary goal of transformational leadership.

Transformational Leadership Characteristics

It’s easy to label an organization as “transformational.” They seem to be everywhere, according to Harvard Business Review. “But when you look more deeply into whether those organizations are truly redefining what they are and what they do, stories of successful change efforts are exceptionally rare.”

A study of S&P 500 and Global 500 organizations revealed what characteristics were shared among CEOs of firms that are deemed transformational.

  • The Tendency of Being “Insider Outsiders:” Several companies were headed by founders with no prior experience in their industries, such as Jeff Bezons from the world of finance. This “outsiders” perspective gave them an advantage when it came time to reinvent the predetermined way of doing things. Yet, these transformational leaders weren’t new. They were still “insiders,” with an average 14 years of tenure before getting the CEO position. Being able to approach leadership as an insider and an outsider paid dividends in terms of perspective.
  • They Pursue Two Separate Journeys: Transforming a business doesn’t happen in one direction or as one process. It requires retooling the core business while actively investing in the new growth business. That’s how Apple became the success it is today; Steve Jobs injected the core franchise with fresh design and a new way of thinking how computers could be used online. He then launched the devices and ecosystem to fulfill the vision, which began with the iPod and iTunes.
  • They Used Culture to Drive Engagement: At Microsoft, large teams used to work for years on the next version of Windows and Word, which led to a risk-averse environment. Since Satya Nadella came on as CEO, risk-taking and exploration has been the norm. Harvard Business Review noted that “Nadella was unlike his predecessors, in that he built his reputation as a hands-on engineer, not as a visionary … his idea of how to engage and motivate employees wasn’t by making a speech but rather by leading a company-wide hackathon, and empowering employees to work on projects they were passionate about.”
  • They Communicate Powerful Narratives About the Future: Aetna’s Mark Bertolli said that the CEO needs to be “the storyteller in chief” in order to change culture and move into new growth areas. The transformation narrative is central to helping employees buy into the plan for change. A 2016 article in Entrepreneur said that the vision story is one that every leader needs to tell. Even other story structures — numbers stories that contextualize data and bridge stories that cite past successes of proof the vision is attainable — are inseparable from the primary, overarching narrative of change for the future.
  • They Develop a Road Map Before Disruption Ensues: Transformations take time, and transformational leaders anticipate and plan for disruption before it happens. Netflix made the leap from being a successful DVD-mailing service to a streaming service. Netflix’s change in vision separates the company from others that were unable to forecast disruption from early warning signs — companies like Blockbuster, Borders, Blackberry and Kodak.

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