Introduction
Many organisations seek to develop leadership capability that will enable rapid identification and achievement of strategically important goals, and thus, provide them with a competitive advantage. In this month’s article we will investigate an emerging leadership style referred to as transformational leadership that has proven effective at delivering on this organisational requirement.
After first defining the differences between the traditional transactional style of leadership and the transformational leadership style, we will illustrate the benefits of the transformational leadership style and then demonstrate how it manifests itself organisationally.
Transactional Leadership vs. Transformational Leadership
Historically, leaders have demonstrated leadership by exercising centralised control over their people; by telling them what to do, when and how. This type of leadership style is often referred to as transactional leadership and manifests itself in the form of corrective actions and rewards only when performance expectations are met. Paradoxically, by trying to maintain such rigorous control, circumstances are created that lead the loss of control, and eventually, failure.
Transformational leadership on the other hand is a competing style of leadership that sees leaders trust and empower their people to achieve agreed upon goals in a manner deemed most appropriate by their people.
Transformational leaders enable others to act and design opportunities for others to take charge and to be in control of their own work. However, transformational leaders are careful to make sure that their people have the knowledge, skills and resources to accomplish their responsibilities and they design processes that enable their people to succeed.
The primary factor distinguishing transactional leadership from transformational leadership is how power and control are used. Transactional leaders use their power to control how things get done whereas transformational leaders share their power and control with their people.
It is the ability to share power and control that is responsible for the benefits generated by the transformational leadership style.
Benefits of Transformational Leadership
As transformational leadership is a developmental form of leadership that aims to promote the effectiveness of people, one would logically assume that the benefits of this leadership style relate to improvements in performance and staff morale for both individuals and for the organisation as a whole. Research clearly indicates that these assumptions are true; transformational leadership:
- Increases organisational performance by between 45% and 65%
- Generates significant increases in organisational sales, market share and earnings
- Is positively linked with long term economic growth and customer satisfaction
- Generates greater cohesion and higher commitment by staff
- Increases staff trust in management and the demonstration of discretionary effort
- Enhances staff satisfaction with both their job and with their leaders
- Creates greater alignment around strategic visions and missions
- Contributes substantially to higher levels of product innovation
How Transformational Leadership is Manifested
Transformational leadership is intended to join leaders and their people in a mutual pursuit of strategic goals. There are four key actions that transformational leaders are able to consistently demonstrate:
- Transformational leaders are able to grasp people’s attention and focus them on the important issues in a discussion. This includes building a future vision and successfully engaging followers in it.
- Transformational leaders enable others to act. They do this through using effective communication skills, fostering collaboration, focusing attention and making complex ideas clear by using examples, stories, metaphors and analogies. In short, they empower their people to succeed by making sure expectations are clearly understood and that the required skills, knowledge and resources are available.
- Transformational leaders develop trust and credibility through consistency of action and dependability. They follow through on promises and set examples for their staff. They focus on step by step accomplishments by staff so that large scale goals seem more realistic and achievable through a process of small wins. This style of leadership creates a sense of trust within their team that reduces ambiguity and uncertainty.
- Transformational leaders demonstrate respect and act in a manner that shows genuine care for their people, such as expressing congratulations to individuals for achievement and recognising their contribution. Transformational leaders demonstrate care, even more than respect. Caring means valuing individuals’ special skills and abilities. Caring leaders also make sure that people feel included, a part of the team. Transformational leaders also demonstrate respect for individual differences.
