The true basis of leadership was built upon a model that generated two sides of an X and Y axis. On one side the concept of leadership creates change through taking a process-oriented approach while on the other one it takes more of a relationship-oriented one.
Transactional leadership involves determining the tasks, rewarding goal achievement and punishing failure in attaining goals. Transformational leadership focuses on the critical human assets such as commitment which helps followers to effectively implement organizational changes efficiently and effectively. Just as leaders need to be both autocratic and democratic at times, they are also required to be both transactional and transformational.
A poor leader can ruin even the best plan but a transformational leader can turn a weak business plan into a success. One example of this comes from Harley-Davidson Corporation CEO Rich Teerlink, who dramatically transformed into one which still prospers today.
This success has stood the test of time. Harley-Davidson’s leadership created a more effective organization built upon three primary principles: focusing on people, challenging norms and continuing to fundamentally change. Every employee can participate in leadership decision-making.
Another example of transformational leaders in a highly-competitive environment is Steve Jobs, former CEO of Apple, who built a highly-effective organization through taking a change-oriented leadership approach. This highly manifested itself in talent, product development, organizational structure and intense marketing.
The evidence from these examples suggests that transformational leadership is highly demanding at the corporate level. For organizations to achieve a sustained change and eventually a higher degree of efficiency and effectiveness, selecting a CEO who acts as a transformational leader is the key to success.
In the absence of transformational leadership, organizations lose their required direction to achieve a high degree of competitiveness and cannot implement successful change in order to adapt with today’s global business environment.
Read PEX Network report: Mastering change in hybrid-work models
Our experience says that executives can be made into leaders and they can become better at what they do by using the four aspects of transformational leadership: idealized influence, individualized consideration, intellectual stimulation and inspirational motivation.
Idealized influence
Transformational leaders develop a shared vision and improve relationships with followers.
In doing idealized influence, executives need to take the following actions:
- Instill pride in organizational members for being associated with them.
- Display a sense of power and confidence.
- Go beyond self-interest for the good of the organization.
- Talk about their most important values and beliefs.
- Consider the moral and ethical consequences of decisions.
- Emphasize the importance of having a collective sense of mission.
Related interview: How Amazon drives innovation and belonging in your organization through a focus on compassionate leadership
Individualized consideration
Transformational leaders concentrate on identifying employees’ individual needs and empower followers. This will help build a learning climate and mobilize follower support toward the goals and objectives at the senior organizational level.
In doing individualized consideration, executives need to take the following actions:
- Spend time coaching others.
- Consider employees as having unique needs, abilities and aspirations from others.
- Help organizational members to develop their strengths and provide various formal training programs to improve the performance of duties.
Related article: Drucker’s advice on becoming a pack leader
Intellectual stimulation
Transformational leaders propel knowledge-sharing in the company to generate more innovative ideas and solutions for new and demanding issues that come up constantly in our hyper-competitive economic environment.
In doing intellectual stimulation, executives need to take the following actions:
- Emphasis on the effective coordination among different functional areas and seek differing perspectives when solving problems.
- Suggest new ways of looking at how to complete assignments and undertake a comprehensive analysis when confronted with an important decision.
Inspirational motivation
Transformational leaders focus on inspiring people and not just treating them as human assets, which sets a higher level of desired expectations for them.
In giving inspirational motivation, executives need to take the following actions:
- Talk optimistically about the future.
- Talk enthusiastically about what needs to be accomplished.
- Express confidence that the goals will be achieved.
The key takeaway for executives across the globe is that transformational leadership is more realistic than some of the other leadership models. This leadership model has increasingly become one of the most dominant paradigms today and will be used by many companies around the globe in the next years.
How do you define transformational leadership? Let us know in the comments below.