Transactional vs Transformational Leadership: Part 2 – Transformational Leadership

Make a positive impact on your employees!

11 mins read

This article is written to provide the reader with an understanding of what a Transformational Leader is.

When asked about leadership styles, employees tend to want a leader who treats them with respect, values their contributions, celebrates their wins and provides constructive feedback when mistakes happen. Experience has shown that managers lose respect from their team and are often seen as dictators when they practice strict authority and lead by fear to achieve results.

Today many leaders are learning to be adaptable and champion growth and development in their teams since the modern business work environment is always evolving.

Take a step back and ask yourself, what does it take to be a great leader? This answer is going to be different for everyone, so it is important to not judge yourself. For most, it takes more than just a job title or the role they play within the company; a great leader can manage through transformational leadership to achieve results.

Transformational Leadership is defined as someone who inspires and motivates their team to create positive changes within an organization. This leadership style can increase group morale, lead to rapid innovation, improve conflict resolution, decrease turnover and foster a sense of ownership amongst the team.

Transformational leadership was first introduced by James V. Downton (1973), which has been expanded on by various leadership experts like James Burn (1978) and Bernard M. Bass (1985), who explained how this leadership style can be measured and how the psychological mechanisms can affect the workforce’s performance in a positive fashion.

Leaders who harness this leadership style can have a positive impact on their employee’s well-being because they are leading with an inspired vision, by motivating their team and focusing on the bigger picture. This type of leadership style is different from the traditional transactional leadership style, which focuses on daily tasks and keeping the operation running as is.

“If you want something new, you have to stop doing something old.” – Peter Drucker

It is okay to be a transactional leader, however, to be an effective leader, a manager should have the ability to balance transactional activities with transformational activities as both are important to a leadership role.

Transformational leaders identify needed change by creating and supporting a vision which inspires and guides their team when executing change. These leaders are accountable for their actions and how they treat their employees, taking their employee’s emotions, feelings, and perspectives into consideration before acting. Leaders like this want to inspire motivation, morale, and job performance which includes connecting with employees to provide support where needed.

They lead by example to boost and motivate their employees to achieve results by demonstrating four behaviours commonly known as the “Four I’s,” which are Inspirational motivation, Idealized influence, Intellectual stimulation, and Individualized consideration.

“Good leadership consists of showing average people how to do the work of superior people.” – John D. Rockefeller

Inspirational motivation This trait is when the leader inspires their employees to achieve results. They set reasonable and attainable goals for their staff to achieve. They share their vision for their team and inspire them to be committed to achieving these goals. An inspirational leader will motivate their employees by effectively articulating their expectations clearly.

“A bad system will beat a good person every time” – Edwards Deming

Idealized influence This trait is when the leader acts as a strong role model for their employees, leading by example. These leaders are considerate and ensure that their employee’s needs are given the attention that they deserve generally being charismatic and conducting business in a very ethical manner. It is important to remember that the behaviours/traits the employees see in a leader are generally the behaviours/traits they will emulate.

Intellectual stimulation This trait is when the leader will challenge their employees and encourage them to think for themselves and to be more creative and innovative. These leaders are more tolerant when their employees make a mistake as they believe this will promote growth and improvement within their team, they challenge the status quo. When it comes to intellectual stimulation, these leaders will generally create opportunities for their employees to learn.

“Punishing honest mistakes stifles creativity. I want people moving and shaking the earth and they are going to make mistakes.” – Ross Perot

Individualized consideration This trait is when the leader understands the value of building and maintaining strong relationships with their employees. They genuinely care for their employee’s well-being and offer support and resources for them to grow and develop in their personal and professional life. Employees who have worked with a transformational leader had a higher reported level of well-being.

Transformational leaders go beyond their call of duty, which is one trait that transactional leaders fail at. A common perception is that a transformational leader is “soft”, however, these leaders are actually challenging their employees to achieve a higher level of performance.

In addition to these behavioural traits, there has been studies done on the personality characteristics of a transformational leader. Forbes senior contributor, Blake Morgan outlines five traits which these leaders possess, such as being:

Self-Aware the leader knows their strengths and weaknesses thriving on personal growth and development. They are not afraid to reflect on themselves and believe that everyone (including themselves) should continually learn and improve on themselves.

Open-Minded the leader is open to fresh ideas and different perspectives or opinions. They regularly welcome feedback and are resourceful when gathering information before making decisions, rather than jumping to conclusions.

Adaptable and Innovative as leaders, they understand that business dynamics are always evolving, and they keep an eye on innovative ways to stay ahead. These leaders are not afraid to take risks that alter the company’s traditional approach as they look toward the future.

Proactive the leader does not wait around to be told what to do or for change to happen, instead they make proactive decisions and bold choices that set the tone for others to follow. To put it lightly, they are leaders not followers.

Humble the leader has no issue with admitting they are wrong or do not have all the answers. Throughout their concerns, they will remain confident in themselves, their goals and abilities. A humble leader is also capable of keeping their egos in check and will ethically do what is right for their team and organization.

Transformational leaders are a perfect match for businesses that are ready for change and are willing to adapt to get there, however, these businesses must have structure in place. Individuals who are hired to be transformational leaders may fail at executing any changes if there is no structure or are leading in a bureaucratic work environment. To effectively demonstrate this type of leadership style, the individual must be:

    • Well-organized and have a team who is creative and committed to executing change
    • Team-oriented and will have their team committed to working together to achieve results
    • Respected by others and gives respect back
    • Motivated to achieve goals and mentor their staff
    • Accountable for themselves and their team, as well as being able to inspire that same accountability and responsibility in their team

These leaders have excellent communication skills to bring forward new ideas and are great at balancing short-term goals and long-term vision. Transformational leaders are attracted to building strong relationships and establishing mutual trust and respect.

Through the strength of their vision and personality, these leaders inspire their employees to change expectations, perceptions, and motivations to work as a team towards common goals. Transformational leaders are inspiring because they go beyond their own interests and are considerate of others, acting with integrity as they strive to make the correct and moral choices to achieve the businesses success.

To find out more about Transactional vs Transformational leadership style, please see part 3 of this series where we compare the two styles.

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