Transformational Leadership In A Nutshell

Transformational leadership is a style of leadership that motivates, encourages, and inspires employees to contribute to company growth. Leadership expert James McGregor Burns first described the concept of transformational leadership in a 1978 book entitled Leadership. Although Burns’ research was focused on political leaders, the term is also applicable for businesses and organizational psychology.

Understanding transformational leadership

Burns noted that transformational leadership was a process in which “leaders and followers help each other to advance to a higher level of morale and motivation”. 

He also noted that transformational leaders:

  • Create significant change in employees, organizations, and communities.
  • Challenge expectations and aspirations.
  • Lead by example.
  • Articulate a vision that is likely to inspire or energize. 

In the years since the original study, researchers such as Bernard M. Bass have contributed to developing the concept further. This research culminated in the creation of four elements of transformational leadership which will be discussed in the next section.

The four elements of transformational leadership

  1. Intellectual stimulation. Transformational leaders enjoy challenging the status quo and encourage creativity in employees. 
  2. Individualized consideration. The transformational leader is also empathic. They offer support and encouragement to followers who demonstrate an ability to think independently. They keep lines of communication open and encouraging a two-way flow of information and ideas.
  3. Inspirational motivation. These leaders can also articulate visions that are both appealing and inspiring to those under them. Visions are realized through the establishment of high standards and cautious optimism. Most importantly, transformational leaders are great motivators because they instill a sense of purpose and meaning into every action they take. Among other things, this increases employee well-being.
  4. Idealized influence. Transformational leaders are perfect role models. They back up their visions with action and embody the qualities they espouse. This builds trust and respect among their followers.

Examples of transformational leaders

In a study of Fortune 500 companies in America, Harvard Business Review found that many were led by transformational leaders sharing common traits and strategies.

Here are some of the more notable examples:

  • Heinrich Hiesinger, ThyssenKrupp. In 2011, Hiesinger was appointed CEO of a steel manufacturing giant experiencing intense pressure from Asian competitors. In response, he shifted the core focus of the business to high-tech componentry and industrial solutions with an emphasis on clean energy.
  • Jeff Bezos, Amazon. Bezos was noted as someone who brought fresh perspectives and a focus on employee involvement to the e-commerce model from his years of experience in the finance industry.
  • Reed Hastings, Netflix. Hastings has a similar story to Bezos in that he spent many years in the software industry. As a result, he was able to challenge the status quo of the television industry to develop the now hugely successful subscription model.

Key takeaways

  • Transformational leadership is a leadership style that motivates and inspires others through the setting of challenging goals and the embodying of certain values.
  • Transformational leadership has four key elements: intellectual stimulation, individualized consideration, inspirational motivation, and idealized influence.
  • Transformational leadership is a style that many of America’s largest 500 companies have adopted. Examples include Netflix, Amazon, and ThyssenKrupp.

Key Highlights

  • Definition and Origin: Transformational leadership is a leadership style that focuses on motivating and inspiring employees to contribute to the growth of a company or organization. The concept was introduced by leadership expert James McGregor Burns in his 1978 book “Leadership,” originally centered on political leaders but applicable to businesses and organizational psychology.
  • Core Principles of Transformational Leadership:
    • Creating Change: Transformational leaders facilitate significant change in individuals, organizations, and communities.
    • Challenging Expectations: They challenge the status quo and set high expectations for themselves and their followers.
    • Leading by Example: Transformational leaders lead through their own actions and behaviors, serving as role models for their teams.
    • Articulating Inspiring Vision: They communicate a compelling vision that motivates and energizes others.
  • Elements of Transformational Leadership:
    • Intellectual Stimulation: Transformational leaders encourage creativity, innovation, and critical thinking by challenging existing norms.
    • Individualized Consideration: They show empathy and support for individual employees, fostering independent thinking and open communication.
    • Inspirational Motivation: These leaders inspire and motivate by setting high standards, expressing optimism, and connecting actions to a meaningful purpose.
    • Idealized Influence: Transformational leaders serve as exemplary role models, earning trust and respect by aligning their actions with their values and vision.
  • Examples of Transformational Leaders:
    • Heinrich Hiesinger (ThyssenKrupp): Hiesinger shifted a traditional steel manufacturing company’s focus to high-tech solutions and clean energy, adapting to market challenges.
    • Jeff Bezos (Amazon): Bezos brought innovative perspectives and employee involvement from his finance background to revolutionize e-commerce.
    • Reed Hastings (Netflix): Hastings challenged the television industry norms and successfully introduced the subscription-based streaming model, reshaping the entertainment landscape.
  • Impact on Organizations: Many Fortune 500 companies have adopted transformational leadership strategies to achieve success. These strategies help foster innovation, employee engagement, and a sense of purpose, driving both individual and organizational growth.
  • Key Takeaways:
    • Transformational leadership involves inspiring and motivating through challenging goals and embodying core values.
    • The four key elements of transformational leadership are intellectual stimulation, individualized consideration, inspirational motivation, and idealized influence.
    • Prominent examples of transformational leaders include figures like Jeff Bezos, Reed Hastings, and Heinrich Hiesinger.

Connected Leadership Concepts And Frameworks

Leadership Styles

Leadership styles encompass the behavioral qualities of a leader. These qualities are commonly used to direct, motivate, or manage groups of people. Some of the most recognized leadership styles include Autocratic, Democratic, or Laissez-Faire leadership styles.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Adaptive Leadership

Adaptive leadership is a model used by leaders to help individuals adapt to complex or rapidly changing environments. Adaptive leadership is defined by three core components (precious or expendable, experimentation and smart risks, disciplined assessment). Growth occurs when an organization discards ineffective ways of operating. Then, active leaders implement new initiatives and monitor their impact.

Blue Ocean Leadership

Authors and strategy experts Chan Kim and Renée Mauborgne developed the idea of blue ocean leadership. In the same way that Kim and Mauborgne’s blue ocean strategy enables companies to create uncontested market space, blue ocean leadership allows companies to benefit from unrealized employee talent and potential.

Delegative Leadership

Developed by business consultants Kenneth Blanchard and Paul Hersey in the 1960s, delegative leadership is a leadership style where authority figures empower subordinates to exercise autonomy. For this reason, it is also called laissez-faire leadership. In some cases, this type of leadership can lead to increases in work quality and decision-making. In a few other cases, this type of leadership needs to be balanced out to prevent a lack of direction and cohesiveness of the team.

Distributed Leadership

Distributed leadership is based on the premise that leadership responsibilities and accountability are shared by those with the relevant skills or expertise so that the shared responsibility and accountability of multiple individuals within a workplace, bulds up as a fluid and emergent property (not controlled or held by one individual). Distributed leadership is based on eight hallmarks, or principles: shared responsibility, shared power, synergy, leadership capacity, organizational learning, equitable and ethical climate, democratic and investigative culture, and macro-community engagement.

Ethical Leadership

Ethical leaders adhere to certain values and beliefs irrespective of whether they are in the home or office. In essence, ethical leaders are motivated and guided by the inherent dignity and rights of other people.

Transformational Leadership

Transformational leadership is a style of leadership that motivates, encourages, and inspires employees to contribute to company growth. Leadership expert James McGregor Burns first described the concept of transformational leadership in a 1978 book entitled Leadership. Although Burns’ research was focused on political leaders, the term is also applicable for businesses and organizational psychology.

Leading by Example

Those who lead by example let their actions (and not their words) exemplify acceptable forms of behavior or conduct. In a manager-subordinate context, the intention of leading by example is for employees to emulate this behavior or conduct themselves.

Leader vs. Boss

A leader is someone within an organization who possesses the ability to influence and lead others by example. Leaders inspire, support, and encourage those beneath them and work continuously to achieve objectives. A boss is someone within an organization who gives direct orders to subordinates, tends to be autocratic, and prefers to be in control at all times.

Situational Leadership

Situational leadership is based on situational leadership theory. Developed by authors Paul Hersey and Kenneth Blanchard in the late 1960s, the theory’s fundamental belief is that there is no single leadership style that is best for every situation. Situational leadership is based on the belief that no single leadership style is best. In other words, the best style depends on the situation at hand.

Succession Planning

Succession planning is a process that involves the identification and development of future leaders across all levels within a company. In essence, succession planning is a way for businesses to prepare for the future. The process ensures that when a key employee decides to leave, the company has someone else in the pipeline to fill their position.

Fiedler’s Contingency Model

Fielder’s contingency model argues no style of leadership is superior to the rest evaluated against three measures of situational control, including leader-member relations, task structure, and leader power level. In Fiedler’s contingency model, task-oriented leaders perform best in highly favorable and unfavorable circumstances. Relationship-oriented leaders perform best in situations that are moderately favorable but can improve their position by using superior interpersonal skills.

Management vs. Leadership


Cultural Models

In the context of an organization, cultural models are frameworks that define, shape, and influence corporate culture. Cultural models also provide some structure to a corporate culture that tends to be fluid and vulnerable to change. Once upon a time, most businesses utilized a hierarchical culture where various levels of management oversaw subordinates below them. Today, however, there exists a greater diversity in models as leaders realize the top-down approach is outdated in many industries and that success can be found elsewhere.

Action-Centered Leadership

Action-centered leadership defines leadership in the context of three interlocking areas of responsibility and concern. This framework is used by leaders in the management of teams, groups, and organizations. Developed in the 1960s and first published in 1973, action-centered leadership was revolutionary for its time because it believed leaders could learn the skills they needed to manage others effectively. Adair believed that effective leadership was exemplified by three overlapping circles (responsibilities): achieve the task, build and maintain the team, and develop the individual.

High-Performance Coaching

High-performance coaches work with individuals in personal and professional contexts to enable them to reach their full potential. While these sorts of coaches are commonly associated with sports, it should be noted that the act of coaching is a specific type of behavior that is also useful in business and leadership. 

Forms of Power

When most people are asked to define power, they think about the power a leader possesses as a function of their responsibility for subordinates. Others may think that power comes from the title or position this individual holds. 

Tipping Point Leadership

Tipping Point Leadership is a low-cost means of achieving a strategic shift in an organization by focusing on extremes. Here, the extremes may refer to small groups of people, acts, and activities that exert a disproportionate influence over business performance.

Vroom-Yetton Decision Model

The Vroom-Yetton decision model is a decision-making process based on situational leadership. According to this model, there are five decision-making styles guides group-based decision-making according to the situation at hand and the level of involvement of subordinates: Autocratic Type 1 (AI), Autocratic Type 2 (AII), Consultative Type 1 (CI), Consultative Type 2 (CII), Group-based Type 2 (GII).

Likert’s Management Systems

Likert’s management systems were developed by American social psychologist Rensis Likert. Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. Likert proposed four systems of management, which can also be thought of as leadership styles: Exploitative authoritative, Benevolent authoritative, Consultative, Participative.

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