Transformational Leadership Theory 101

Transformational leadership theory describes a leadership style that focuses on leading organizational change, innovation, and growth.

In today’s world, where business transformation has become the norm, transformational leaders are more relevant than ever.

A truly transformational leader can:

• Create a vision for change
• Motivate and engage the workforce
• Transform resistance to change into enthusiasm
• Help their organization stay relevant and competitive in the modern economy

Business leaders that want to add value in the post-COVID era “next normal” would do well to learn about this leadership approach.

In this post, we’ll cover transformational leadership in detail, compare it to other leadership styles, and learn which ones are most appropriate for their circumstances.

Types of leadership

Transformational leadership is a concept stemming from the Full Range Leadership Model, a model that describes three types of leadership:

Laissez-faire

Laissez-faire leadership falls the lowest on the spectrum of the ability to implement and enable change and offers a great deal of autonomy to subordinates.

Some criticize this approach and claim that laissez-faire leaders deny leadership responsibility.

Others have suggested that this leadership style actually does work well in certain situations, such as flat organizations. These organizations have fewer middle managers and offer more autonomy to small teams. The more self-reliant and independent workers are, the more opportunities there are for innovation and creativity.

On the flip side, however, too much autonomy can result in confusion or even chaos.

In short, laissez-faire leadership can be useful in specific situations, but at a certain point clearer directions are needed from the top.

Transactional

Transactional management and leadership focuses on performance and accountability.

Through mechanisms such as rewards and punishment, transactional leaders are primarily concerned with “getting the job done” effectively and efficiently.

Like laissez-faire leadership, transactional leadership has its place.

Transactional leadership can be useful in situations where transformation is neither desirable nor useful. During crises, emergencies, or in relatively static industries, for example, it can be better to focus on performance than change.

That being said, organizational change is inevitable – and at this point in history, it has become part of economic survival. 

In changing times such as these, it is essential to look at a new leadership style: transformational leadership.

Transformational

Transformational leadership, as mentioned, emphasizes change, innovation, and evolution.

Ideal for companies undergoing change, transformational leaders focus on tasks such as:

• Pinpointing what and how an organization needs to transform
• Developing a vision for transformation
• Creating a strategy and a plan for change
• Organizing and leading change teams
• Keeping workers engaged and maximizing employee productivity
• Executing and managing that plan

There are many examples of transformational leaders in the modern era, from Elon Musk to Steve Jobs to Jeff Bezos – all of these individuals had powerful visions for change. They then made those visions a reality by leading change-forward.

At first glance, it may seem that transformational leadership is “better” than the other leadership styles mentioned above. While it is true that transformational leaders drive change, it is also true that not everyone can or should be a transformational leader.

Striking the right balance between leadership styles

There are a few points to consider when evaluating which leadership style is best for a given work environment.

A few of these include:

The industry. Today, virtually every industry is changing rapidly, including those that have remained static for quite a while, such as agriculture, energy, retail, and manufacturing. This means that nearly every industry needs transformational leadership to at least some extent.

Existing leadership styles. Another point to consider is the climate of the organization and whether or not a vision for change already exists. If the company lacks vision and no one is advocating for change, then this environment could be ripe for a new transformational leader. On the other hand, if there is already a corps of change leaders pushing for transformation, a brand new vision for change would likely result in conflict.

The organization’s mission and strategy. Transformation means change, of course, but changes must be appropriate and help an organization move forward. Transformations that are too drastic or compete with an organization’s existing mission, for example, would likely be unproductive and unwelcome.

The leadership scope. Transformational leaders tend to operate at the highest levels of an organization. Though innovative leaders certainly exist at all levels of a company, the less authority one has, the less power one has and the harder it will be to effect large-scale change. Also, various leadership styles are required at different positions in an organization. Team managers, for instance, should often focus on performance improvements, rather than on transformational change.

Transformational leadership is absolutely necessary in today’s ever-changing world,  but to lead change effectively transformational leaders must be operating in the right environment and they must be supported by the right combination of leadership styles.