What Is Transformational Leadership?

Whether you’re coming from the perspective of an employer, an employee, or a student, you’re probably familiar with the concept of “leadership styles.” For example, strategic leadership strongly emphasizes future trends and developments, while tactical leadership is more concerned with problem-solving and the efficiency of daily operations.

One style of leadership that has been experiencing a popularity boom in recent years is known as transformational leadership, a concept that was first developed during the 1970s. Research shows that, when implemented successfully, transformational leadership can positively impact both companies and individual employees by boosting employee engagement and satisfaction while motivating workers to surpass performance expectations.

But what is transformational leadership, and what are the hallmarks or characteristics that set it apart from other leadership styles? What traits do transformational leaders need to possess to be effective? And how can leveraging transformational leadership benefit businesses, government agencies, or other organizations? We’ll answer all those questions in this article, starting with a closer look at the four core components that go into successful transformational leadership.

What Are the Four Components of Transformational Leadership?

The origins of transformational leadership in the U.S. can be traced back to 1973 when sociologist James V. Downton first introduced the phrase. Leadership expert James Burns, who was awarded the Pulitzer Prize for his biography of Franklin D. Roosevelt, later built on Downton’s framework, which researcher Bernard M. Bass again expanded during the mid-1980s.

As the concept has been developed over time, four equally critical components of transformational leadership have emerged. These components or elements can be considered “the four I’s”: intellectual stimulation, individual consideration, inspirational motivation, and idealized influence.

So, what do each of these elements involve, and why are they so integral to the concept of transformational leadership? First, let’s take a closer look at each component and how it is implemented.

1. Intellectual Stimulation

An effective transformational leader can stimulate their team members intellectually. They motivate employees to want to learn and develop new skills and promote an environment where team members feel free to apply creative solutions, offer contrasting perspectives, or voice their concerns. They also understand the importance of continually learning and are never afraid to challenge their own assumptions or look at new solutions to old problems.

2. Individual Consideration

Transformational leaders are excellent listeners with high levels of empathy. They consider the individual needs, concerns, and motivating factors that drive every team member and tailor their approach accordingly. By showing consideration for, and making efforts to accommodate, different individuals on their team, transformational leaders excel at making employees feel heard and valued.

3. Inspirational Motivation

Transformational leaders are adept at communicating the mission or vision underpinning an organization. Their enthusiasm makes employees feel like their work is essential and drives them toward a greater goal, fostering a sense of motivation that unites every team and department. In short, they inspire their followers to challenge themselves and achieve more, which has the benefit of producing a more confident and autonomous workforce.

4. Idealized Influence

Successful transformational leadership requires setting challenging yet achievable expectations for your team and yourself. According to the work management platform Asana, “Leading by example can increase trust and team engagement,” — cautioning that, on the other hand, “If what you’re doing and saying is inconsistent, that inconsistency can lead to frustration and lack of trust.”

What Are the Essential Traits of Transformational Leaders?

In the previous section, we explored some defining characteristics of transformational leadership, such as leading by example (idealized influence) and inspiring followers to exceed expectations (inspirational motivation). So how can leaders embody and exemplify these characteristics, and what other traits should a transformational leader possess? From adaptability and creativity to humility and open-mindedness, here are 11 examples of the skills and attributes necessary for effective transformational leadership.

• Self-aware: Transformational leaders need the ability to assess their own strengths and weaknesses. They should be firm believers in continued personal growth and lifelong learning.
• Open-minded: Being open-minded is essential for transformational leaders, who must listen and empathize with their followers while building creative and innovative solutions to problems.
• Ethical: Part of transformational leadership is leading by example, which means setting and adhering to high moral and ethical standards is crucial.
• Adaptable: Transformation can’t occur without the willingness to experiment and grow, making adaptability and flexibility key traits to possess.
• Proactive: Transformational leaders aren’t passive or reactive — they take their own initiative and work to stay ahead of the curve, inspiring their followers to do the same.
• Creative: Creative, unconventional thinking is fundamental to disrupting an industry or transforming a team or organization.
• Humble: Transformational leaders need the ability to accept and implement feedback without letting their ego get in the way. They also need the ability to acknowledge others for their hard work and contributions to the mission.
• Active Listener: Active listening is characterized by being attentive, displaying empathy, and asking open-ended questions that show engagement and striving for clear communication. Learn tips for becoming a better active listener.
• Risk-taking: To bring meaningful change to an organization, sometimes a transformational leader needs to take calculated risks, make choices, or taking actions outside the scope of their direct knowledge or experience.
• Accountable: Holding team members accountable for their actions isn’t enough. Transformational leaders must hold themselves to equally high standards, which is another way of leading by example or idealized influence.
• Encouraging: Transformational leaders should excel at encouraging their team members and must understand how their followers are motivated by different strategies and factors.

What Are the Benefits of Transformational Leadership?

Implementing transformational leadership strategies can empower organizations in various ways, producing multiple beneficial effects that all contribute to long-term financial growth and success. From boosting employee engagement while decreasing costly employee turnover to enhancing performance and making organizations more competitive, here are five benefits of transformational leadership for businesses, school districts, hospitals, and other organizations.

1. More engaged employees. Research shows that workers report higher satisfaction with managers or leaders with transformational leadership training than those without.
2. Improved financial outcomes. Research has also shown that transformational leadership can “have significant effects on… [various] aspects of branch-level financial performance.”
3. Better employee performance. Ample data show that engaged workers who report high job satisfaction also perform more effectively in their roles, translating to higher revenue for organizations and greater well-being for individuals.
4. Stronger team relationships. Transformational leadership highly emphasizes empathy and teamwork, contributing to an inclusive environment where team members feel free to express their opinions and take on tough challenges. This fortifies professional relationships within teams (such as a committee or department) and among individuals and their leaders or managers.
5. Lower employee turnover. Losing employees is costly for businesses, and much of that churn can be pinned to factors like low job satisfaction. Employees who feel motivated, valued, and engaged perform tasks more successfully and are less likely to leave an organization.

Pros and Cons of Transformational Leadership

Every leadership style boasts unique strengths but also has limitations that organizations must carefully evaluate. Transformational leadership is no exception to this rule and comes with pros and cons depending on your needs and priorities.

Although not exhaustive, the following at-a-glance lists of pros and cons will help you understand where transformational leadership excels — and some situations where another approach might be better. Then, read on to learn about the benefits and drawbacks of a transformational leadership style, from its effects on communication and transparency to its impact on morale and motivation.

Pros of Transformational Leadership

Transformational leadership is gaining popularity for a reason — or, more accurately, at least seven different reasons. Here are some of the most significant advantages of a transformational leadership style:

• Improves motivation
• Defines goals and expectations clearly
• Places a strong emphasis on professional development
• Promotes better communication and increased transparency
• Boosts morale
• Provides more freedom for employees
• Unites the team

Cons of Transformational Leadership

While frequently beneficial to organizations, transformational leadership has its limitations. Here are a few potential cons or drawbacks of transformational leadership in the wrong setting:

• Complicates decision-making
• Creates a heightened need for communication
• Burnout may become more frequent
• It can be risky and disruptive to the organization or team, especially in the early stages of its development
• The role can be abused and lead the team down the wrong path
• A leader can lose power over the team

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NU offers graduate and undergraduate programs in leadership to meet you at any stage of your professional development journey. Take the first steps by pursuing your Bachelor of Science in Organizational Leadership (BSOL), or build on your foundation and enhance your qualifications by furthering your education with a Master of Science in Organizational Leadership (MSOL). You can even earn your MSOL degree online, providing flexibility and control over your schedule.

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