Transformational leadership allows you to initiate change in your team and drive innovation. Here is how to achieve it and how to avoid being a transactional leader.
In recent times, organisations have had to grapple with significant change. Over the last two decades, globalisation has influenced leaders to maximise profit by rethinking where goods are manufactured and components are sourced. The pandemic forced us to reconsider the definition of work and pushed teams toward output rather than attendance as a measure of success.
Emerging technology is also shifting the way organisations operate. A management journal article published earlier this month states that to adapt and thrive in increasingly complex environments ‘the need for visionary leadership capable of inspiring teams toward shared goals has become imperative.’
The businesses that have been able to thrive throughout these transformations have been able to pivot from institutional thinking and implement and accept change. Similarly, the leaders who have been able to guide successful transformations to keep up with these societal changes, have also shown they are open to change.
Further, a growing body of research illustrates that the structured nature of transactional leadership is not effective in facilitating change. Transformational leadership – a less traditional approach that seeks to inspire employees rather than coerce them – is highly valued as companies innovate to remain relevant.
Transactional Leadership
The American Journal of Biomedical Science and Research published an article in 2021 exploring the ability of leaders to transform organisations when faced with circumstances outside their control.
“Transactional leaders focus on assigning specific tasks to their employees and using the reward and punishment system to motivate employees towards achieving their individual and organisational goals,” the authors of the paper state. The focus on “order and stability does not allow flexibility among employees.”
Hewlett-Packard (HP) is an example of an organisation that has historically used transactional reward and punishment systems to motivate employees. In today’s fast-evolving world, however, that approach is out of touch.
“There is constant assessment to ensure employees are rewarded when they succeed or punished when they fail. Transactional leadership focuses on short-term goals. Employees should follow the rules and procedures – which may hamper innovation,” the research reveals.
Instead, leaders are encouraged to apply a different philosophy.
“To shift to transformational leadership, managers at HP should lead change in the company.”
According to the research, three things are required to achieve this – creating the right environment for change, setting long-term goals, and inspiring employees with a broad vision.
“The first thing to change is to shift from administering for stability to administering for change. The second thing to change is the focus on long-term goals. Managers should lay a long-term vision for employees to achieve. The third thing to change is to avoid focusing on details. This means that managers at HP should set goals for a broader vision that looks beyond the present and focuses on several years into the company’s future.”
Transformational Leadership
This style of leadership was first proposed in 1973, gaining in popularity in recent years. A 2004 study of Transformational Leadership and Evidence-Based Management looked at how to create work environments for nurses that maximise patient safety.
It found that transforming a hospital environment requires leadership capable of change in both the physical environment, and in beliefs and practices. Specifically, the study concluded that the following five things were necessary:
- Balancing the tension between production efficiency and reliability (safety);
- Creating and sustaining trust throughout the organization;
- Actively managing the process of change;
- Involving workers in decision-making pertaining to work design and work-flow;
- Using knowledge management practices to establish the organization as a “learning organization.”
On an individual level, academic researcher Bernard Bass defined four traits that transformational leaders need to embody to be effective:
Idealised influence These leaders are admired, respected, and trusted. Followers identify with and want to emulate their leaders. Among the things the leader does to earn credit with followers is to consider followers’ needs over his or her own needs. The leader shares risks with followers and is consistent in conduct with underlying ethics, principles, and values.
Inspirational motivation Leaders behave in ways that motivate those around them by providing meaning and challenge to
their followers’ work. Individual and team spirit is aroused. Enthusiasm and optimism are displayed. The leader encourages followers to envision attractive future states, which they can ultimately envision for themselves.
Intellectual stimulation Leaders stimulate their followers’ effort to be innovative and creative by questioning assumptions, reframing problems, and approaching old situations in new ways. There is no ridicule or public criticism of individual members’ mistakes. New ideas and creative solutions to problems are solicited from followers, who are included in the process of addressing
problems and finding solutions.
Individualised consideration Leaders pay attention to each individual’s need for achievement and growth by acting as a coach
or mentor. Followers are developed to successively higher levels of potential. New learning opportunities are created along with a supportive climate in which to grow. Individual differences in terms of needs and desires are recognised.
Servant Leadership
This style of leadership takes transformational leadership a step further, and is not as widely accepted. Servant leadership was coined in 1977 by Robert Greenleaf, a US business executive and researcher. It is a leadership philosophy that aims to create effective, caring leaders with strong character.
Researchers from Monash University have also weighed in on the concept, highlighting that the term ‘servant as leader’ can be seen as an oxymoron.
“It may be difficult to think and act as a servant and leader at the same time – a leader that serves and a servant that leads,” Monash management researchers Sen Sendjaya and James C Sarros wrote in 2002. They conclude that the purpose of servant leadership is to “serve others to be what what they are capable of becoming.”
In 2000, Larry Spears expanded on Greenleaf’s academic work and identified 10 key components of servant leadership.
Listening
Leaders have traditionally been valued for their communication and decision-making skills. Listening, coupled with periods of reflection, is essential to the growth and well-being of the servant leader.
Empathy
The servant leader strives to understand and empathise with others. One assumes the good
intentions of co-workers and colleagues. The most successful servant leaders are those who have become skilled empathetic listeners.
Healing
The healing of relationships is a powerful force for transformation and integration. One of the great strengths of servant leadership is the potential for healing one’s self and one’s relationship to others.
Awareness
General awareness, and especially self-awareness, strengthens the servant-leader.
Awareness helps one in understanding issues involving ethics, power, and values. It lends
itself to being able to view most situations from a more integrated, holistic position.
Persuasion Another characteristic of servant leaders is reliance on persuasion, rather than on
one’s positional authority, in making decisions within an organisation. The servant leader
seeks to convince others, rather than coerce compliance.
Conceptualisation The traditional leader is consumed by the need to achieve short-term operational goals. A leader must stretch his or her thinking to encompass broader-based conceptual thinking.
Foresight
A characteristic that enables the leader to understand the lessons from the past, the realities of the present, and the likely consequence of a decision for the future. It is also deeply rooted within the intuitive mind.
Stewardship
Servant leadership, like stewardship, assumes first and foremost a commitment to
serving the needs of others. It also emphasizes the use of openness and persuasion, rather
than control.
Commitment to the Growth of People
Servant leaders believe that people have an intrinsic value beyond their tangible contributions as workers. As such, the servant leader is committed to the growth of each individual within his or her organization.
Building Community
The servant leader seeks to identify some means for building community among those who work within a given institution. Servant leadership suggests that true community can be created among those who work in businesses and other institutions.
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