The concept and leadership definition were first introduced by a leadership expert and presidential biographer, James MacGregor Burns. Here is one of leadership quotes of Mr. Burns: “Transformational leadership is when leaders and followers force each other to move to a higher level of morality and motivation.” Insight and charisma are those leadership qualities that make it possible for transformational leaders to inspire followers to change their expectations, perceptions, and even motivation in order to move towards common goals.
Later, one of the researchers, Bernard M. Bass, expanded the original idea of the transformational leadership of James Burns, and developing the concept we call today Bass’ “Transformational Leadership Theory.” What is leadership according to Mr. Bass? A transformational leader can be defined by the influence he can exert on those following him. Transformational leaders, according to Bass, evoke trust, respect, and admiration from their followers. Bass also suggested that there are three key components for effective leadership:
- Intellectual stimulation. Transformational leadership suggests that leaders not only challenge the current situation, they also seek to stimulate, encourage the creative approach to the work of those they lead.
- Inspiring motivation must necessarily be among the leadership competencies of the transformation leader. They clearly understand how to articulate plans and tasks for employees. Such a leader can also help others get enough motivation to perform these very tasks.
- Idealized influence. A transformational leader must be a role model for his followers. When those who follow leader respect and trust this person, they begin to imitate this person, to some extent adopt his way of thinking, his ideas, and values.
Now let's consider the main advantages and disadvantages of transformational leadership.
Key benefits of transformational leadership
- Transformational leadership is a leadership style that attracts everyone. Transformational leaders, thanks to their charisma and authority, will be able to achieve a very high level of productivity and maximum efficiency of subordinates since they satisfy the requirements of personal motives. Transformational leadership, like no other style, recognizes the needs and requirements of staff. So it is possible to achieve maximum motivation and followers are working on a righteous deed according to their opinion.
- The turnover rate is very low with transformational leadership. Charisma is among the main leadership skills necessary for the successful application of this approach. Transformational leaders, as a rule, can keep their staff and clients well. When using transformational leadership, special attention is paid to meeting the needs of the organization, its individual members and customers. Here, every member of the team knows that he has a special role and it help to keep team’s morale high.
- Transformational leadership encourages self-learning and self-development. It should be noted that among the tasks of a transformational leader is not only achieving the goals of the organization (although this is, of course, the main task) but also working to improve the efficiency and productivity of the whole team and all its members. A transformational leader always encourages his subordinates to learn and develop themselves. Stimulating self-development and self-improvement of subordinates form a positive culture in the team; this allows achieving high productivity (with constant growth), high loyalty, and involvement in all processes of the company.
- Way out for a team in a depressed state. Any company in some periods of its existence experiences a decline. Trade wars, economic crises and other negative phenomena in the market can lead a business into a very bad state, and this will be reflected in the work of the team in any case. It is very important not to indulge in depression at such a moment and work efficiently as never before. In this situation, the role of the transformational leader is extremely important. His charisma and dedication motivate others to work for the result no matter what.
- Positive changes. Any development implies a change in the usual way of life. Neither the head of the company nor his staff should be afraid of these changes and discourage them. Transformational leadership in every way encourages positive changes, develops any initiatives aimed at achieving the desired result, so this leadership style is perfect for rapid development, way out of decline, reorganization of the company, and in other cases where positive changes are needed.
The disadvantages of transformational leadership
Despite all its advantages, transformational leadership has several drawbacks. Thus, the transformational leadership style in some cases may even have a negative impact on the creativity of the subject regarding both individual and group work.
- Often, transformational leadership, being extremely useful and effective in the context of innovation at the same level, brings significant damage to activities at a higher level. In fact, often completely sincere initiatives leading to innovative changes at the lowest level turn out to be completely useless and even harmful at higher levels.
- Transformational leadership may turn out to be completely ineffective when the focus on innovation is replaced by the exploitation of already known goods and technologies for the sake of commercial advantage or the interests of investors and managers of higher rank.
- The effectiveness of transformational leadership is based on proper communication. It is thanks to constant and open communication the transformational leader receives feedback from his employees. Problems with management begin when such communication does not take place when subordinates lose interest in their work or trust in their supervisor. In this case, there will be no effective transformational leadership.
- Full consent and submission. A charismatic, transformational leader can charge his employees with a positive, motivate them and increase efficiency. But, in practice, there are situations when the leader is not fully trusted, his vision and evaluations may be questioned, if any of the followers disagree with the leader in the vision of work and the result, they will greatly reduce overall efficiency. It is even possible that employees will rebel against the leader if they feel that they are being led in the wrong direction.
Thus, despite the widespread ideas about the positive impact of transformational leadership on the innovativeness of an organization, in some cases, it can also have a depressing effect on the initiative and creativity of its employees.
Some examples of transformational leadership
Peter Ferdinand Drucker was a famous management theorist and professor at the University of New York. Among other things, he predicted the rapid development of Japan after the end of the Second World War, as well as the growing role of marketing in the global economy. He is the author of the term “knowledge worker.”
According to Drucker, the balance between meeting short-term needs and long-term plans for future is the core of success. Drucker worked on combining innovation and business.
He understood that entrepreneurship is a means of innovation; that business needs innovation for competitive advantage, while scientists and inventors need funds for further research that business can provide. Business was constantly looking for new methods and technologies for development and used opportunities when they introduced themselves.
The famous American entrepreneur John Davison Rockefeller lived and worked in the second half of the 19th century and the first half of the 20th century. He founded Standard Oil, the only oil refinery at that time, which has grown to a huge company. Even though most of the company's growth was due to acquisitions, John Davison Rockefeller spent a lot of time optimizing his organization.
One of the reasons for his success was that Rockefeller, being a very charismatic leader, could get his company to work entirely to achieve his vision. Thus, he used one of the main advantages of transformational leadership – purposeful work of staff on achieving a certain goal.
Why transformational leadership?
Transformational leadership, like any other management method, has its advantages and disadvantages, but there are situations when its use is preferably and provide you the desired result. For example, an organization with an outdated structure and approach to doing business, or a company in a recession, or a company aimed at a cardinal change of activity, all of them need transformational leadership to achieve their goals.