Leadership is a function that every manager must play in the workplace. Managers frequently assume that because they are managers, they are also leaders and that their employees (associates) will automatically follow them. In actuality, position merely refers to a person's title, not their ability to lead. According to Northouse (2001), leadership is a process in which one person affects a group of people to reach a common purpose. To be an effective leader, a manager must have a good influence on their subordinates to achieve the organization's objectives. Managers can become great leaders by using a transformational leadership approach.
To apply this strategy in the workplace, one must first grasp the definition of transformational leadership. In its most basic form, transformational leadership is a process that alters and transforms people. Transformational leadership is the ability to motivate people to want to grow, change, and be led. It entails determining colleagues' motivations, meeting their needs, and valuing them (Northouse 2001). As a result, a transformational leader may help the firm succeed by appreciating its employees.
"Transformational leadership" is a leadership style that affects individuals and social systems. It promotes valuable and good change in followers in its ideal form, with the eventual goal of growing followers into leaders. Transformational leadership improves followers' motivation, morale, and performance through various techniques. These include connecting a follower's sense of self to the organization's mission and collective identity. In addition, it includes inspiring followers by being a role model, challenging followers to take greater ownership of their work, and understanding followers' strengths and weaknesses so the leader can match them to tasks that maximize their performance.
Four Elements of Transformational Leadership
Idealized influence, inspiring motivation, intellectual stimulation, and individual concern are the four elements of transformational leadership (sometimes known as the "four I's"). Each component will be discussed to assist managers in implementing this strategy in the workplace.
1. Idealized Influence
Managers who are exceptional role models for associates are described as having idealized influence. Associates may trust and respect managers with idealized influence to make effective decisions for the company.
2. Inspirational Motivation
Managers who inspire associates to commit to the organization's vision are known as inspirational motivators. Managers who are inspired motivate their teams to achieve the organization's goals of increasing revenue and market growth.
3. Intellectual stimulation
Managers who stimulate invention and creativity by challenging a group's usual assumptions or viewpoints are known as intellectual stimulators. Intellectually stimulating managers encourage critical thinking and problem-solving to improve the company.
4. Individual consideration
Managers who act as instructors and counselors to their associates are known as individual considerations. Individualized management encourages associates to achieve goals that benefit both the associates and the organization.
Each of the four components describes important qualities in the "transformation" process. Managers that are good role models, encouragers, innovators, and coaches use the "four I's" to assist their employees in "transforming" into better, more productive, and successful people. According to Northouse, those who demonstrated transformational leadership were more effective leaders with higher work outcomes in 39 studies of transformational literature. This was true for both governmental and commercial sector high- and low-level leaders. As a result, using the transformational approach in the workplace can be quite beneficial for managers.
Performances that exceed organizational expectations are the product of effective, transformative leadership.
Related: Emotional Intelligence Leader
Transformational vs. Transactional leadership
Leaders often describe themselves as either transformational or transactional. The two terms have been used interchangeably in the past, but they are not synonymous. Transactional leaders focus on results, while transformational leaders focus on processes. Both types of leaders are necessary in any organization. However, transformational leaders tend to be more effective than transactional leaders because they foster an environment where people feel valued and respected. They also create an atmosphere that allows others to grow and develop.
The difference between transformational and transactional leadership lies in how each type of leader views his/her job. A transactional leader focuses on achieving specific objectives, such as meeting financial targets. He/she is concerned about the short term and tends to be task-oriented. In contrast, a transformational leader focuses on the long term and is concerned with developing individuals and building relationships. He/she is interested in creating change within the organization.
Transformational leaders are usually charismatic, inspiring, visionary, and motivating. Their goal is to help subordinates become self-directed, independent thinkers. They believe that all people possess the ability to perform at a high level if given the opportunity. These leaders are committed to helping others reach their full potential and are willing to take risks to accomplish this. They are able to communicate effectively with their subordinates and provide them with constructive feedback.
A transformational leader will always strive to do what is right for the organization. If he/she believes that a particular action would be detrimental to the company, s/he will not hesitate to speak up. Transformational leaders are open to new ideas and innovative ways of doing things. They encourage everyone to participate in decision-making and give credit when it is due.
A transformational leader will make sure that everyone knows what is expected of him/her. S/he will set clear goals and standards for performance. S/he will hold himself/herself accountable by setting deadlines for the completion of assignments. Transformational leaders will listen carefully to the needs of their subordinates. They will respond quickly to problems and concerns.
A transformational manager will treat every person fairly and equally. S/he will avoid favoritism and discrimination. She/he will never belittle anyone.
Advantages and Disadvantages of the transformational leadership approach
Strengths and flaws emerge with any idea or approach to leadership. Northouse (2001) outlines the following strengths and disadvantages of transformational leadership:
Strengths are that it is well-studied (using well-known leadership tactics) and significantly impacts colleagues at all levels (from one-on-one to the entire organization).
Weaknesses are that leadership may have too many components, focusing on the surface rather than determining suitable depths of involvement, and treating leadership as a personality feature rather than a learned practice; they may abuse power.
Application of the transformative leadership approach
There are no exact steps for a manager because transformational leadership encompasses a variety of leadership qualities. It is an iterative process. Therefore, it is necessary to adopt a transformational style consciously. Understanding the fundamentals of transformational leadership and the four I's can assist a manager in implementing this strategy. A transformational leader should possess the following characteristics:
- encourages employees to accomplish what is best for the company
- is an excellent role model who upholds high standards
- listens to different points of view to foster a cooperative spirit
- establishes a vision with the help of the organization's employees
- acts as a change agent within the company by demonstrating how to initiate and implement change.
- aids the organization by assisting others in contributing to it
Examples of Transformational Leaders
1. Sam Walton, Walmart
Sam Walton, the founder of Wal-Mart, was a successful transformational leader who frequently visited Wal-Mart stores across the country to speak with colleagues and express his gratitude for what they had done for the firm. In his book, Walton outlined "guidelines for success," one of which was complimenting associates.
2. Jeff Bezos, Amazon
Bezos' "insider, outsider" identity, according to Harvard Business Review, is part of what makes him a brilliant transformational leader. Through years of experience in a different field, he gave a unique viewpoint on e-commerce as someone who leaped from the banking world.
3. Reed Hastings, Netflix
Hastings and Bezos tied for first place for similar reasons. He came from the software sector, therefore, he wasn't used to the television industry's pre-established process and procedure.
4. JeffBoyd and Glenn Fogel, Priceline
Boyd and Fogel redefined travel reservations by charging lower commission fees on reservations while focusing on smaller specialty markets (inns, B&Bs, and apartments), eventually resulting in the birth of Booking.com.
5. Steve Jobs and Tim Cook, Apple
Apple is an example of "dual transformation," according to HBR: Jobs innovated on original Microsoft goods while also creating a software ecosystem. Cook has achieved Jobs' goal, focusing on innovation, software, and customer loyalty.
6. Mark Bertolini, Aetna
Bertolini is well-known in the healthcare profession for his pragmatic managerial style. His purpose, he says, is to develop tactics based on a realistic view of the future.
7. Kent Thiry, DaVita
According to Harvard Business Review, Thiry was able to turn a failing company into a successful one by emphasizing "service quality, teamwork, accountability, and enjoyment" as firm core values.
8. Satya Nadella, Microsoft
Nadella joined Microsoft in 1992 and rose through the ranks, eventually leading the company's cloud computing activities and earning the CEO post.
9. Emmanuel Faber, Danone
Faber began his career at Danone as an architect before being promoted to CEO after assisting in developing the firm's mission to transform into a sustainable health and nutrition company.
10. Heinrich Hiesinger, ThyssenKrupp
Hiesinger took over as CEO of ThyssenKrupp in 2011 and used modern types of manufacturing, such as 3D printing, to help alleviate pressure from Asian competitors in the steel industry. These "new development sectors" now account for 47 percent of the company's revenues.
11. Gregg Stienhafel, Target
Target's CEO, Gregg Stienhafel, inherited a significant retailer with declining annual sales. Amazon was in charge of its online web presence in 2004 when the previous CEO was in charge. After taking control, Stienhafel noticed the writing on the wall and, in 2011, resurrected Target's digital presence to build a new web design that purposefully blurred the borders between eCommerce and physical shops. Four hundred outlets were instantly outfitted with cutting-edge equipment and curbside pickup for internet orders. They went from having a stogy, old-school social media presence to engaging with followers and consumers regularly. As of October 2020, the stock had risen from a low of $53 in 2006 to over $164.
12. Nelson Mandela, Former President of South Africa, Anti-Apartheid Revolutionary
Nelson Mandela would become one of the world's most famous transformational leaders. During his time as South Africa's leader, Mandela successfully exploited the country's love of sports in the 1995 Rugby World Cup to promote reconciliation efforts, instilling a sense of nationalistic pride in the country's people. Through this event, he promoted all citizens' rights, which was vital in raising public awareness of equality.
13. John D. Rockefeller, Standard Oil
John D. Rockefeller created Standard Oil in 1870. This small oil corporation evolved into a global behemoth, controlling over 93 percent of all oil in the United States at one point. Rockefeller gave his businesses a unifying vision. He concentrated on producing high-quality products and driving his employees toward a common vision and goal, holding everyone, including himself, accountable for seeing that they were met.
14. Richard Branson, Virgin
Richard Branson's Virgin empire is built on his management philosophy, which states that for a business to succeed in the long run, executives must appropriately encourage employees. He believes that if leaders can motivate their teams, the employees will use their creativity to overcome obstacles and strengthen their bonds. His transformative leadership style ensures that happy employees perform better as a group and company. In his leadership, he has learned to take risks and, most importantly, to treat all personnel with respect.
15. Jonathan Becher, SAP
SAP's Chief Digital Officer, Jonathan Becher, soon understood that business culture was an issue in his domain. Becher saw a need for the company to take a more hands-on approach to its future rather than relying on outside experts for guidance. Becher also saw that the corporation needed to accept that failure would occur and to view it as a tool for learning rather than a negative aspect of the business. It took some time, but SAP made the necessary adjustments to use internal SMEs after providing them with the resources they needed to develop, adapt, and improve their skills.
16. William Edwards Deming, Quality Control Statistics
William Edwards Deming, the founder of quality control statistics, worked as a consultant for the US government and relocated to Japan shortly after WWII to assist with agricultural output and associated issues. His teachings on quality control and efficiencies required several years to make their way back to the United States (the 1980s), where they took root. He recognized that his methods for increasing production while reducing waste could harm Japan's other industries, particularly manufacturing. In five years, his ambition was to assist Japan in becoming a global industrial giant. In just four years, Japan became a global force.
17. Henry Ford, Ford Motors
Ford was able to solidify his status as one of the all-time great transformative leaders by operating on the business theory that "doing more for the world than the world does for you" is a definition of success. Ford transformed the world in ways that even he could not have predicted by creating and commercializing the vehicle, a process he envisioned while watching a moving assembly line at a meat-packing facility.
18. Bill Gates, Microsoft
Bill Gates changed the world with his Windows operating system and the integration of software – such as the Microsoft Office suite – with personal computers. However, it wasn't always like this; Gates had to fight the US government over anti-trust issues in the beginning, and the company's software is now a cornerstone of more efficient corporate procedures and expanding opportunities. Although he is no longer at the helm of Microsoft, the firm continues to make great progress, particularly in cloud computing. But his vision and intelligence helped Microsoft — and, in some cases, the entire world – become what it is today.
19. Ross Perot, Electric Data Systems
Ross Perot made his first imprint in the public and private sectors in 1962 when he founded Electric Data Systems (EDS), a computer system maintenance company. Using his expertise in hardware obtained from his career as an IBM salesperson, Perot put a lot of faith in his employees, giving them enough authority to make good decisions that satisfied his clients — a groundbreaking strategy at the time. Perot sold EDS to General Motors for $2.6 million in 1984 after demonstrating that a top-down business strategy may be insufficient in a technological market.
20. Billy Beane, Major League Baseball
Billy Beane, the executive vice president of the Oakland Athletics baseball team, is unquestionably a pioneer in changing long-held assumptions about structures and processes. Billy Beane, Major League Baseball: They applied advanced analytics techniques to the recruitment; 'Moneyball.' Beane's techniques are credited with transforming mindsets in the professional sports sector and revolutionizing the application of data analytics, and could also be useful in the business world. Beane and his team could find possible acquisitions that had been missed or underrated by their competition.
Other Types of Leadership
1. Laissez faire leadership
2. Democratic Leadership
3. Strategic Leadership
4. Coach-Style Leadership
5. Bureaucratic Leadership
Because leaders' performance influences the organization's ultimate success, transformational leadership is a critical function for competent managers. According to Hesselbein and Cohen (1999, p. 263), organizations that take the time to teach leadership are far ahead of the competition. Managers can engage as effective leaders in the business environment by becoming familiar with the transformational leadership strategy and combining the four I's.
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