Many organizations are adopting transformational leadership strategies to keep up with new technology, hybrid work, and other challenges in the modern workforce — but what is transformational leadership, really?
Transformational leadership differs from other leadership styles, putting more emphasis on empathy, individuality, and open communication. It aims to motivate employees using more than just their paycheck and incentives to create lasting change in the workplace. That said, the best practices vary by workplace.
Discover the key qualities and characteristics of transformational leadership to become a leadership expert.
Transformational leadership is a distinct leadership style that uses common goals, open communication, and personal connections to motivate and inspire employees. The key advantages of transformational leadership include:
- Improved performance: Employees are driven to complete their work to the best of their abilities while catching their mistakes, meeting deadlines, and boosting organizational effectiveness.
- Open communication: Employees feel comfortable raising questions, concerns, and creative ideas.
- Better well-being: Employees feel more connected to their work and their accomplishments, contributing to their job satisfaction and retention.
- Unity: Leaders recognize their employees’ needs, motivations, and skills, even if they never meet them in person, such as when leading hybrid teams.
These types of leaders understand their employees’ needs and key motivations — they also understand the little ways their own behaviors influence their employees. As such, transformational leaders must play an active part in the transformation they’re creating, such as by empathizing with colleagues and adopting new processes before anyone else. Many transformational leaders practice servant leadership, in which the leader is more focused on serving their employees than vice versa.
A transformational approach is especially critical when embracing the latest technology and tools for digital transformation (DT). Most workforces must adapt to new digital solutions, such as artificial intelligence (AI), with much of the work falling to employees. Transformational leadership inspires employees to keep up with these changes by sharing how they will help the company grow and how these new skills and processes will benefit their careers.
Transformational leadership differs on various levels from transactional leadership, which focuses more on performances with direct rewards and consequences. Transactional leadership styles are usually more structured and hierarchal, and most employees are motivated by paychecks, incentives, and deadlines more than anything else. It takes the job back to its most basic premise, doing work to get paid, rather than connecting with and motivating employees on a deeper level.
Transactional leaders delegate tasks, deadlines, and incentives, such as bonuses or rewards. They then act predominantly as supervisors by responding to setbacks and maintaining rigorous checks and balances. It’s typically up to the employees to motivate themselves to complete their short-term and long-term tasks. Transactional organizational cultures may benefit many types of workplaces, such as jobs based on gigs, sales, or incentives. Unfortunately, they can also limit employees’ innovation, sense of purpose, and connection to the company.
Transformational leaders, on the other hand, motivate employees on more personal levels by establishing common goals, open communication, and inspiring work atmospheres. Rather than working for the next paycheck or a specific incentive, employees are motivated by the direct and indirect impacts their work will have on the company and their career development. A transformative leadership style is particularly beneficial for employee retention and internal growth.
Leaders can often combine elements of both transactional and transformational leadership styles, such as by creating incentives and reward systems but not solely relying on them for motivation. Similarly, managers can acknowledge employees’ contributions on both personal and monetary levels, especially during employee reviews. A hybrid of transactional and transformative leadership styles may be essential when operating in fast-paced workforces or in jobs with high burnout rates.
The key characteristics of transformational leadership include:
- Intellectual stimulation: Leaders should invite employees to share their ideas and challenge them to continue learning and expanding their skills. Employees should feel comfortable asking questions, raising concerns, working with others, and getting creative when addressing problems.
- Inspirational motivation: Transformational leaders motivate employees by unifying them on shared goals, visions, and senses of purpose. Colleagues understand the role that each of them contributes to the team’s and company’s success, motivating them on a level that transactional leadership can’t achieve.
- Idealized influence: From adopting new software to addressing sensitive topics, leading by example sets the expectations for the entire workplace. Beyond that, leaders who work hard, show integrity, and hold true to their values can inspire employees on personal levels.
- Individualized consideration: Transformational leaders must be able to listen to and empathize with employees, whether they’re struggling to complete a project or get along with coworkers. They should maintain an atmosphere of open communication by recognizing and acknowledging each person’s unique contributions, skills, and needs.
Transformational leadership in the workplace takes many forms, but many of the key qualities and goals are the same. Explore the top transformational leadership qualities below.
Self-awareness
Leaders should have dependable emotional intelligence skills and understand their personal feelings, motivations, strengths, and weaknesses. In doing so, they should be able to respond to intense situations with composure and integrity without losing focus on the company’s mission and goals. You can boost your self-awareness as a leader by asking for feedback, reflecting on your interactions with employees, and learning more about emotional intelligence.
Open-mindedness
Another key characteristic of transformational leadership is being open to new ideas, concerns, and criticism. An open-minded approach helps create an atmosphere where employees feel safe, comfortable, and seen. This can help foster creativity and better interpersonal communication.
Group meetings are a great place to practice open-mindedness as a team and bond with coworkers online. Make sure everyone has a chance to speak during group conversations and brainstorming, and give each person the individual consideration they deserve.
Adaptability and innovation
Transformational leaders must be able to adapt quickly to change, especially if they want their employees to follow suit. This is especially important amid digital transformations and new workforce structures, whether you have to start using AI or lead a distributed team.
Unfortunately, obstacles and changes can get quite unpredictable. Embracing change whenever you see an opportunity can help you adapt faster to future obstacles and setbacks whenever they do arise, hopefully without missing a beat. In other words, try making a habit of making new habits.
Proactiveness
Transformative leaders must focus on both short-term and long-term goals, requiring them to be proactive and forward-thinking on multiple levels. When introducing new solutions and processes, consider both their advantages and potential disadvantages and how you’d respond to each. For example, if your new email software doesn’t work, do you have a backup plan for communicating with customers and clients?
Adopting a proactive mindset and communicating your thought processes to relevant colleagues can boost trust and confidence in your leadership and your new solution.
Humility
While other leadership approaches rely on hierarchies, transformational leadership aims to put leaders and employees on similar social levels. Humility and modesty are essential transformational leadership qualities for multiple reasons. First, humility can make you more approachable to employees and break down social divisions that don’t need to be there. Beyond that, being humble can make you more open-minded and willing to listen to other people’s ideas once you accept that you don’t have all of the answers.
Similar to open-mindedness, the best way to practice humility is to get involved. Spend more time with your employees as a team and one-on-one, and be aware of any social barriers needlessly keeping you apart.
Check out these real-world examples to learn how transformational leadership has benefitted career development, public trust, and teamwork.
Microsoft embraces empowerment
When Satya Nadella became CEO of Microsoft in 2014, he shifted the company’s mission statement to focus on “empowering” everyone in the world. He pushed for a company-wide change in mindset, encouraging collaboration and developing goals that served more than Microsoft’s bottom line.
This was a stark yet necessary public rebranding that established Microsoft as more than a tech giant but a trustworthy industry leader. Beyond the public perception, Nadella’s transformative leadership approach inspired innovation within the company and contributed to steady sales growth.
Google CEO leads with understanding
An early employee of Google, and later CEO of YouTube, Susan Wojcicki embodied transformational leadership at the helm of these tech giants. At Google, she spearheaded efforts to extend maternity leave for employees, leading to a 50% higher retention rate among new mothers and throwing open the doors to their contributions.
In addition to this policy, she encouraged collaboration between smaller teams across Google to open up dialogue for new ideas and democratize innovation. Wojcicki’s transformational approach undoubtedly helped shape Google’s reputation as a company that truly values its employees.
Coworking creates community, especially if you maintain an open-minded and transformational atmosphere. Whether you’re adapting to significant changes or raising morale, transformational leadership can help you boost performance and maximize your team’s potential.
Of course, where you and your team actually work can significantly impact the atmosphere, too. Explore Industrious’s on-demand coworking spaces to give your team the perfect space to grow.