Transformational Leadership

Transformational leadership is a very popular and useful framework for interpreting leadership. It helps categorize different kinds of leadership and the work environments which exist under different leaders. Transformational leadership concepts can also be adopted by leaders to become more effective.

The Full Range of Leadership Models

According to transformational leadership theory, there are many different work environments cultivated by a full range of leadership styles. In general, laissez-faire leadership is thought to do the most poorly, transactional leadership is thought to get better results, and transformational leadership is thought to get the best results. 

Laissez-faire Leadership

The lassiez-faire work environment is a place where the manager does not interfere. This passive manager tries to be “hands-off” and is virtually absent. The followers are abandoned to make their own decisions, set their own goals, and create their own expectations. The passive leader avoids taking responsibility for follower actions.

The laissez-faire leadership style is widely considered to be ineffective since it doesn’t move people at all. It is often felt by workers in bureaucracies who are completely deprived of any leadership. These workers often feel alienated as though their work is meaningless and that there is no one who cares about anything they do at work.

Transactional Leadership

The transactional workplace is thought of as a private market for labor. Managers buy time and effort from their workers for a wage or some other form of compensation. Employees value their pay more than the time and effort they give up, so they are better off for the exchange. They are not interested in the organization’s goals, only in making sure they do the exact work they are asked to do so that they continue to get paid.

The transactional workplace requires setting specifications for work product and then checking if that work has been done properly. Either payment is given for meeting goals or payment is deducted for failing to meet goals. Ideally, everyone in the organization learns what is expected before the work is started.

Transactional leadership maintains the status quo inside an organization. Conformity to established standards is driven by specifications for work as well as feedback mechanisms that reward meeting specifications or punish deviating from them.

There are three kinds of transactional leadership which differ in how and when feedback is given to workers:

Passive management-by-exception leadership. Negative feedback, criticism and negative reinforcement are used after mistakes have been made to train workers to not repeat mistakes. Passive management-by-exception will appear as reactive problem-based criticism. This feedback does not happen during the work process: the manager provides support or feedback long after the work has been completed. The leader effectively provides quality control for the follower’s work and cites irregularities, rules that have been broken or complaints from others. These problems are the exceptions that the leader provides feedback to while largely ignoring the work product that was done well.

Active management-by-exception leadership. If the manager is active, management-by-exception will appear as micromanagement, a style of management where the manager supplies rapid, frequent criticism during the work process. This may stifle followers and leaves little room for the worker to navigate her own work. Management-by-exception ignores the work that is going well and focuses negative criticism on the exceptional cases of low performance.

Contingent rewards leadership. Leaders and followers agree to a set of project expectations and rewards for meeting standards. Ideally, everyone in the organization understands the reward scheme before the work is started. When the work is completed, rewards are given as positive reinforcement for jobs done well.

This is a “carrot” approach to leadership where management-by-exception is more of a “stick” approach to leadership. The contingent rewards style of leadership has been observed to be a very effective style of leadership, much more so than active or passive management-by-exception and more than laissez-faire leadership.*

* Judge, T. A., & Piccolo, R. F. (2004). Transformational and transactional leadership: a meta-analytic test of their relative validity. Journal of Applied Psychology, 89 (5), 755-768).

Transactional leaders apply external stimuli to followers to regulate their behaviors. They do not try to use the well-being of the organization or the passions of their followers as motivation.

Transactional leadership is limiting. It leads to low expectations and low levels of satisfaction and focuses on short-term objectives that can be contracted out. Aspiration and accomplishment are ignored by transactional leadership. Transactional leadership does not promote creativity and innovation since project requirements are set by the leader beforehand. 

The transactional workplace is very rigid and isolating. Transactional leadership creates environments where people fight to win positions of power, to win rewards, and to avoid punishment. Rules dominate the transactional workplace.

Transformational Leadership

Transformational leaders ask followers to work for the good of the organization over their economic self-interests. This kind of leadership engages workers to think beyond their personal actions as transactions with the organization, and it connects them to the values and goals of the entire organization. It also tries to engage the feelings and interests of followers, which can be more powerful ways to move others than “stick-and-carrot” feedback. In addition, transformational leadership raises motivation and morale among leaders and followers.

Four distinct factors are used to characterize transformational leadership:

1. Idealized influence. This is what is often identified as charisma or leadership image. Conviction, an emphasis on trust, displaying ethical values, emphasizing competence, making bold statements and making statements about the future all contribute to idealized influence. A leader has idealized influence if followers try to emulate her or identify with her as a role model.

The concept of image management to appear like a leader is not specific to the theory of transformational leadership, but it is highlighted in a special way. A special emphasis is placed on how idealized influence involves a shared vision between the leader and followers. Also, transformational leaders inspire respect as role models, and in doing so they gain trust.

Notice that not all charismatic leaders are transformational leaders. Many charismatic leaders use their personal power to achieve personal goals in ways that are amoral or unethical. Transformational leaders try to align personal influence with the communal goals of a group and the group’s values. Unfortunately, many charismatic leaders lack a moral compass and abuse their personal power to encourage submission and dependency in their followers. They also use their charisma to silence opposition.

Clearly charisma is a tool for leadership that can be used for good or abused for terrible purposes.

2. Inspirational motivation. This dimension of transformational leadership involves motivating followers by giving them challenging and meaningful work. The leader encourages followers to imagine the future and how their efforts contribute to that future. The leader proposes high expectations that inspire followers to meet those expectations.

Employee motivation is a subject unto itself and exists outside of leadership theory. Providing work that has meaning is a particularly powerful way to motivate employees. Conversely, revealing that a follower’s work is pointless can be very demoralizing.

3. Intellectual stimulation. The leader encourages rethinking and reinventing solutions to problems. Creativity is encouraged with “outside the box” thinking, but rationality is emphasized.

This makes work more interesting and encourages innovation. Transformational leaders can foster innovation more by making criticisms quietly while publicly praising the success of new approaches.

4. Individualized consideration. The leader acts as a mentor or coach by paying personal attention to followers and by giving them opportunities for personal achievement and growth. Appropriate relationships are cultivated between leaders and followers. The leader addresses followers in a unique, personalized way, but in a way that is fair and equitable across all employees.

Delegation is a powerful tool for developing workers. By delegating tasks that are achievable but challenging, the leader enables followers to unlock their potential. This process requires monitoring and feedback that helps guide the follower. However, managers should take care to be accessible while not checking in so frequently as to suggest a lack of confidence in the follower. Any insecurities of the follower must also be addressed.

Individualized consideration can lead to a sense of empowerment among followers. Workers become enthusiastic, loyal, and willing to make personal sacrifices to achieve high levels of performance.

Effects of Transformational Leadership

Transformational leadership is thought to give rise to the following attributes in an organization:

Worker empowerment. Transformational leadership is inspiring. It empowers followers to work beyond their job descriptions and allows them to modify their roles to meet their higher needs. Transformational leadership gets followers to want to change.

Transformational leadership gives followers the freedom to perform beyond expectations. By not constraining workers and empowering them to contribute to a broader organizational vision, leaders do not put a limit on what they can accomplish.

A focus on leadership over management. Transformational leaders try to motivate their followers, to create motivation inside them to act. This is different from managers who create rules, incentives, and disincentives to prod workers.

Individualized employment contracts. These emphasize achievement over entitlement. A personalized assessment of performance can make the organization more of a meritocracy.

Innovation and flexibility. Transformational leadership opens new ways for followers to think about their work. Transformational leaders act as catalysts for change who often encourage followers to challenge the status quo.

An emphasis on thinking about the future. Transformational leaders incorporate long-term goals into their plans. They take time to develop followers, even though this development may take a long time to pay itself back. Transformational leaders also spend a lot of time explaining their vision for the organization.

A work environment that is more ethical and more just. Transformational leaders are social architects. They provide an environment where followers can do what is best for the greater good. Followers will think beyond their own self-interest and think about what is best for the team. Transformational leaders confront the rules of a bureaucratic organizational structure and help employees think about how their actions impact organization-wide goals. 

Strengths of Transformational Leadership Theory

As a theory, transformational leadership has many strengths. First of all, it is intuitive since most people immediately see the value of a transformational environment over a transactional one.

Transformational leadership is also a useful theory because people can imitate and develop its components. Transformational leadership is described as a series of reproducible actions taken by leaders and followers, so it can be imitated. In fact, many people take Multifactor Leadership Questionnaires (MLQs) to determine their strengths and weaknesses in the four transformational leadership factors. If they find that they are weak in a factor, they can compensate by practicing targeted actions.

Transformational leadership theory has been used to study leadership across cultures and different kinds of organizations. It has been found to be a very useful, general framework for studying leadership.

The Practical Value of Transformation Leadership Theory

The behaviors promoted by transformational leadership theory can be applied by any leader. Leaders can consider how their organizations and leadership style is consistent with the 4 I’s, and they can make changes based on these factors. Applying these principles is realistic and achievable.

Gary Yukl* suggested a series of steps to initiate transformational leadership. As a first step, the leader should work with followers to develop an attractive and challenging vision for the organization. This vision should then be linked to a strategy that will make it a reality. The vision and the strategy should be transformed into specific actions that form a plan. The leaders should communicate optimism, confidence and commitment to the vision strategy. Progress should be made through small steps in the plan leading to its completion and the realization of the vision.

*Yukl, G. (1999). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. Leadership Quarterly, 10, 285-305.

Transformational leadership is increasingly relevant to modern organizations. Today’s leaders face complex challenges that require creative solutions. Innovation, creativity and the flexibility required to make changes are required of a modern workforce. Transformational leadership cultivates these qualities while laissez-faire leadership and transactional leadership do not. 

It should also be noted that transformational leadership and transactional leadership are not mutually exclusive. They can coexist in the same workplace. Thus, even if a leader values existing contingent rewards, transformational leadership factors can be introduced. 

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