Transformational leadership is extremely relevant in the modern enterprise. This article covers a transformational leadership definition, its pros and cons, its characteristics, and how it can be applied in the workplace.
We’ll also compare transformational leadership to other styles and theories, such as transactional leadership.
To add value and stay relevant in today’s fast-evolving digital workplace, it pays to understand different leadership theories such as these.
Transformational Leadership: Definition, Pros, and Cons
One of the most important factors that can influence the success or failure of an organization is its leadership. A leader’s ability to inspire vision, engagement and action in his or her followers is crucial.
Transformational leadership is a style of leading that focuses on empowering employees to achieve top performance through motivation, inspiration, and alignment with organizational goals.
Part of the Full Range Leadership Model, transformational leadership aims to:
- Identify problems and changes needed to solve those problems
- Create a vision for change
- Inspire employees and enable them to grow
- Highlight the most important priorities in a given situation
- Persuade using logic and reason
- Offer followers freedom of choice
- Execute change with a committed group of people
Advocates of a particular leadership style may contend that transformational leadership is better than other leadership styles, such as transactional leadership (see below).
However, each leadership style has its benefits, drawbacks, and use cases, as we’ll see below.
Pros of Transformational Leadership
In a business context, transformational leadership can be excellent for those who wish to:
- Lead organizational change
- Cultivate a shared sense of purpose
- Create cultures built around learning and development
- Fuel business growth
The focus of transformational leadership is on, among other things, self-development, which in turn helps improve the performance and results of growth-oriented organizations.
Cons of Transformational Leadership
Rather than thinking in terms of universal drawbacks, we should view leadership styles as having specific use cases. As we saw above, for instance, transformational leadership can be useful for driving organizational change.
Yet transformational leadership emphasizes directed transformation, often with a cultural component, which is not always relevant to every organization.
Therefore, transformational leadership may be less useful for organizations that:
- Are not engaged in directed business transformation
- Prefer workplace cultures built around autonomy and self-direction
- Prioritize efficiency over innovation
To better understand the benefits and drawbacks of transformational leadership, let’s compare this leadership style to other leadership styles, such as transactional leadership.
The Full Range Leadership Model
Transformational leadership, as mentioned, is part of the Full Range Leadership Model.
This model attempts to describe, as the name suggests, a full range of leadership styles that includes:
- Laissez faire leadership, or the denial of leadership responsibility
- Transactional management and leadership, which focus on rewards and punishments as a means of improving performance
- Transformational leadership, which, as mentioned, aims for long-term transformational change
Ultimately, the right leadership style for a given situation will depend on the needs of the organization, the team, the leader, and the task at hand.
Here are a few examples where each type of leadership can be useful.
- An organization with a flat management structure will offer more autonomy and authority to individual team members. In such instances, leaders may prefer to delegate more responsibilities to each team member and adopt a laissez faire management approach. This approach will work more effectively when team members are highly skilled and can operate independently.
- A company that has been producing the same products and services for decades – and will continue to do so for the foreseeable future – may have little use for a transformational leader. In such instances, transformational leadership would be less useful than other approaches, such as transactional leadership.
- An organization heavily invested in digital transformation and digital innovation will, by definition, be focused on organizational change. In this case, it pays to have visionary company leaders with transformational leadership styles.
It is also worth pointing out that different leadership styles can coexist within the same organization.
For example, a hyper-growth organization may have a transformational CIO, transactional middle managers, and separate teams that operate via a laissez faire model.
Choosing the Right Leadership Style
There are several points to consider when evaluating which leadership style is most appropriate, some of which have already been covered.
Here are a few examples:
- The personality of the leader or manager
- The personalities of the team
- The organizational culture
- The organizational structure
- The directive of the business or the business unit
In short: there is no such thing as a “perfect” leadership style for every situation.
Instead, leaders should evaluate the needs of a given situation, including personalities, team structures, the workplace culture, and organization’s direction. After all, too many transformational leaders may result in competing visions for change, inefficiencies, and even internal conflict.