How transformative is Transformational Leadership?

Is Transformational Leadership the future leadership model? Companies of almost all sizes and industries are transforming – or being transformed. The challenge for organizations is to perceive change hypersensitively (external world) and to translate it quickly into actions or reactions (internal world). Business as usual is no longer sufficient for this task.

Change needs leadership – so it is obvious to think about new leadership approaches. What form of leadership is best suited to accompany such transformation processes? In a critical situation and confronted with a novel problem (e.g., pandemic, artificial intelligence, climate change, war), decisions must be made based on uncertain data and high dynamics. Leadership decisions can no longer be derived from (retrospective) knowledge. Leadership in a transformation must be based on other principles.

It is possible to be misled into thinking that transformational leadership is automatically the most suitable leadership approach, because the term “transformation” is already part of the equation. However, this leadership model is not about the transformation of the company or entire markets, but about the transformation of employees and their behavior.

Isn’t that what organizations strive for? When leaders talk about “picking people up and taking them with us,” they usually mean changing the way employees think and act. They should have a growth mindset (another phrase) and a clear picture of the future. They should do everything independently and on their own responsibility so that the company remains successful. They should be open and willing to face upcoming changes. Transforming people’s behavior thus seems to be a meaningful goal.

Transformational leadership is a leadership approach that aims to transform the behavior of employees. A manager no longer uses (only) the familiar extrinsic motivations such as salary or status, but tries to activate the intrinsic motivation of the individual employee. The focus is on the personality of the leader himself or herself and how well he or she succeeds in shaping relationships with the individual people and getting them to transform.

Transactional Leadership vs Transformational Leadership

Before I discuss the key characteristics of Transformational Leadership in this article, it is important to draw a distinction. Bass & Avolio (1994) also describe transactional leadership as a model from which transformational leadership differs. Put simply, transactional leadership is based on a deal: people perform because they get something in return (salary, status, incentives).

However, extra effort – the famous ‘extra mile’ – are not included in this transaction. Why should employees contribute more if they no longer receive any remuneration for it? In its most extreme form, transactional leadership leads to the well-known ‘service by the book’.

This is where transformational leadership comes in. It is based on the assumption that people are prepared to perform better and change under certain conditions. These conditions are described below:

Idealized influence

The leader is perceived as a professional and moral role model and has a personality that generates trust and respect. In this context, Bass explains the role of charisma and also calls a derivative of transformational leadership charismatic leadership. Here, the first difficulty already becomes apparent. What is charisma – and how does one acquire it?

Of course, charisma can be trained. Strong rhetoric, clear communication, symbols, stories – everything can serve to increase presence and be perceived as a strong leader with charisma. Unfortunately, there are also countless examples of charismatic personalities who are manipulative or narcissistic.

In our work, we therefore focus on authenticity and let leaders reflect on their own personality. If you know your own values and convictions, and where they come from, you can communicate them transparently, act according to your own words and values, and provide guidance. Trust cannot be commanded. Trust arises when leaders act congruently. It is not important to be perfect. It is important to be reliable and to be comprehensible in one’s own behavior.

Inspirational motivation

In companies, a lot is done to make the need for change urgent. Kotter speaks of the ‘Sense of Urgency’ as the first phase of a change process. The crisis is invoked. From this, a certain compulsion is derived and change is presented as inevitable. That may be correct.

But how much time is spent in return on drawing a desirable picture of the future? What is needed so that employees do not perceive change as a threat, but can make sense of it? Transformational leadership makes inspiration a prerequisite so that people do not resist a change but are intrinsically motivated to go along with it – and then no longer need to be taken along. The Transformational Leader will look at the future and communicate a vision.

Instead of stoking fear of loss (crisis, Sense of Urgency), the focus is on the desire to win (Vision of a Desirable Future). Vision is a big word – it is often enough to articulate a vision or mission for your team, department or business unit. People are motivated when their work creates value for others – that creates meaning in the eyes of employees. So what is needed is not (just) the big corporate vision, but small visions for improving the living or working conditions of others.

Inspirational stimulation

The third condition for transformational leadership is the empowerment of employees. Every leader wants employees to make their own decisions and act on their own responsibility – and complains about being involved in all decisions themselves.

The transformational leader empowers teams to make their own decisions, provides the necessary structures and resources, and strengthens employees’ ability to act. But above all, it consciously interrupts existing traditional patterns of dependency. Employees ‘need’ the leader to make decisions, and leaders ‘need’ to decide. After all, their legitimacy derives from this. How often are managers even referred to as ‘decision makers’?

In Transformational Leadership, managers succeed in establishing psychological safety. This includes allowing teams to make decisions that, in retrospect, turn out to be wrong or ineffective. But such experiences provide for learning processes, development and improvement and thus fulfill the basic thesis of transformational leadership – the transformation of people.

Individualized consideration

The final condition for successful transformational leadership is to develop employees individually. Traditionally, personnel development is outsourced to an HR department. Leadership in this context is limited to an annual development meeting, which is often perceived as a ritual by both sides.

Transformational leaders make the development of people one of the most important tasks. They do not focus on what is now, but on how it could be in the future. They look for hidden talents, strengths and potentials and consider how to nurture them.

Leadership takes place from a coaching mindset. So instead of delivering instructions or decisions, the leader asks smart questions and thus encourages the employee’s personal responsibility and autonomy – and avoids the tendency to make decisions.

Is transformational leadership the leadership model of the future?

Reflecting on the extensive literature on transformational leadership, this leadership model appears to be promising and future-oriented. It provides visions and is designed to activate the intrinsic motivation of those being led. It increases personal responsibility and self-organization in teams and promotes the strengths and potential of individuals.

But this model – unlike traditional management – depends much more on the personality of the leader. Those who are only superficially involved with transformational leadership may work on their charisma, appear visionary and increase their presence through various techniques. But an inwardly directed, reflective examination of one’s own leadership identity and personality, one’s own values, convictions, and beliefs does not necessarily have to take place. This leader may then appear visionary and more charismatic than before, but a real maturation does not take place. This is where the line to manipulation is crossed.

In addition, there are personalities who are more introverted, avoid the big stages, but are very effective in silence. The pressure to develop charisma inevitably leads to a loss of authenticity and congruence – which is perceived by those being led and achieves the opposite of what transformational leadership promises.

A major criticism is that the paradigm in which leadership takes place does not change. The status differential between leaders and those led remains the same or even increases. The basic attitude of transformational leadership – people can transform themselves and their behavior – is certainly desirable. But in this mindset, a strong leader remains necessary.

Last, von der Oelnitz (1999) provides ethical criticisms: Values and beliefs of employees should be changed through transformational leadership. Regardless of whether this is even possible, this idea follows ‘only’ simple economic interests and can lead to a “commercialization of feelings” (Hochschild, 1990).

In summary, the Transformational Leadership model provides important impulses for a changed focus of leadership: towards more self-organization, development of potentials, formulating visions and purpose. But the essential means to achieve this does not change – it depends on the leader and can quickly lead to abuse.

True self-organization also needs leadership, but rather in the sense of servant leadership, or leadership is shared in teams in the context of lateral leadership approaches. Only when leadership is no longer seen as a role but as a function that can be assumed by anyone, only when leaders work with the thesis of making themselves superfluous and not elevating themselves in their role – then vibrant, agile companies with a new leadership paradigm have emerged.

Conclusion

Transformational leadership provides new impulses for leadership work that are important and valuable. At the same time, it requires an even stronger leadership role if it is also lived differently. It is merely a further development of transactional leadership by other means, but not a paradigm shift.

In this sense, transformational leadership is not transformative – it does not lead to a fundamental change in the understanding of leadership personality and leadership culture. If you are looking for that, you should look at lateral leadership, servant leadership, or dialogic leadership.

In our New Leadership Framework, we have summarized the most important principles from 9 modern leadership models and made them available for download in a white paper.