What Is Transformational Leadership and Why Is It Effective?

By Indeed Editorial Team

Published 26 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Growth and change are common in many industries, and transformational leadership can help team members to embrace change when an organisation's leaders foster a positive company culture. If you're looking to lead a team effectively, transformational leadership may be one of the best ways to do so. Knowing what transformational leadership is can help you prepare for how to develop others with a motivational and positive approach. In this article, we explore transformational leadership, explain why it's effective and list some examples of how it works in the workplace.

What is transformational leadership and why is it effective?

Learning the characteristics associated with transformational leadership can help you develop this effective leadership style. Transformational leadership is a leadership style where a leader encourages, inspires and motivates their team members to innovate and create positive changes that can shape a company's success. This leadership style can help increase group morale and lead to fast innovation, improve teamwork and decrease turnover rates in the company. This is due to the team getting a strong sense of workplace culture and feeling a sense of ownership and independence in the company.

Most transformational leaders motivate their team without micromanagement, which can lead to individuals feeling like the leader trusts them. Here are some reasons transformational leadership can be effective in a workplace:

  • gives team members a sense of trust to make authority over their assigned jobs

  • allows individuals freedom to be creative and find new solutions to problems

  • provides a chance for people to grow and develop into leaders themselves

  • gives people encouragement so that they can be more motivated to work harder

  • sets clear goals for teams and individuals to follow

  • allows recognition and support to team members, leading to better workplace morale

  • models integrity and fairness, facilitating a positive workplace culture

  • provides individuals with a higher sense of job satisfaction

  • inspires people to achieve their goals in the workplace

Related: How to Improve Leadership Skills: Guideline and Tips

Transformational leadership vs. other leadership styles

There are many types of leadership styles. While you're trying to determine what leadership style works the best for your team, it's essential to first assess what your team needs and how the organisation works. Transformational leadership may be successful for organisations that require change to grow and help to create collaborative teams that believe in the company's vision and mission. Transformational leadership may not work for every company, with some teams requiring another form of leadership style to thrive.

Here are some ways that transformational leadership styles differ from other leadership styles:

Transformational leadership vs. transactional leadership

Many individuals and organisations often confuse transformational and transactional leadership styles since they sound familiar. Transformational leadership focuses on motivating and inspiring individuals through stimulation and giving them freedom and space to grow intellectually. It usually focuses on long-term changes by challenging the team. It also emphasises employee freedom.

Conversely, transactional leadership focuses on making individuals comply by withholding and providing rewards and benefits in the workplace. It focuses on short-term changes instead of inspiring an overall change.

Related: 10 Leadership Role Examples (With Functions of Leadership)

Transformational leadership vs. coaching

Transformational leadership and coaching are two slightly similar leadership styles in which the leaders focus on the individual's growth and goals. In coaching, the leader provides recognition to their team members through their strength and gives them a lot of encouragement to grow. Leaders that follow the coaching style often help their team members set goals they can reach and give them regular feedback on how to improve.

Transformational leadership vs. servant leadership

In transformational leadership, leaders provide guidance to their team members but give them freedom. Servant leadership refers to a leader focusing on the individuals on their team to ensure that their team members feel fulfilled professionally. They also spend a lot of time with individual team members to make sure that they meet each team member's personal needs.

Transformational leadership vs. hands-off leadership and authoritative leadership

Transformational leadership happens when a leader gives an equal amount of attention and freedom to their team members. A hands-off leadership style, also known as a laissez-faire leadership style, focuses on leaders providing little to almost supervision to their team members. They trust their members to be able to grow and flourish on their own.

In an authoritative leadership style, the level of focus leaders give their team members is completely opposite from a hands-off leadership style. Leaders using the authoritative leadership style focus highly on results and efficiency, which leads to them heavily supervising their team. Authoritative leaders also spend most of their time managing their team members to ensure they produce results and hit their goals all the time.

How to be a transformational leader

If you're looking to develop yourself into a transformational leader, here are some steps you can take to become one:

1. Lead your team with an inspired vision

If you want transformational leadership to be effective, it's essential to have an inspirational and clear vision of what you want your team's future to be. You can align your vision for the team with the company's mission and purpose since it's relevant to what the business wants to achieve. Your purpose for the team can also include some core values that you have and define your team's capabilities.

When you've identified and defined your purpose for your team, you can speak to your team to determine how they can contribute to your purpose and vision. One good way to do this is to use opportunities and key results for the team as a framework when you set goals. This can help your team have a consistent and aligned purpose to work towards to grow together.

2. Motivate your team

After you've set a purpose for yourself and the team, it's important to ensure that the team believes in the purpose so that they're motivated to work towards it. If you want the team to trust in your ability to lead them, it's important to lead them according to the same values you set for them. You can keep them motivated by connecting your purpose to your team member's goals, bringing it up in conversation regularly and finding similar ways the whole team can contribute to them. A transformational leader requires strong self-esteem to motivate their team.

Related: How to Motivate (Plus Tips on Self Motivation and Leadership)

3. Focus on the big picture

To keep the team motivated and inspired, it's essential for a transformational leader to look at the larger picture of any challenges along the way. Trusting the team is very important to succeed as a transformational leader, especially when you can trust the team to work independently on their individual tasks without requiring regular supervision. A transformational leader usually spends time reviewing the values and mission of the organisation while leading the team to complete tasks and projects to achieve the company's goals.

What characteristics does a transformational leader have?

If you want to become a transformational leader, it's important to know the characteristics a transformational leader has so that you can develop the attributes you require accordingly. Here are some characteristics that a transformational leader has to lead their team effectively:

  • Mutual respect: Respecting your team and having team members respect you is important since it leads to a more collaborative team that can work better together. If a team respects you, you can serve as a positive role model.

  • Organisational skills: Having organisational skills can help a transformational leader delegate the best task to each team member and track what they do to contribute to the organisation's goals.

  • Creativity: A good transformational leader requires a sense of creativity to devise fun and engaging ways to inspire and motivate their team. Creativity can also help a transformational leader challenge their team members.

  • Responsibility: Responsibility is essential for a transformational leader to have since it shows the team that they can trust their leader. If a leader gives a team a task, it's important for the leader to be willing to take on the task too.

  • Integrity: It's essential for a transformational leader to have integrity and be able to own up to any mistakes that they make while leading the team. Being able to discuss their mistakes and learn from them shows the team that a team leader is humble and able to grow from their own shortcomings.

Related: Pros and Cons of 10 Common Management Styles (With Examples)

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