What is Transformational Leadership?
Transformational leadership is the ability to inspire, co-create, and guide organizational change for a positive business and employee impact.
Definition of Transformation: Make a thorough or dramatic change in form, appearance or character.
The caterpillar-to-butterfly metamorphosis is likely the most frequently referenced metaphor of transformation. It represents a complete change of form, appearance, and function. Yet this metaphor fails to illustrate the heart of transformation: character .
A brief history of transformational leadership
Transformational leadership was first referenced by Jim Downton , a professor and religious activist in the 1960’s. A transformational leader works with others in identifying needed change, creating a vision to guide the change, and co-creating it with committed members.
James Burns extended the work of Downton, shifting the focus from the traits and actions of great leaders to how those leaders interact with collaborators toward mutual goals. Burns focuses on the strength of vision and personality to inspire others and change expectations and perceptions, moving people beyond their self interests.
Transformational leadership was embedded into the Full Range Leadership Model by Bernard Bass by bundling it with laissez-faire leadership styles (a hands-off, “let them do what they want” approach) and transactional leadership styles (compliance and goal-oriented with rewards and punishments). The shift from laissez-faire to transactional to transformational improves business results through more active engagement.
Vision for change
Transformational leaders shape not only the direction of the organization – they shape the organization itself.
Simon Sinek is well known for his “Start with Why” approach. Working inside-out with his Golden Circle, he guides leaders to shape “how” and “what” an organization does based on its “why.” This is great advice to help leaders connect to the purpose and mission of the organization and guide meaningful direction. However, transformational leaders further balance the why, how, and what an organization does with who an organization is and aspires to be.
Transformational leaders shape culture to build community, safety, and belonging.
In addition, transformational leaders define a vision for a more effective organization that is capable of impacting business performance and results. They strategically focus on yearly goals the organization needs to achieve and the systematic changes required in order to achieve them. Transformation in human organizational systems is not a one-time, one-year activity. Rather, it is an ongoing process of focus, inspection, and adaptation toward new ways of working. This involves visioning and revisioning.
Co-creating change
Transformational leaders don’t just drive organizational change – they foster human transition.
William Bridges, author of Managing Transitions, differentiates change from transition. He explains that change is physical, tangible, and organizational. Mergers, layoffs, relocations, reassignments, reorganizations, promotions and demotions, and hiring and firing represent change. The same goes for new policies and processes, new strategy and direction, new markets and competitors, and new tools and technologies.
Leaders execute change while employees experience it.Leaders plan change over time while employees feel change like a tidal wave — all at once.
While change is necessary for survival, change is also disruptive. The human brain is wired to activate a threat response when change occurs. Each of us inherently has a defensive reaction to change.
On the other hand, transition is psychological. Intangible. Human. Each person responds to change uniquely. Transitions occur over time, not all at once, and occur to varying degrees, not in black and white. Organizations and the humans that make them up are complex; change impacts everyone within the organization in different ways.
Transformational leaders not only drive change – they champion human relationships and growth. They understand, empathize, and foster transition through connection, co-creation, and adaptation. They intentionally build teams around the change because they know others will take more ownership and accountability in the change process. Transformational leaders inspire change, engage others in the change, celebrate positive change stories, and challenge the old ways of thinking and working.
Role modelling change
Transformational leaders not only guide change in others – they role model change in themselves.
Organizational transformation will not occur without leadership transformation. An organization is a collective of individuals with various titles and statuses. Organizations mirror their leaders, and culture forms from the beliefs and behaviors of those leaders. Transformational leaders recognize this and first seek to model the change in themselves before expecting others to follow.
Transformational leaders have the courage to step back, and be open to being wrong. They take extra care to step down from their default power assignment. They also create the physical space and psychological safety for others to step forward. If a room or meeting is occupied by the leader’s presence and thinking, others will likely concede and follow. If that same room or meeting is free of the leader’s bias and they have deliberately advocated for contributions and even challenges from members, others will likely feel safer stepping forward.
Catalyzing change
Transformational leaders do not stop after the transition is complete – they continually invest in a transformation journey.
For every effective organization and each leadership team behind it, the one thing that sets them apart is the philosophy of marginal gains. Marginal gains build upon incremental improvements in any process adding up to a significant, collective improvement. Think of financial investing where a marginal gain each year, combined with reinvestment, can double your money in seven years. This concept works in high-performing teams in finance, sports, and business. It also works for organizational transformation.
A brief transformation story:
A leadership team sought to transform the organization to deliver more value, with higher quality in less time to their stakeholders – in other words, “better, faster, and cheaper.” The first year focused on reducing time to market on a few projects (less than 5% of the portfolio) by four times (from one year to three months)! In the years to follow, additional projects were included, along with new quality initiatives and a simplification of the overall portfolio. Over the course of six years, they radically transformed the organization to deliver on all projects quarterly or sooner, with 75% fewer production issues, lowering overall development and support costs by just as much.
Marginal gains are small gains added up to achieve transformational results. Had the leadership team set out on a six-year journey at the outset, no leader would have likely signed up. It was through these smaller marginal gains, year after year, that the overall transformation was possible. Transformational leaders recognize the value of marginal gains and seek to make dramatic impacts in small ways. Repeatedly.
A transforming example: Satya Nadella
An inspiring example of a transformational leader today (2021) is Satya Nadella, CEO of Microsoft. By many accounts, Nadella has taken Microsoft from the brink of irrelevance to tech world dominance in under 5 years. However, his story is as much about how he has transformed their culture as their business performance.
Under Bill Gates, Microsoft grew to dominate the home and work PC business with their Windows operating system, Office applications, and the Internet Explorer browser. The culture at Microsoft combined innovation and competition, providing autonomy for teams to create solutions with a clear “kill the competition” mentality. Apple, Netscape, and others were the “losers” in those early market battles.
In 2000, Bill handed the CEO role to a long-time number-two pick: Steve Ballmer. During Ballmer’s tenure, wins turned to losses as bets on mobile, search, and cloud were late, missed, or otherwise mis-stepped. Microsoft’s stock price during these 14 years was negative while Apple’s grew over 2000% and Google and Amazon were up by 400-to-500%. Even worse, the competitive culture at Microsoft turned on itself as infighting became rampant. The culture was eroding while business performance was stagnant.
After graduating from the University of Wisconsin with a Master’s in Computer Science, Nadella worked at Sun Microsystems before joining Microsoft in 1992. Both Gates and Ballmer called upon Nadella to lead high-profile projects for Microsoft including Bing Search and Azure Cloud.
In taking the helm, Nadella not only reshaped Microsoft’s strategy but also their culture. He brought in a more collaborative approach with both partners and leaders. He evaluated which fights were worth fighting, and which issues were better resolved as partners. He introduced their Office suite on Apple’s iOS platform, and that support continues today with iPadOS and MacOS. Further partnering with Salesforce, Oracle, Red Hat and others, Nadella sees almost a borderless ecosystem to unlock a trove of growth opportunities.
For leadership and culture, Nadella required his leadership team to read several books including Carol Dweck’s Mindset. This helped them reframe their thinking from a zero-sum game of competition toward a boundless game of collaboration, both internally and externally.
Transformational leadership from any seat
Transformational leadership does not require the CEO, Chairman, or “Boss” title. It can occur at any level of the organization from any seat within it. Listen to our (Re)Learning Leadership Podcast Episode, Leading From the Middle with Travis Matthews, to hear one such story as an example.
Where to go from here?
Transformational leadership is the ability to inspire, co-create, and guide organizational change for a positive business and employee impact. We encourage you to start your own personal transformation journey to prepare you in leading an organizational transformation.
Join one of our Agile Leadership Journey Agility in Leadership Workshops to improve your understanding, awareness, and balancing techniques to improve your own leadership.
