How transformational leadership can positively affect your business

In spite of having all your team's tools and work processes in place, do you still feel your employees are disengaged and uninspired? A clear and confident leader is one major component of an active, motivated workforce.

When speaking of leadership, it's useful to note that there are several different types of leadership styles, all with benefits and downsides. One such unique type of leadership style is transformational leadership.

Transformational leadership is a system where leaders work towards creating change and influencing the behavior of their followers through inspiration rather than with rewards, punishments, or other tangible results.

Emergence of the "Transformational leadership" concept

James V. Downton, a sociologist who studied leadership and group behavior, was the first to introduce the concept and even coin the term "Transformational leadership."The concept was further developed by presidential biographer and leadership expert James MacGregor Burns.

Inspired by Burns's work, American scholar Bernard M. Bass further researched and developed the concept. According to Bass, transformational leaders possess the following traits, also known as "the Four Is": Idealized influence, Inspirational motivation, Intellectual stimulation, and Individualized consideration.

Idealized influence is when a leader acts as a role model and leads by example.

Inspirational motivation means the leader sets challenging and achievable goals and inspires the team to move forward towards achieving them with optimism.

Intellectual stimulation occurs when leaders encourage their followers to be open to new ideas and be more creative.

Individualized consideration is the leadership practice of forging and nurturing healthy relationships with their followers. This style often means that the leader is more caring and offers support and empathy.

Who are transformational leaders, and what makes them stand out?

Unlike the transactional leadership, which follows the principle of gaining compliance through rewards and punishments, transformational leaders inspire and influence their team through their actions and motivate them to strive ahead outside of their comfort zone. They work with the team to enhance their morale and help unleash their true potential. These positive changes in turn affect the entire business.

Transformational leaders are also typically more charismatic and easily gain the trust and loyalty of their team members.

Now that you understand the essence of transformational leadership, let's explore the advantages it can offer a business.

1. Establishes strong relationships

Transformational leaders are conscious of the fact that in order to build a strong business, one must start with building sturdy and healthy relationships.  All strong relationships rely on honest and transparent communication. Forging relationships within a team helps minimize internal conflicts and develop unique talents within the team. Ultimately, transformational leaders help eliminate unhealthy relationships and encourage harmony within the team.

2. Serves as an ideal influence

" The key to successful leadership today is influence, not authority." - Ken Blanchard 

Transformational leaders model the behavior that they want their teammates to personify. A transformational leader walks the walk and earns the trust and respect of their teammates.

These leaders quickly grasp the needs of the team and help them achieve their objectives with satisfaction, which on a larger scale enhances the growth of the business.

3. Helps bring enthusiasm and motivation into being

Transformational leaders are also good at analyzing and identifying the gaps in a company's vision and in formulating a new one when needed. Their charisma helps them bring this vision to their teammates and get everyone on board.

We all know enthusiasm is highly contagious. Transformational leaders are usually eager and upbeat, and in turn, exert the same positive influence on the people around them. They motivate the employees by their behavior and use of effective communication. Effective communication and the ability to motivate go hand in hand with each other. Poor communication is a hindrance to employee engagement.

4. Encourages learning and stimulates creativity

In addition to working towards a unified goal and improving self morale and satisfaction in employees, transformational leaders encourage their employees to continue improving by creating opportunities to face new challenges. They help their teammates discover their own capabilities by bringing them out of their comfort zone.

When an employee's growth becomes stagnant, it directly affects the growth of the business. Good transformational leaders keep their teammates engaged in their work and open to new learning areas to help them grow consistently.

5. Reduces employee turnover

According to this Bersin by Deloitte study, "The retention of high potentials at all levels has strong links to an organization's ability to meet and/or exceed financial targets."

Employee retention is crucial for an organization's success, partially because finding and training new employees costs so much, and partially because high employee turnover can lower team morale and create roadblocks in work processes.

By boosting employee morale and by helping them achieve personal satisfaction, transformational leaders often are able to retain more employees than other common leadership styles. They usually follow an inspirational process for gaining the trust and loyalty of their team members, rather than treating their role like a dictatorship. As a result, employees admire and trust their leader and find fewer reasons to quit.

Tips for becoming a transformational leader:

1. Foster a positive environment and set high ethical standards

2. Model the behavior you expect from your followers and inspire them

3. Provide individual support and attend to the needs of every team member

4. Set challenging goals and focus attention on boosting the motivation of employees

5. Use a persuasive approach rather than a directive approach

6. Promote harmony and build a strong relationship with your team

7. Motivate your employees to look beyond self-interest

8. Share ethical values and pave way for moral development

A transformational leader has the potential to help businesses evolve in the long run by identifying gaps, formulating a new vision and challenging goals, and helping employees embrace change with optimism. When employees become the best versions of themselves by moving out of their comfort zones with improved morale, they in turn directly contribute to the growth of an organization.

Communication: a major requirement

One important trait of a transformational leader is the ability to communicate effectively. Companies with disengaged employees have a turnover rate of 34%, according to a study by Harvard Business Review. For transformational leaders to motivate and inspire employees, they must master the art of communication.  Communicating effectively is of utmost importance because the majority of their strategies can be implemented and achieved only when communicated properly. Building and maintaining healthy relationships, motivating the workforce, improving the morale of employees, and so on are much easier when leaders understand the value of good communication.

Under flexible work conditions or uncertain situations like the current COVID-19 pandemic, which has led us to adapt to remote working culture, the need for an intuitive communication tool is predominant. It's impossible to communicate and inspire a team without having the means to communicate in place. So, provide your leaders will tools that help them communicate transparently and collaborate effortlessly with their team.

With the proper communication software, all of these benefits of transformational leadership will help a business grow by improving its bottom line. Increased and growth of employees positively impacts the growth of a business, which in turn results in elevated profits.

Nurture an engaging workforce and reach greater heights with the help of transformational leadership.