Transformational Leadership Defined!
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Transformational Leadership is a style of leading people in an inspirational way rather than driven by transactional numbers alone.

Considerable research has been done into the concept of Transformational Leadership, particularly since first introduced to a wider audience, by James MacGregor Burns in 1978.

However, whilst much of this research focuses on leadership concepts in the political arena and in organizational psychology, there is conclusive and consistent evidence to prove that Transformational Leadership does create significant positive change in an organization. In addition, the resultant redesign of organizational culture creates an environment where the followers give more than either they, or the organization, likely anticipated.

Transformational Leadership maximizes the human potential within any organization, thereby lowering headcount and cost, increasing ROI and improving retention rates of high performing employees and leaders. There is no doubt that there is also a personal benefit to any CxO level executive, in that results are more predictable, surprises are less and the result will be increased personal income, and security of tenure, through achievement of goals.

Some of the more recent adaptations, and definitions, of Transformational Leadership are not so suited to enterprise and public sector agencies, as they are more of a scientific analysis, and the term has been used in religious or spiritual nuances. The application as intended for the enterprise sector is a powerful, charismatic, yet results oriented, style of leading an organization to produce excellence consistently. This is effectively delivered through the loyalty and willingness of the human resources within, and supporting, the organization to follow the leader and execute the strategy flawlessly, whilst retaining the freedom of decision making as set down by governance of the enterprise.

When this moderate and rational view, of this type of charismatic and inspirational leadership, is taken and combined with the essential transactional leadership skills required for today's markets, then a significant advantage over competitive environments is soon evident.

At the other end on the management, or leadership, scale is the Transactional Leader. Transactional leadership, commonly seen today, is where an organization is almost solely driven by quarterly numbers without consideration for the impact on organizational culture. In many cases even the long term strategic positioning, and financial impact for the enterprise, are overlooked or at best given cursory consideration. Transactional leadership is less predictable, and often requires the leader to take a commandant stance, which is almost the antithesis of transformational.

In today's economic environment, more than ever, rational transformational leadership can add enormous value to an organization. Rational comes from a considered balance between the need to aggressively drive transactions to produce a forecast revenue, and a consideration for maximizing the existing human resource to its highest potential. In other words, if the people in the organisation can deliver up to 60% more productivity through a less stressful, but more productive, management style then the result is more predictable and profitability is easier to achieve, even in bleak markets.

Transformational leadership evaluates the human potential of each team member, ensures that they are in a position to deliver excellence, removes all traces of blame in the culture, and works actively on listening to, and inspiring, the individuals deployed to deliver results.

It creates a desire for people to work as a team, in an enjoyable and non-threatening culture, yet always with an expectation of excellence. It creates a 'How To' approach to problem solving and development of new concepts, it allows for early warnings of imminent threats and weaknesses in the organization and strongly encourages celebration of strengths and aggressive pursuit of suitably qualified opportunities.

Transformational Leadership must be demonstrated from the highest level in the organization, and rewarded all the way through the management layers. It is charismatic, passionate and inspirational and attracts the very best candidates for available roles. Everyone in the organization clearly understands the culture, goals and expectations and the leader's role is clearly articulated. The leader is approachable, and is seen and heard regularly on the workplace floor, and in all corners of the organization.

The Transformational Leader uses social networking effectively to create a direct link to all employees, and has systems in place that ensure the abilities of the most expensive assets - people - are fully utilized in a way that gives individual satisfaction to the person, and value to the organization. Everyone in this type of organization is active, busy and knows exactly what they are required to deliver and when. This minimizes frustration, and increases employee satisfaction and loyalty.

There is an enormous level of mutual respect built between the leadership group and the teams. People are appropriately motivated, and rewarded for their performance based upon their motivational modality. It is important to remember here, that not everyone is motivated by a monetary reward, or a standard trophy. A Truly Great Leader understands this, and uses it to their advantage.

Presentations and meetings for internal discussions are kept to a set of guidelines intended to maximize productivity, and minimize cost, to achieve a result. Focus is on external parameters, particularly the customer and the image of the company. Priority is given always to activity that enhances the customer experience, improves efficiency or increases market share, revenue and profitability.

Redundancy becomes a rare event, unlike today where some large US corporate and agencies are undergoing redundancy rounds every few months, seemingly unaware of the massive impact of this on their highest performers, their customers expectations and ultimately the corporations results, and predictability. I have personally noted, in many companies led by Transformational Leaders, that weak contributors are often effectively isolated by their own teams and usually leave of their own accord, thus reducing exit costs.

The Transformational Leader is a mentor to the immediate team, a coach to the whole organization and to the Board, Analysts and other stakeholders. They deliver the vision and the 'how to' with passion, and demonstrate commitment daily in a visible way. They exude quiet confidence, have particularly strong listening and communication skills at all levels. They are very visible, active, moving and shaking, yet appear calm and rational. They have high integrity, and high expectations of delivery from their teams. They act swiftly and decisively on important issues, they communicate openly with the Board of Management and can forecast with accuracy. They can demand the highest compensation for the type of results they will deliver!

Shareholders of public corporations would do well to start reviewing the leadership profile of any organization in which they would consider investing. Leadership profiling for Analysts and Shareholders will give a strong indicator in the likely performance parameters of that corporation in the coming quarters. The Leader of an organization, will have a significant positive or negative affect on the outcome of results.

Transformational Leaders have a far greater understanding of their business, commitment to the organization (as though it were their own), will forecast more accurately therefore meeting expectations set, and will be an open communicator about the future of the business. This is because instead of just trusting the inner circle, these leaders will communicate directly with all levels of the organization, and due to the mutual respect and trust already built, people will be unafraid to tell the leader of any impending variation or impact.

Transformational Leadership will change the future of Corporations, Governments and Organisations.

Copyright © July 2009 Terrie Anderson
All Rights Reserved.

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Posted on 5 January 2015 by Terrie Anderson