Guide to Transformational Leadership: How it's Different and Why it Works

Transformational leadership is a popular leadership style. Unlike traditional leadership approaches, transformational leadership focuses on inspiring and motivating employees to surpass their own expectations and drive organizational change.

This leadership style fosters innovation, encourages personal and professional growth, and cultivates a positive—and inclusive—work environment.

By prioritizing the development of team members and aligning their goals with the organization’s vision, transformational leaders can navigate the complexities of today’s business world.

What is transformational leadership?

Every leader has a unique style based on their approach to communicating, strategizing, and resolving problems.

However, it can be helpful to map that style to a more specific leadership type, such as transactional, autocratic, servant, or transformational leadership.

Each style has distinct characteristics and comes with a separate set of advantages and disadvantages. The term transformational leadership was popularized in the 1970s by sociologist James V. Downton.

Transformational leadership centers on motivating employees to achieve great results.

Whether you want to develop your own transformational leadership style or simply learn more about how it compares to different styles, this guide will walk you through the essentials.

By the end of this article, you'll understand:

what transformational leadership is
how it compares to other styles of leadership
the pros and cons of a transformational approach
how to become a transformational leader

Defining transformational leadership

Transformational leaders develop their style to motivate and inspire their teams. They create a clear, detailed vision—with the direct participation of their employees—that guides the actions of individual members and the group as a whole.

This approach can involve continually improving morale, encouraging people to stretch beyond self-limiting beliefs, and inspiring everyone to achieve exceptional results.

Transformational leadership includes several key characteristics and behaviors, which can be summarized as follows:

providing support and encouragement
granting employees autonomy over how and when tasks get done and a significant degree of decision-making power
using positive tactics to connect job performance to each team member's identity
serving as a role model regarding integrity, ownership, accountability, and attitude

4 components of transformational leadership

By mastering these four components, transformational leaders can inspire, motivate, and guide their teams to achieve extraordinary results.

These components, also known as the four “I’s,” are:

Individualized consideration: transformational leaders prioritize understanding each team member's unique needs and concerns. The key lies in the transformational leader's focus on identifying individual motivations to drive performance and growth.
Inspirational motivation: with insights into what motivates each employee, transformational leaders craft compelling visions that align with everyone's interests. These goals challenge and inspire the entire team, fostering a sense of purpose and encouraging action.
Idealized influence: transformational leaders lead by example, serving as role models for their team. They embody the work ethic, accountability, and values integral to realizing the shared vision. They consistently demonstrate the behaviors they expect from others through their actions and attitudes.
Intellectual stimulation: this is where transformational leadership truly sets itself apart. Leaders actively encourage team members to question the status quo, challenge assumptions, and explore innovative approaches. They create an environment that values creativity and risk-taking, ensuring employees remain engaged and motivated to push boundaries, even if some attempts fail.

Successful transformational leader traits

If you adopt a transformational leadership style, be ready to learn or improve on each of these skills:

1. Self-awareness

Just as transformational leaders assess each team member's strengths, weaknesses, and motivations to help inspire them and assign suitable tasks, good leaders are also aware of their strengths and shortcomings and ready for personal growth.

By setting goals, evaluating your performance, and asking for feedback, you can generate much more clarity about yourself and your leadership style's success.

2. Open-mindedness and adaptability

Transformational leadership is about seeking new ways to achieve goals and conduct business. As such, leaders must embrace change, remain receptive to new opportunities, continuously ask questions, seek feedback, and experiment with novel approaches.

Hand in hand with open-mindedness comes adaptability. As leaders and their teams discover innovative methods, they must be ready to let go of conventional or familiar approaches when necessary while also striving to avoid significant delays or disruptions.

3. Emotional intelligence

Emotional intelligence is a critical trait for transformational leaders, as it enables them to recognize and manage their own emotions while understanding and empathizing with the feelings of their team members.

Leaders with high emotional intelligence build strong relationships, create a positive work environment, and effectively motivate and inspire their teams.

They can navigate complex social situations, communicate sensitively, and foster trust and collaboration, ultimately driving better performance and outcomes.

4. Proactiveness and Courage

Transformational leaders must proactively identify opportunities, anticipate challenges, and take calculated risks to drive their organizations forward. This proactive approach requires courage—the willingness to step out of one's comfort zone, make difficult decisions, and lead teams through uncertainty and change.

Courageous leaders are unafraid to challenge the status quo, advocate for new ideas, and take responsibility for their actions and decisions. By combining proactivity and courage, transformational leaders can inspire their teams to overcome obstacles, embrace innovation, and achieve ambitious goals.

5. Humility

Finally, transformational leaders must demonstrate humility and keep their egos in check, ensuring they don't overrule sound strategic or tactical thinking. This can be challenging, as transformational leadership often involves determining when the leader and their team have developed a better way of doing things.

However, leaders must let others take center stage, acknowledge that they may not have all the answers, and be open to the possibility of being wrong.

By admitting their limitations and mistakes, leaders can foster a culture of continuous learning, growth, and improvement, encouraging team members to take risks, learn from failures, and collaborate more effectively toward achieving shared goals.

Pros and cons of transformational leadership

Transformational leadership is becoming much more popular—and there's good reason for this, especially in markets currently undergoing rapid cycles of change due to AI, automation, a growing focus on sustainability, and remote work.

However, transformational leadership isn't always the right fit. You’ll need to decide if it's suited to your organization and the right fit for you.

For example, enterprise-level organizations may benefit from transactional leadership, whereas startups may be a better environment for transformational leadership.

Here’s a more detailed look at the advantages and drawbacks:

Pros

Some compelling benefits of transformation leadership include:

Passionate engagement: creates more passion and engagement among employees and increases job satisfaction.
Innovation: inspires employees to be more creative or innovative
Enhanced cooperation: fosters a sense of collaboration and shared purpose
Improved retention: lends to better employee retention
Organizational resilience: strengthens organizational resilience
Enthusiasm and job enjoyment: generates more individual enthusiasm and work enjoyment

Cons

Some potential drawbacks include:

Task motivation: some routine, business-essential tasks may not be intrinsically exciting or motivating despite transformational leaders' efforts to inspire their teams.
Lack of clarity: transformational leadership can lead to a lack of structure and ambiguity. Influential leaders must provide a clear vision while encouraging creativity.
Ethical compliance: Innovations encouraged by transformational leaders may lead to non-compliance with established processes. Leaders must ensure initiatives are ethical and take responsibility for adverse outcomes.
Emotional taxation: Transformational leadership can be emotionally exhausting and lead to burnout if leaders aren't mindful of their own well-being.
Slowed processes: The emphasis on collaboration in transformational leadership can slow down processes and goal-setting, but this slower pace can lead to more team buy-in and commitment.

Comparing transformational leadership to other leadership styles

Transformational and transactional leadership represent two distinct approaches to managing and motivating teams. Here are some pros and cons of each:

Transformational leadership vs. transactional leadership

Transactional:

focuses on clearly defined objectives and tasks
relies on a system of predetermined rewards for completed tasks
emphasizes consistency and regimented processes
leaders maintain the status quo and ensure the existing system remains functional
best suited for well-established organizations that have specific requirements or regulations to follow

Transformational:

inspires and motivates employees to achieve beyond expectations
encourages creativity, innovation, and challenging the status quo
focuses on the personal and professional growth of team members
leaders adapt to change and foster a culture of continuous improvement
best suited for startups, creative offices, and organizations seeking change and growth

While transactional leadership may be effective in maintaining stability and ensuring consistent performance, transformational leadership is more likely to drive significant growth, foster innovation, and adapt to the ever-changing business landscape.

Transformational leadership vs. servant leadership

Both transformational and servant leadership focus on inspiring and empowering employees. However, they do so differently. They have distinct philosophical differences influencing how leaders approach their roles and interact with their teams.

Servant leadership

prioritizes needs and well-being of team members above organizational goals
leaders act as facilitators, focusing on removing obstacles and providing resources
emphasizes humility and selflessness in leadership
fosters a supportive and nurturing work environment
aims to help employees reach their full potential, personally and professionally

Transformational leadership

balances the needs of team members with the pursuit of organizational goals
leaders act as role models and visionaries, inspiring others to follow their example
emphasizes charisma and the ability to influence others
fosters a challenging and dynamic work environment that encourages growth
aims to align employees' self-interests with the organization's mission and objectives

Servant leaders prioritize individual needs and focus on providing support, while transformational leaders balance personal development and organizational success—they inspire employees to take ownership of their growth and work towards achieving collective goals.

Ultimately, the choice between servant and transformational leadership depends on the organization's culture, goals, and the team's specific needs.

How to become a more transformational leader

Suppose you believe a transformational leadership style is right for you and your organization.

There's no better time to start shifting your leadership style. Start by developing the following characteristics and habits:

1. Lead by example

Visibly act as a role model for your team, including having a positive and inspiring attitude, demonstrating commitment to group goals, and holding yourself accountable when things go wrong.

Support your team members' ideas and illustrate how you want your employees to act by consistently displaying these behaviors yourself.

Leading by example provides employees with a template they can follow and demonstrates your integrity and commitment to the vision—this is essential for gaining your team's and organizational stakeholders' trust, particularly when pushing for innovative or risky changes.

2. Hold yourself and others accountable

Transformational leadership is much more high-risk and high-reward than other models, such as a transactional leadership style. That's because your team is creating a shared vision and ambitious goals.

The results can be extremely gratifying when things go well: your initiatives might further your career, increase revenue, or improve work processes. However, when initiatives fail, or work doesn't get done, you must hold yourself accountable.

You must continually measure and monitor movement toward short-term and long-term goals to ensure progress. Without concrete metrics for accountability, progress can stall.

Schedule regular retrospectives and model accountability.

3. Have a consistently positive attitude

Part of motivating a team is having a positive attitude—this doesn't mean you must always be cheery or overly optimistic. Being too positive can come across as tone-deaf or insincere.

Instead, listen actively to your employees, support their ideas, avoid letting negative moods linger, and demonstrate faith in the team's ability to achieve every goal.

4. Build strong relationships

As a transformational leader, one of your core responsibilities is to identify your team members' motivations and ensure that goals and tasks align with those motivations. The starting point for this is building solid relationships.

If your employees don't trust you, it will be challenging to ascertain their interests and motives. Begin by engaging in authentic conversations, learning about their career goals, and being a leader they can trust.

5. Create ambitious goals

We all know that goal setting is an essential activity for any leader. Transformational leaders set ambitious goals that are challenging yet attainable rather than settling for easy targets.

Identify priorities that will significantly impact the organization, establish milestones to measure progress, and involve your team in goal-setting to ensure their buy-in and commitment.

6. Proactively identify and solve problems

Transforming your organization involves identifying and addressing barriers and inefficiencies that hinder progress.

Make it a priority to pinpoint these issues and work towards eliminating them rather than allowing them to impede your team's ability to achieve ambitious goals.

(Other stakeholders likely share your frustration with these obstacles but may believe that particular issues are unchangeable or that addressing them is someone else's responsibility).

7. Prioritize coaching and self-development

Finally, continuously strive to enhance your leadership style by learning, dedicating time to receiving coaching, and actively seeking feedback on your leadership approach.

Embrace the mindset that there is always room for improvement and that you will never fully perfect your leadership skills.

By emphasizing self-development and encouraging your team to do the same, you will collectively achieve more, communicate more effectively, and maintain motivation.

Transformational leaders are constantly enhancing their leadership style

Transformational leadership is gaining traction as the way we do business changes rapidly. New technologies and shifting workplace norms disrupt markets, products, and sales strategies.

Consequently, leaders increasingly turn to transformational leadership to navigate these changes effectively.

Start by strengthening your team management skills with our Team Tactics Deck, or create actionable group goals with our Strategy Tactics Deck.

Pip Decks

Transformational leadership: how it's different and why it works

What is transformational leadership?

Defining transformational leadership

4 components of transformational leadership