Transformational Leadership

What Is Transformational Leadership, and How Do You Apply It to Your Company?

An effective leader must be adept in many fields, including project management, performance monitoring, and coaching. However, even if you’ve mastered the necessary skills in these areas, you still cannot consider yourself a transformational leader.

Over the years, the transformational leadership style has changed the digital landscape for the better. Managers who use this method build an engaged workforce that’s motivated to innovate and work towards the success of their organization. Anyone in a leadership position would want to achieve the same for their company. So, in this post, we’re going to discuss the transformational leadership theory. We’ll also share some real-life examples that will inspire you to apply the same method to your management style.

What Is Transformational Leadership?

Transformational leadership is a management style in which a person encourages, motivates, and inspires their subordinates to grow, innovate, and create change. They set an example at the executive level by creating a strong sense of accountability, independence, and corporate culture in the workplace. While transformational leadership is commonly used in tech companies, it is also applicable in other fields. For instance, a Walden University study revealed that this management technique also helps create a pleasant and uplifting atmosphere for healthcare workers. Leaders fulfill their psychological needs for autonomy, competence, and relatedness—qualities that enable them to excel in their occupations.

Another great quality of transformational leaders is their ability to motivate and inspire their workforce without micromanaging. Because they encourage accountability, they have faith that their employees can make sound decisions. Under this leadership style, staff members are given more room to be innovative. They are encouraged to look to the future and find out-of-the-box solutions to old problems. Mentor-mentee training programs can also prepare entry- and mid-level employees to become transformational leaders one day.

How to Apply the Transformational Leadership Style to Your Company

Transformational Leadership Style

James MacGregor Burns, a management expert and presidential biographer, was credited for coining the term ‘transformational leadership’ in 1978. According to Burns, implementing this management style requires adopting the following distinct behaviors: Individualized Consideration, Inspirational Motivation, Intellectual Stimulation, and Idealized Influence.

Individualized Consideration

The golden rule encourages us to treat others the way we want to be treated. This is a principle that is correct on many levels. However, when it comes to transformational leadership, you need to look at the golden rule from a different angle. You must treat your employees the way they want to be treated. Keep in mind that what motivates and inspires one person may not be the same for another.

As a leader, you must consider each subordinate’s needs, acting as a coach or mentor to them. You need to listen to their concerns and keep your communication lines open. Transformational leaders also provide support and empathy while celebrating the individual contributions of staff members.

Inspirational Motivation

This characteristic requires a leader to determine where they want their team to go. With this in mind, they must create a strategy to get to their goal. With passion and optimism, the leader must articulate their vision, explaining how it plays out in the big picture. It’s important to explain and justify the motives behind your decisions to your subordinates. With open communication, along the process, you will start to understand your employees and what motivates them.

To put that into context, let’s look at this situation. A man came across two people digging a ditch. He asked one of them, “What are you doing?” The person answered, “What does it look like I’m doing? I’m digging a ditch!” Then, he asked the other person the same question, to which he responded, “I’m building a school.”

As a leader, you need to get into the minds of your subordinates. Let them understand the purpose behind their duties and tasks—that they are part of something bigger. They aren’t simply writing code or filling in forms. Instead, they are playing an important role in making a positive change in the industry.

Intellectual Stimulation

Intellectual Stimulation

Transformational leaders rock the boat and ask questions to challenge the status quo. They take bold risks because they have a growth mindset and are not afraid of failure. Make sure you create a work environment where employees feel safe to have conversations. Foster an atmosphere where everyone can voice their ideas and be creative. Challenge the norms in the workplace and inspire passion among your employees. You must turn “me” moments into “we” moments.

Indeed, the command-and-control leadership style will let you accomplish a lot of things. However, all your achievements will be short-lived. That method won’t help you maintain long-term success. So, instead, you should guide your team and let them solve problems on their own.

Idealized Influence

Burns said, “Divorced from ethics, leadership is reduced to management and politics to mere technique.” Clearly, when you aim for transformational leadership, you need to be a mentor of sorts. You must make decisions that work toward the greater good. You must lead by example and become a role model for your employees. If you want to drive a sustainable change, you need to implement values-based leadership.

How Is Transformational Leadership Different from Transactional Leadership?

Many managers choose transactional leadership because it gives immediate and safe results. Now, you might wonder how it is different from transformational leadership. Well, it relies on motivating people through rewards and punishments. It requires performance monitoring, supervision, organization, and oversight. What’s more, it plays by the rule book and doesn’t have much room for innovation. After all, it is rooted in making consistent decisions based on predictable results. Overall, the goal of this method is to establish effective routine procedures.

Transactional leadership is ideal for companies or departments that thrive in structure and routine. It is applicable to businesses wherein reducing inefficiency or chaos is critical. However, do note that it does not allow for creative and innovative planning. Transformational leadership is more applicable in agile work environments—especially those that have room for low-risk failures. Transactional leadership promotes consistent development processes, while transformational leadership allows employees to innovate and look at how they can shape the future.

Transactional and Transformational leadership

Popular Examples of the Transformational Leadership Style

An article featured in Harvard Business Review evaluated Fortune Global 500 and S&P companies to determine the best examples of transformational leaders. You might want to follow the footsteps of these people if you want to adopt this management style:

Steve Jobs and Tim Cook – Apple

Apple is the epitome of ‘dual transformation’. Jobs studied the original Microsoft products and innovated on them while building his own software ecosystem. Meanwhile, Cook worked on Jobs’ vision while focusing on innovation and brand loyalty.

Jeff Bezos – Amazon

What made Bezos a great transformational leader is his ‘insider, outsider’ status. He was someone who came from the finance world and used his experience to bring a fresh perspective to the e-commerce industry.

Reed Hastings – Netflix

Like Bezos, Hastings ventured into a different industry. His background was in software development when he brought innovation to the television and movie realm.

Jeff Boyd and Glenn Fogel – Priceline

Boyd and Fogel transformed the travel booking landscape by charging lower commission fees. They focused on niche markets like apartments, inns, and B&Bs, which eventually launched

Heinrich Hiesinger – ThyssenKrupp

When Hiesinger became the CEO of ThyssenKrupp in 2011, he deviated from the saturated steel market and embraced innovative forms of manufacturing, including 3D printing. Today, the ‘new growth areas’ that Hiesinger explored are making about 47% of the company’s sales.

Traqq – The Project Management Tool that Works for any Leadership Style

Whether you’re a transactional or a transformational leader, you’ll need all the tools to ensure that your employees are working efficiently. Traqq is one of the best tools that can help you in this area. If you prefer transactional leadership, using Traqq as your time tracker will help you monitor your team’s productivity. You can use this tool to generate reports on your staff members' day-to-day activity levels.

Traqq - time tracker

Now, if you’re a transformational leader, you can still use Traqq for your team. This app is especially useful for people who manage geographically scattered employees. With this leadership style, you’d want to give your workers room to be creative. Now, how can they innovate if they spend so much time on admin tasks like manual timesheets, productivity reports, and invoices? Well, Traqq takes all these off your employees’ shoulders. All they need to do is switch on the tracker and it will capture billable hours. With a few clicks, you can generate reports that will make invoicing easier. The best part is, you can download Traqq and access all its features for free!


There’s nothing wrong with using transactional leadership, especially if it is what works for your organization. However, if your line of business requires you to ‘change or die,’ you may want to consider becoming a transformational leader instead. It’s what will help you drive your employees towards creativity and innovation.

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