When it comes to effectively driving and implementing positive, long-lasting change in any environment, there’s one component consistently at the crux: effective leadership.

But what actually makes a good leader? And what role does the transformational leadership approach play?

As businesses race to keep up with an evolving global landscape, many traditional leadership styles fall short of addressing inevitable challenges and complexities. A survey by Gallup found that ‘few managers have the talent to achieve great excellence,’ costing companies billions of dollars each year.

Undeniably, effective leadership is a fine art that goes well beyond allocating resources and responsibilities; it demands engaging and inspiring team members to action and empowering them with the confidence and skill set to succeed.

Transformational leadership – with its focus on fostering morale, motivation and evolving ‘followers’ into leaders themselves – stands out as a compelling and highly coveted approach for ambitious organisations striving for greater levels of innovation in an unprecedented business landscape.

But what exactly is transformational leadership and how can you apply it within your organisation?

Below, we discuss the four components of transformational leadership, the pros and cons of the model, the characteristics of a transformational leader, and a potential pathway to becoming one.

What is transformational leadership?

The concept of transformational leadership was first introduced by sociologist James V. Downton in 1973 and expanded on by political scientist and leadership expert James MacGregor Burns in 1978. Burns described transformational leadership as a process ‘in which leaders and followers help each other advance to a higher level of morale and motivation’.

Transformational leaders establish trust to engage and inspire their followers and effectively ‘transform’ team members into leaders who proactively look out for each other and the organisation as a whole. They also have specific traits, tending to be charismatic, energetic, passionate and considerate to foster an open, communicative and empowering culture.

It’s about inspiring, rather than enforcing, change. Burns contrasted transformational leadership with transactional leadership, which focuses on a more one-way exchange between leaders and followers to complete routine performance goals. In a modern corporate setting, transactional leadership can result in less ‘buy-in’ – thus less engagement and productivity – from team members.

In the 1980s, a scholar named Bernard M. Bass further expanded the concept of transformational leadership by introducing strategies to measure and rank its impact in practical settings. He also defined four key elements of transformational leadership, known as the ‘Four I’s’, which are still used to differentiate transformational leadership from other approaches to this day.

4 components of transformational leadership

Bass’s development of ‘Transformational Leadership Theory’ made the approach more applicable and measurable in organisational settings. He introduced the Multifactor Leadership Questionnaire (MLQ) as a method of evaluating its effectiveness and the four key components that set this leadership style apart from its theoretical counterparts.

In Bass’s view, these four elements were pivotal for a leader who wanted to implement the transformational model to engage, inspire and develop their employees. And his view has held true today.

The four components of transformational leadership are as follows.

Idealised influence

Idealised influence is the term for leaders acting as role models, earning the trust and admiration of their employees by leading by example with charisma.

Establishing a clear vision, high ethical standards and acting with integrity are key here, as team members are then inspired to emulate their values and behaviour. By ‘walking the walk’, leaders establish a strong foundation of credibility and respect that team members also want to exemplify.

Intellectual stimulation

Intellectual stimulation is the element of cultivating creativity, innovation and critical thinking to challenge conventional concepts. It’s about encouraging exploration and new solutions to (often familiar) problems.

Crucially, transformational leaders foster an environment where questioning the status quo is not only welcomed but encouraged and diverse perspectives are non-negotiable. This component is key in driving continuous innovation and adaptive thinking within an organisation.

Inspirational motivation

Inspirational motivation is about creating a compelling vision for the future and communicating it in a way that team members are completely bought into – and self-motivated to achieve.

The ability to articulate a vision with conviction, enthusiasm, inclusivity and optimism is critical to securing support from employees and creating a sense of purpose, personal responsibility and direction. Setting high expectations and encouraging ambition is also crucial here to ensure the organisation is moving forward with a shared commitment from its employees.

Individualised consideration

Individualised consideration involves the recognition of the unique strengths, needs and aspirations of each team member – and the implementation of strategies to support them. Mentorship and empathy are major components of transformational leadership; ensuring that employees feel valued and understood leads to higher levels of loyalty, personal development and wider business progress.

This component of transformational leadership is about nurturing team members’ strengths and skills, acknowledging that higher-performing individuals result in a higher-performing team and organisation on the whole.

Transformational leadership: Pros and cons

While transformational leadership has a number of benefits to organisations looking to bolster motivation and innovation, like any leadership model, it also comes with potential pitfalls.

Understanding the positives and negatives of this approach can help current and aspiring leaders make informed, strategic decisions. Here are the pros and cons of transformational leadership.

Pros:

• Increased motivation: The strong focus on inspiring employees to action and empowering them to take it with confidence drives a high level of motivation amongst employees, ultimately leading to increased productivity.
• Enhanced creativity: The ‘intellectual stimulation’ component of transformational leadership, combined with the model’s emphasis on open communication that challenges the status quo, drives higher levels of creativity and innovative thinking within organisations. With more competition than ever flooding the market, innovation is key to long-term organisational success.
• Stronger relationships: Strong relationships between employees and leaders are foundational to effective transformational leadership. Data consistently shows that leaders who prioritise healthy work relationships achieve better business outcomes.
• Improved employee engagement: Cultivating a strong sense of employee buy-in to an organisation’s mission is integral to transformational leadership. By evolving team members into leaders themselves, businesses are driving high levels of employee engagement – which boosts productivity and overall work performance.

Cons:

• Potentially disruptive: The strong focus on progress and innovation may feel disruptive to certain employees, especially those with a natural resistance to change who may have been at the organisation for a long period of time. Organisations can mitigate this by providing longer notice of upcoming changes and mapping out future strategies to help team members establish a greater sense of ease and control.
• Risk of burnout: The emphasis on constant improvement and high expectations on team members can increase the risk of burnout, which is a major issue facing the modern workforce. Transformational leaders can manage this by emphasising the importance of work-life balance when it comes to achieving goals and exemplifying a healthy work-life balance themselves.
• Dependency on leader: In some cases, team members with an exacerbated idealisation of their leader can become overly reliant on them for direction and motivation. It’s important for transformational leaders to cultivate a strong sense of initiative, empowerment and self-motivation within their team.
• Requires continuous communication: Effective transformational leadership hinges on strong and constant communication, which can be difficult for managers juggling multiple responsibilities. A forward-thinking approach to your team’s work style and communication needs is key to managing this smoothly.

What are the characteristics of a transformational leader?

There are a number of traits that effective transformational leaders possess. These characteristics include, but aren’t limited to:

• Self-aware: Understanding their own strengths and weaknesses and reflecting on how they impact both the team and wider business goals.
• Charismatic: Possessing a certain charm or ‘magnetic’ appeal that inspires and attracts employees to action.
• Adaptable: Being able to foresee and be flexible to changing circumstances and strategies with ease.
• Proactive: Anticipating both challenges and opportunities within the wider business landscape and acting on them accordingly.
• Emotionally intelligent: Reading the needs of employees and the team as a whole to ensure they feel engaged, valued and inspired. 
• Active listener: The ability to make employees feel truly heard and implement strategies where relevant to ensure team members are motivated to act as leaders.
• Risk-taker: A willingness to take calculated risks where necessary to achieve innovative outcomes.
• Energetic: Embodying and exemplifying the passion, optimism and drive for team members to emulate.
• Visionary: Having and holding a clear and compelling vision for the organisation to work towards.

A degree designed for leaders

When it comes to effectively driving and implementing positive, long-lasting change in any environment, forward-thinking leadership expertise is key. Transformational leadership isn’t just about innate qualities but continuous learning and improvement – which is exactly what Deakin’s innovative and first-of-a-kind online Master of Leadership is built upon.

The 100% online degree is designed to equip ambitious leaders with the skills and expertise needed to reach their leadership potential. Whether you’re an experienced leader looking to take your expertise to the next level or a future leader looking to secure your trajectory, Deakin University provides the flexibility to study while you work. So you can have the freedom to become – and be recognised for – the leader you truly are.

Build on your existing skills and have your leadership skills formally recognised with Deakin’s 100% online Master of Leadership. Learn more on our website or get in touch today.