Great leadership isn’t one-size-fits-all. There are many different leadership styles that can be used to lead a company, team, or even a project.

One that gets a lot of attention is transformational leadership (sometimes referred to as transformative leadership). But what is transformational leadership? How can it benefit your organization and how can you embody its characteristics? Here’s what you need to know. 

Transformational leadership theory

The transformational leadership theory describes a leadership style that’s about change within a team, organization, or project. A transformational leader will collaborate closely with employees to identify areas where improvement is needed and support them in making necessary changes. 

That’s where the name comes from — transformational leaders want to transform their companies, teams, or projects for the better. 

Imagine that a new leader takes over a customer support team. A transformational leader wouldn’t want to keep existing systems running at the status quo. Instead, they would want to understand the current process so they can change or refine it to shorten response times and boost customer satisfaction. 

Transformational Leadership vs. Other Leadership Style

Transformational leadership is one of many styles that leaders can adopt. Its focus on inspiring change and fostering individual growth sets it apart from others. In understanding the transformational leadership style, it’s helpful to start with a comparison of transformational leadership and other leadership styles: autocratic, democratic, and laissez-faire leadership.

Autocratic leaders make decisions without much input from their team members. They provide clear directions and expect compliance. In contrast, transformational leaders encourage input from all team members, fostering a collaborative environment. They inspire team members to exceed their own individual goals for the collective good of the team

Democratic leaders, similar to transformational leaders, involve their team members in decision-making processes, promoting a sense of fairness and equality. However, while democratic leaders focus on consensus, transformational leaders inspire and motivate their team towards a shared vision, encouraging individual growth and innovative thinking.

Laissez-faire leaders take a hands-off approach, giving their team members a high degree of autonomy. While transformational leaders also empower their team members, they actively engage in mentoring and inspiring their teams towards a shared vision, creating a supportive environment for growth and innovation.

While each leadership style has its strengths and is suited to specific contexts, transformational leadership stands out for its ability to inspire change, foster innovation, and promote individual growth. This style can be particularly effective in dynamic and fast-paced environments where adaptability and continuous improvement are key.

Origins of transformational leadership

There are plenty of modern examples of transformational leaders (which we’ll get to a little later). However, the concept of transformational leadership has some pretty deep roots. 

Transformative leadership was first coined by psychologist James V. Downton in 1973. That concept was expanded on by James MacGregor Burns, a historian and political scientist who observed the leadership styles of different political figures. He wrote a book in the late 1970s that identified two distinct leadership approaches:

  • Transactional leadership: A structured leadership style that uses directions, rewards, and penalties
  • Transformational leadership: A leadership style that emphasizes autonomy, innovation, and finding better ways to get things done 

Bernard Bass, an expert in organizational behavior and leadership, then built on Burns’ original concept to develop what’s now often referred to as Bass’ Transformational Leadership Theory

The transformational leadership characteristics

Bass identified four main components of transformational leadership, which are referred to as the “four I’s.” These include: 

  • Idealized influence: The leader is a positive role model for their team
  • Inspirational motivation: The leader rallies the team around their vision
  • Individualized consideration: The leader serves as a coach or mentor to employees
  • Intellectual stimulation: The leader prioritizes creativity, innovation, and out-of-the-box thinking 

But what do those academic concepts look like in the real world? Let’s break down some characteristics of transformational leadership. Transformational leaders are:

  • Visionary: Because this leadership approach is all about change and improvement, transformational leaders aren’t focused on the here and now. They have a clear vision for where they see their team or organization going. 
  • Empowering: Inspiration is a word you’ll see come up a lot with transformational leadership. These leaders aren’t micromanagers. They motivate employees. They’re skilled at uniting people around their vision, inspiring them to do their best work, and then trusting them to fulfill their responsibilities. 
  • Restless: Transformational leaders believe there’s always room for improvement, and they want to be constantly iterating and growing. They aren’t content to stick with what’s comfortable, which makes them a little restless.
  • Risk-takers: These leaders encourage taking risks. While transformational leaders believe in being smart and strategic, they aren’t afraid to try something new. They recognize that those leaps are exactly what leads to growth. 
  • Flexible: Not every risk has a huge payoff, and transformational leaders can roll with the punches. They try new approaches and then adapt accordingly. 
  • Decisive: Change involves tough choices, and transformational leaders can be decisive when the time comes — whether it’s shifting priorities, restructuring teams, or juggling project resources.
  • Goal-oriented: Transformational leaders are highly ambitious. As much as they like to accomplish goals themselves, they also like to help other people be achievers. They know that when they develop talent on their team, it benefits the entire organization. 
  • Open-minded: Change shouldn’t just come from the top. Transformational leaders like to hear ideas from everywhere and work collaboratively with all team members to pick the best route for improvement. 

There are many well-known leaders who fit this description. A few examples of transformational leaders include: 

  • Nelson Mandela, former President of South Africa
  • Jeff Bezos, Founder of Amazon
  • Steve Jobs, Co-founder of Apple
  • Meg Whitman, former CEO of Hewlett Packard
  • Reed Hastings, Founder of Netflix
  • Oprah Winfrey, Media Personality and CEO of Harpo Productions
  • John D. Rockefeller, Founder of Standard Oil 

Effectiveness of transformational leadership

Wondering if transformational leadership actually works? Transformational leadership is a highly effective approach and has been linked to the following benefits: 

Increased innovation and creativity: Transformational leaders welcome ideas and suggestions from everybody, which means fostering a high degree of psychological safety on their team. This collaborative atmosphere and a high degree of trust lead to more innovation and creative thinking. 

Higher team morale: When working under a transformational leader, everybody feels included, heard, and valued. This boosts morale and even team performance. One Salesforce study found that employees who feel heard are more than four times more motivated to do their best work. 

Better organizational performance: Because transformational leaders are focused on improvement, they positively contribute to the growth and performance of the entire company. Studies have shown a strong relationship between transformational leadership and organizational performance. 

Challenges of Adopting Transformational Leadership

This leadership approach has plenty of distinct advantages. But, like any management or leadership style, it’s not without its faults. Transformational leadership can come with a number of challenges, including:

  • In organizations that emphasize existing processes, the drive for change can be met with resistance
  • The constant emphasis on change and improvement can be motivating, but it can also lead to burnout if leaders don’t carefully manage expectations and responsibilities
  • Transformational leaders can get so focused on growth that they neglect to consider real-world limitations or constraints 

The benefits of transformational leadership far outweigh the drawbacks. But it’s important to be aware of the potential pitfalls of this approach so you can effectively navigate around them.

The Impact of transformational leadership on team dynamics

Transformational leadership plays a pivotal role in shaping team dynamics, fostering an environment that promotes collaboration, innovation, and shared responsibility. This leadership style, characterized by its focus on change and improvement, significantly influences the way team members interact, communicate, and work together.

Transformational leaders inspire their teams with a compelling vision for the future, motivating individuals to go beyond their self-interest for the good of the team. This shared sense of purpose can strengthen team cohesion, leading to improved cooperation and collective problem-solving.

Furthermore, transformational leaders value each team member's unique ideas and perspectives. They create a safe space for open dialogue, encouraging team members to voice their thoughts and suggestions. This inclusivity boosts team members' confidence and promotes a culture of mutual respect and trust.

By challenging team members to think creatively and take calculated risks, transformational leaders foster a culture of innovation. They stimulate intellectual curiosity and encourage continuous learning, which can lead to breakthrough ideas and solutions.

Importantly, transformational leaders offer individualized support and mentoring. They recognize each team member's strengths and potential, providing personalized coaching to help them grow and excel in their roles. This individual attention can enhance job satisfaction and foster a sense of belonging, further boosting team morale and productivity.

In essence, transformational leadership can significantly enhance team dynamics, creating a motivated, collaborative, and high-performing team that is ready to navigate the complexities and challenges of the modern business environment.

How to become a transformational leader 

Think a transformational leadership style sounds like the right fit for you and your team? Here are a few tips to help you figure out how to be a transformational leader — whether you’re leading an entire team or a single project. 

1. Understand your vision for the future

Transformational leaders have a strong vision for the future, and that’s the first step in modeling this leadership style: You need to know where you want your team to go. What’s your goal? Where are you headed? 

Keep in mind that the leader’s vision should support the organization's broader long-term goals, so it’s important to understand the company’s objectives first. Unfortunately, research shows that only 28% of managers responsible for executing strategy could list three of their company’s strategic priorities.  

Make sure that you connect with other leaders to grasp those objectives and then connect those to what your team is focused on. That gives the necessary context and also helps your team feel more motivated to pursue those goals. 

2. Regularly evaluate your processes and workflows

Transformational leadership is about improvement, which means you can never get too comfortable with the way things work right now.

Keep a close eye on your team's processes and workflows to find sticking points and things that aren’t working as well as they should be. Your project wrap-up conversations are also a good opportunity to figure out how you can streamline the work you do.

When 51% of employees say dated business processes prevent them from doing their jobs effectively, you must monitor not only what’s getting done but how it’s getting done.

3. Regularly solicit feedback

Your employees or project team members are the ones who are in the trenches and have insight into what’s working and what isn’t. You should be asking for their opinions and insights about what’s going well and what needs to change. 

Whether it’s part of your regular team meetings or project kickoffs, or a more formalized process or conversation, ensure you’re offering plenty of opportunities for employees to chime in with their suggestions and feedback. 

When you have their contributions, make sure you seriously consider them and act on them when appropriate. 82% of employees say they have ideas to make their company better, yet 34% say their company doesn’t value those ideas. Remember, when you turn their suggestions into action, that’s when true transformation happens. 

4. Provide support and encouragement

Change and growth are good things, but they can also be uncomfortable and intimidating. This is where the inspiration and empowerment pieces of transformational leadership come into play. 

While this type of leader is responsible for clarifying the vision, they also need to support, encourage, and coach employees as they pursue that goal. They’ll provide advice, mentorship, recognition, praise, and feedback and will be in their team members’ corners, helping them achieve more than they even thought was possible. 

Is transformational leadership the right choice for you? 

When it comes to pursuing a goal, managing change, and developing talent, transformational leadership is unmatched in its ability to empower people to do their very best work.

But, that doesn’t mean it should always be the default choice for every team or project. For example, a project that has a lot of rigid processes or compliance requirements probably wouldn’t benefit from the out-of-the-box thinking of transformational leadership.

That’s where situational leadership comes into play — it gives leaders the flexibility to adjust and adapt their style to deliver what the situation requires. 

Regardless of which leadership style becomes your tried and true, factors like centralized communication, transparency, and accountability are important for running an effective team. Wrike can help you do that. Try it for free now.