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Transformational Leadership in the 21st Century

Updated on December 31, 2014
Vermont in May
Vermont in May | Source

Transformational Leadership Leverages Meaningful Work:

The term transformational leadership was first coined by Downton in 1979 and describes the connection, relationship, or influence between the leader and their direct reports. Transformational leaders incorporate inspiration, enthusiasm, and motivational support to encourage team members to see the importance and meaning of the work at hand and to rise up to meet the demands of the organization. Transformational leaders are aware of the overall performance of the whole team but are also focused on encouraging each person to fulfill his or her full potential. Leaders demonstrating transformational leadership usually have high ethical and moral values. Therefore, transformational leadership goes beyond meeting the basic needs of subordinates or direct report; it takes the relationship between the leader and the followers to a higher level. A joint purpose or common goal results and, as such, transformational leaders create, change, and improve the culture within the organization and, ultimately, heighten the performance of all participants – from the leader, him / herself, to the followers.

Transformational Leadership Effectiveness:

There are 135,000,000 hits on the search term, definition of leadership. This is because the basic term or definition leadership implies a range of possible meanings and, consequently, a universal definition for the term leadership effectiveness is equally vague and difficult to define. Academic leaders have stated that the size and complexity of the organization, individual leadership style, and the informal relationships between the leader and followers can impact the transformational leadership effectiveness of a leader.

It has been proposed that effective transformational leadership is to some extent related to how the leader is perceived by the followers. A successful and effective transformational leader is an individual, who seeks better ways to be more effective, is continuously improvement-driven, is not concerned with admitting ignorance or weakness, and is good at negotiating and delegating. Therefore, transformational leadership and leadership effectiveness is better appreciated when examined through the lens of the interpersonal interactions between the leader and the followers.

A Storm Brewing
A Storm Brewing | Source

Commitment and Allegiance to the Organization:

Transformational leadership theory centers on the leader’s attempt to establish commitment and allegiance of the followers to the organization. Transformational leadership is the method of inspiring followers to achieve higher levels of ideals, ethical, and moral behavior by placing the organization’s goals before one’s own personal gain which is referred to in the academic world as idealized influence. Transformational leadership has also been depicted as a leader’s efforts to transform and motivate followers by stressing the value of various tasks and the associated outcomes of those tasks, surpassing their own needs in favor of the organizational agenda that has been set by the leader, and triggering their higher order needs. In this manner, individuals forgo their own personal agendas to support the needs of the organization once they are able to identify with the outlined vision of the future and are able to invoke creativity in the process by taking prudent risks. Individuals that are transformational leaders are often regarded as coacesh, teachers, and/or mentors because they provide individualized attention to each follower’s needs. In transformational leadership, importance is placed on the leader motivating and energizing the follower to be more dedicated and devoted to the organization, building and creating confidence among followers, and empowering follower(s) to own the organization’s agenda..

Examples of Transformational Leaders

Alexander the Great

Mahatma Gandhi

Martin Luther King, Jr.


Bill Clinton

Steve Jobs

Transformational Leaders are Change Agents:

Effective transformational leaders possess specific behavioral attributes, such as being change agents, prudent risk takers, believing and trusting in people and being compassionate and sensitive to others’ needs, expressing a set of core values that direct behavior, being flexible and adaptable and open to continuous improvement through learning opportunities, having cognitive skills and regimented critical thinking, confidence, and conviction in their intuition. It has been written in the academic literature that leaders can impact the culture of the organization includes the way in which leaders attend to details involving their followers; how they respond to urgent situations; how they divide and allocate resources and rewards; what behaviors they demonstrate and model for others; and how they recruit, hire, promote, train and cultivate organizational members. Some of the ways that leaders express their values, standards, and attitudes are deliberate efforts to communicate priorities, goals, and objectives. Transformational leadership endorses the value of leadership skills and abilities of all individuals throughout all levels of an organization, and has as its foundation that every employee using the same values and beliefs brings about positive successful organizational change. Transformational leaders encourage and inspire around the leadership behaviors of collaboration, team effort, cooperation, individual learning, engagement, and enthusiastic participation by all. Transformational leadership behaviors create an organizational culture which results in increased production or performance, an improvement in quality, a heightened individual effort, and positive customer and employee satisfaction.

Transformational Leadership Impacts Organizational Performance:

Leadership that is transformational can result in significant alterations in individuals, the corporations in which they are employed, and society as a whole. Leadership that is transformational could have an impact on overall organizational performance. According to the research literature on the topic, transformational leadership has been strongly associated with a positive job characteristics including: employee job satisfaction, organizational commitment, organizational effectiveness, and employee productivity. Therefore, with this level of positive impact on organizational goals, the question on whether or not transformation leadership could be documented to have a positive financial impact for an organization was questioned. In the literature it has been stated that leadership that is transformational can positively impact an organization financially. They estimated that the financial impact of transformational leadership to be approximately “25 million dollars (after taxes) throughout an executive’s average career span” (Barrick, Day, and Alexander, p. 19). Maister (2001) and Kotter and Heskett (1992) also stated that leadership from individuals working within organizations has a positive impact on the organization’s financial performance. Maister (2001) made a further intuitive insinuation that an organization’s bottom line could be improved by the quality and level of the customer relationships established and that customer relationships and quality are driven by creatively inspired and motivated employees who are satisfied, content, and fulfilled in their current job. Therefore it seems appropriate that an employee’s job satisfaction would positively impacted by the values and standards of the organization, the training and coaching, and elements of empowerment. High standards, coaching, and empowerment are major elements of transformational leadership.


As a consequence of the positive return on investment for organizations with strong transformational leadership, it makes sense for organizations to train employees on transformational leadership throughout all ranks within an organization. The power of transformational leadership is that the core concepts can be learned and applied by everyone


Barrick, M., Day, D., Lord, R., & Alexander, R. (1991). Assessing the utility of executiveleadership. Leadership Quarterly, 2(1), 9-22.

Kotter, J., & Heskett, J. (1992). Corporate cultures and performance. New York, NY: The Free Press.

Maister, D. (2001). Practice what you preach: What managers must do to create a high performance culture. New York: Free Press.

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