The true basis of leadership was built upon a model that generated two sides of an X and Y axis. On one side is the concept of leadership that creates change through taking a process-oriented approach, and the other as more of a relationship-oriented approach. While Alice Eagly and Linda Carli argue that transactional leadership involves determining the tasks, rewarding goal achievement, and punishing failure in attaining goals, Gary Yukl and David Van Fleet say that transformational leadership focuses on the critical human assets such as commitment and thus helps followers to effectively implement organizational changes with both efficiency and effectiveness. Just as leaders need to be both autocratic and democratic at times, they also need to be both transactional and transformational at times also. Transformational leadership has been defined, by Gary Yukl and David Van Fleet, as a “process of influencing major changes in the attitudes and assumptions of organization members (organization culture) and building commitment for major changes in the organization’s objectives and strategies”.
One example of transformational leaders in a highly competitive environment is Steve Jobs, former CEO of Apple, who built a highly effective organization through taking a change-oriented leadership approach, which highly manifested itself in talent, product development, organizational structure, and intense marketing. The evidence from these examples suggests that transformational leadership is highly demanding at the corporate level. For organizations to achieve a sustained change and eventually a higher degree of efficiency and effectiveness, selecting a CEO acting as a transformational leader is the key to success. In the absence of transformational leadership, organizations lose their required direction to achieve a high degree of hyper-competitiveness, and cannot implement successful change in order to adapt with today’s global business environment.
Executives recognize the importance of transformational leadership. In an effort to grasp the knowledge of executives worldwide, AESC surveyed business leaders to identify the current and new challenges by 2025. The results highlighted the significant role of leadership for organizations and confirmed that business leaders identified leadership development as one of the main areas for using an outside consultant. Martin Schubert, a partner at Eric Salmon & Partners states that companies “in technology, in industry, in financial services, even in consumer goods and life sciences, experiencing a change in their business models that are much more global, much more virtual, with diminishing hierarchies that require a different leadership type. And this drives both leadership advisory and executive search.” In light of the increased pressures of the global workplace that inspires leaders to drive effective change at the organizational level, opportunities for transformational leadership consulting grow as organizations are increasingly participating in international markets. For example, Dorota Czarnota, a Country Manager at Russell Reynolds Associates, sees high potential for growing transformational leadership consulting in Latin America, Europe, Asia and Africa.
James MacGregor Burns found that executives can be made into leaders and leaders can become better at what they do by using the four techniques of transformational leadership. These four techniques include: idealized influence, individualized consideration, intellectual stimulation, and inspirational motivation. In doing idealized influence, executives need to take the following actions:
- Instill pride in organizational members for being associated with them.
- Display a sense of power and confidence.
- Go beyond self-interest for the good of the organization.
- Talk about their most important values and beliefs.
- Consider the moral and ethical consequences of decisions.
- Emphasize the importance of having a collective sense of mission.
In doing individualized consideration, executives need to take the following actions:
- Spend time coaching others.
- Consider employees as having different needs, abilities, and aspirations from others.
- Help organizational members to develop their strengths, and provide various formal training programs to improve the performance of duties
In doing intellectual stimulation, executives need to take the following actions:
- Emphasis on the effective coordination among different functional areas, and seek differing perspectives when solving problems.
- Suggest new ways of looking at how to complete assignments, and undertake a comprehensive analysis when confront with an important decision.
In doing inspirational motivation, executives need to take the following actions:
- Talk optimistically about the future
- Talk enthusiastically about what needs to be accomplished.
- Express confidence that the goals will be achieved.
The key take-away for executives and change practitioners across the globe is that transformational leadership has increasingly become one of the most dominant paradigms today and will be used by many companies around the globe in the next five years.
AESC (2020), The Future of Executive Search and Leadership Consulting, Executive Talent, 17, 4-15.
Burns, J.M. (1978). Leadership, Harper & Row, New York.
Eagly, A.H., & Carli, L.L. (2003). The female leadership advantage: An evaluation of the evidence. The Leadership Quarterly, vol. 14, no. 6, pp. 807-834.
Yukl, G & Van Fleet, DD (1992) Theory and research on leadership in organizations. In Dunnette MD & Hough LM (eds), Handbook of Industrial and Organizational Psychology, vol. 3, pp. 147-197, Consulting Psychologists Press, Palo Alto, CA.