What is transformational leadership? A model for motivating innovation

What is transformational leadership?

Transformational leadership is a leadership style that aims to encourage, inspire, and motivate employees to innovate and create the change necessary to shape the future success of the company. Underpinning the approach is an emphasis on setting an example at the executive level through authenticity, developing a strong sense of corporate culture, and fostering employee ownership and independence in the workplace. Transformational leaders are change agents in the business, who can identify innovative and shifting trends in technology, and then help the organization embrace that change.

Transformational leaders inspire and motivate their workforce without micromanaging — they trust trained employees to take authority over decisions in their assigned jobs. It’s a management style that’s designed to give employees more room to be creative, look to the future, and find new solutions to old problems. Employees on the leadership track will also be prepared to become transformational leaders themselves through mentorship and training.

Transformational leadership theory

The concept of transformational leadership started with James V. Downton in 1973 and was expanded by James Burns in 1978. In 1985, researcher Bernard M. Bass further expanded the concept to include ways for measuring the success of transformational leadership. This model encourages leaders to demonstrate authentic, strong leadership with the idea that employees will be inspired to follow suit.

While Bass’ transformational leadership theory dates to the 1970s, it’s still an effective leadership model practiced today — this style of authentic leadership never changes, just the environments it’s used in. It’s applicable across every industry, but it’s especially vital to the fast-paced tech industry where innovation and agility can make or break a company.

In 2006, Bass and Ronald Riggio, a leadership scholar and organizational psychologist, further refined the model, formalizing the Multifactor Leadership Questionnaire (MLQ) as its primary measurement tool, which became standard in the industry to measure a broad spectrum of leadership behaviors.

Transformational leadership model

Four main elements define the transformational leadership model and style. These factors were developed by Bass in 1985 to help define what transformational leadership looks like and how to be successful as this type of leader:

  • Idealized influence: The most important thing you can do as a transformational leader is to lead by example. Employees will look to you as a role model for behavior in all areas of the workplace. If you lead with authenticity, employees will pick up on that behavior and feel inspired to maintain that high standard for performance. It’s not about manipulating employees into working hard; it’s about leading by example and positively influencing others through a commitment to trust, transparency, and respect.
  • Intellectual stimulation: To help create change, it’s important to challenge long-standing beliefs in the company and push the status quo by encouraging innovation, creativity, critical thinking, and problem-solving. Transformative leaders should help employees feel comfortable exploring new ideas and opportunities that can inject innovation into the organization. You want to establish an environment that welcomes growth and gets everyone excited about digital transformation and other important initiatives in the organization.
  • Inspirational motivation: As a transformational leader, you will need to encourage your team to feel attached and committed to the vision of the organization. You want to ensure employees feel as committed to these goals as you do as a leader by giving employees a strong sense purpose, rather than attempting to motivate them through fear.
  • Individual consideration: Employees need to feel a sense of independence and ownership in the overall business goals. As a transformational leader, it’s important to understand every employee is a unique person within the company and will have specific needs, mentorship styles, and their own contributions to the company. These leaders will tailor their coaching and mentorship styles to the employee and help them reach goals both inside and outside of the organization.

Transformational leadership characteristics

According to Bass’ model, transformational leaders set themselves apart from other types of leaders by doing the following:

  • Encouraging the motivation and positive development of followers
  • Exemplifying moral standards within the organization and encouraging the same of others
  • Fostering an ethical work environment with clear values, priorities, and standards
  • Building company culture by encouraging employees to move from an attitude of self-interest to a mindset where they are working for the common good
  • Holding an emphasis on authenticity, cooperation, and open communication
  • Providing coaching and mentoring but allowing employees to make decisions and take ownership of tasks

For a deeper look at leadership traits, see “7 leadership traits major enterprises look for in a CIO.”

Transformational leadership in IT

Although the concept of transformational leadership can apply to every industry — including healthcare, education, and government agencies — it’s increasingly important in IT as companies embrace digital transformation. Adapting to rapidly changing technologies, such as AI, machine learning, and generative AI, requires innovation and strong leadership to stay ahead of the curve and to remain competitive.

As leaders in IT, CIOs are responsible for setting the example as transformative leaders — especially considering they’re largely responsible for the digital transformation of the organization. Even beyond digital transformation, the Wall Street Journal reports that 90% of CIOs also report having responsibilities in areas such as DEI, HR, and sales and marketing.

IT has evolved to become a critical part of every business, which has in turn created a wider scope for CIOs and IT leaders who were once only charged with overseeing the organization’s technology stack. And studies have shown that embracing a transformational leadership can improve employee performance and well-being, which in turn improves retention rates and productivity. Studies have shown that leaders with a transformational style can create a company culture that encourages proactive behavior and improves employees’ attitudes towards their jobs.

Transactional vs. transformational leadership

Transactional leadership is the exact opposite of transformational leadership — it relies on motivating employees through rewards and punishments. It requires supervision, oversight, organization, and performance-monitoring. This leadership model doesn’t try to innovate. Instead, it’s rooted in keeping things consistent and predictable over time. Errors and faults are closely investigated, and the overall goal is to create efficient, routine procedures.

The transactional style of leadership is best suited to departments or organizations that require routine and structure — areas where businesses want to reduce chaos or inefficiency. But it doesn’t allow for innovation or future planning the same way transformational leadership will.

Transformational leadership, on the other hand, supports agile environments, especially where failure carries less risk. You want the development and maintenance of a current product to remain consistent and error free, but you don’t want that to hinder the progress and growth of future updates and improvements.

Transactional leadership takes care of creating a consistent development process, whereas transformational leadership leaves people free to come up with new ideas and look at the future of products, services, and ideas.

Benefits and limitations of transformational leadership

As with any form of leadership, there are benefits and limitations of transformational leadership, depending on the business leader. For example, advantages to transformational leadership include improved retention, higher employee satisfaction, and an overall stronger internal culture.

However, leaders who follow transformational leadership styles also need to be aware of burnout from pushing teams too hard, focusing too much on the big picture rather than the daily details, and there can be a dependence on a “charismatic leader” type, or someone who everyone relies on to keep energy levels up.

If organizations have the wrong person in place, it can quickly become an instance of pseudo-transformational leadership. This is a style of leadership that centers around charismatic and inspiring leaders who can rally the troops but fail to realize their ultimate goals or visions. For these leaders, they are typically motivated more by personal interest and self-gain, rather than the greater good of the organization and its employees.

Of course, with the right leader in place, transformational leadership can set the stage for easier transitions, happier workforces, and better communication and transparency throughout the organization.

Transformational leadership training and certification

Although transformational leadership skills are considered soft skills, there are still plenty of resources, certificates, and training programs aimed at developing transformational leaders. Here’s a short list of online resources to earn training and certifications in transformational leadership. However, it’s likely you can find an in-person training course at a local college or university in your home state.