Transformational Leadership and HRM

HR departments have more time and space to rethink their tasks and usher HR into the new century as firms use new technologies to automate their processes. By promoting a corporate culture of accountability, ownership, and workplace autonomy, the transformational leadership style in HR encourages employees to embrace change.

What is Transformational Leadership

The transformational leadership strategy promotes, inspires, and motivates workers to innovate and make the required changes to define the company’s future success. Executives may do this by setting a good example by exhibiting authenticity, a strong sense of corporate culture, employee ownership, and autonomy at work. Transformational leaders are company change agents who can detect creative and evolving technological trends and assist their organizations to embrace that change.

Transformational leaders inspire and excite their teams without micromanaging; they trust trained people to make choices in their given roles. It’s a management approach that motivates employees to think creatively, strategically, and creatively to find new solutions to long-standing problems. Employees on the leadership track will get coaching and training to help them develop into transformative leaders.

Transformational Leadership Theory

James V. Downton developed the notion of transformational leadership in 1973, and James Burns elaborated on it in 1978. Bernard M. Bass, a researcher, broadened the notion in 1985 to include methods for monitoring the performance of transformational leadership. This style encourages leaders to show true, powerful leadership in the hopes that employees will be encouraged to do the same.

Although Bass’ transformational leadership theory dates back to the 1970s, it is still a successful leadership model employed today; this true leadership style never changes, just the contexts in which it is applied. It applies to many industries, but it is especially important in the fast-paced IT business, where innovation and adaptability can build or destroy a company.

Elements of the Transformational Leadership Model

The transformational leadership concept and style are defined by four major elements. Bass proposed these elements in 1985 to help define transformational leadership and how to be successful as this sort of leader:

• Charismatic leadership: As a transformational leader, the most essential thing you can do is lead by example. Employees will look to you as a role model for workplace behavior in all areas. If you lead with sincerity, your staff will pick up on it and be encouraged to keep up the high quality of performance. It is not about coercing people into working hard; rather, it is about setting a good example and positively influencing others by committing to trust, transparency, and respect.
• Intellectual stimulation: To promote change, it’s vital to push the status quo by promoting innovation, creativity, critical thinking, and problem-solving while also challenging ingrained business views. Employees should feel free to explore novel possibilities and ideas that may help the organization become more innovative under the direction of transformative leaders. You want to create an atmosphere that encourages development and gets everyone fired up about digital transformation and other significant organizational efforts.

• Idealized influence: As a transformational leader, you must inspire your staff to feel related to and devoted to the organization’s goal. You may make sure that they are as committed to these goals as you are as a leader by giving them a compelling sense of purpose as opposed to trying to motivate them via fear.
• Individual consideration: Employees must experience a feeling of independence and ownership in the broader corporate goals. As a transformative leader, it is critical to recognize that each employee is a unique individual inside the firm with particular requirements, mentoring styles, and contributions to the company. These leaders will adjust their coaching and mentoring techniques for the employee in order to assist them in achieving goals both within and outside of the business.

Transformational Leadership Characteristics

Transformational leaders possess a collection of diverse attributes that, in the best-case scenario, complement and build on one another to provide the most successful leadership strategy. Among these qualities are the following:

• Embracing change. Transformational leaders accept change and anticipate its impact on a company so that they are prepared to deal with issues.
• Emotional intelligence. Transformational leaders must be willing to cooperate, have empathy, and be emotionally intelligent. They are self-motivated, resilient, and capable of gaining the trust and respect of others around them.
• Adaptability. Transformational leaders in HR can deal with rapid industry change and implement sophisticated technologies and strategies. They also understand the ramifications of how these changes will affect other technologies, allowing them to anticipate issues before they occur.
• Outstanding team player. Instead of putting themselves first, transformational leaders prioritize the well-being of their people and the firm. When the team achieves success, they rejoice together and share credit where credit is due.
• Promoting communication and involvement. Transformational leaders absorb ideas from all around them without bias or prejudice. They can talk openly and honestly with employees, which fosters long-term trust.

Importance of Transformational Leadership

There are several leadership styles. While some may benefit the individual leader or provide short-term gains, transformational leadership promotes behaviors and habits that will benefit the business over time. This strategy has gained popularity since it may be a win-win situation for both the leader and the company.

A transformational leader, for example, prioritizes knowing what inspires individual workers and assisting them in focusing on the company’s long-term goal rather than focusing on tactics or short-term concerns.

Additionally, these leaders aren’t reluctant to take on challenges or think critically about criticism. Employees are therefore given the freedom to express their opinions and provide helpful critiques on fresh guidelines. To ensure that everyone contributes to the team’s success, leaders will also take chances and support others’ ideas. Transformational leaders advocate coaching and team development rather than a strict leadership style. Building employee confidence in their capacity to perform and learn from mistakes helps firms better prepare for unforeseen events like restructuring or downsizing.

Advantages of Transformational Leadership

Getting staff to regularly achieve and exceed goals is a fundamental leadership aim. Transactional leadership does this through the use of incentives and punishments, whereas transformational leadership focuses on inspiring motivation. Below are some of the advantages of transformational leadership.

• Transformational leaders have a less authoritarian style of management, allowing staff more freedom to experiment and promote new ideas and techniques.
• Employees are urged to prioritize what is best for the business over their personal self-interest.
• People performing the work, engaging directly with consumers, and production difficulties, generate more innovative ideas and methods.
• Employees take a personal interest in the organization’s aims, which leads to increased dedication and effort at work.
• A successful transformational leader brings the group together around a single goal.

Disadvantages of Transformational Leadership

With great powers come great responsibilities, and so is the case with transformational leadership. Let’s have a look at some of the disadvantages of transformational leadership.

• The inspirational, big-picture vision of the transformational leader is not necessarily accompanied by comprehensive instructions on how to get there.
• Employees may burn out or become discouraged if the vision is too lofty or aggressive.
• A transformational leader, by definition, delivers change to a company, yet that change might be too disruptive in some situations. Leaders must focus on the organization’s advantage rather than change in order to promote change.
• There’s always the possibility that some workers would disagree with the transformative leader’s vision. It doesn’t imply they won’t accomplish their jobs, but they could do them in a less-than-ideal way.
• Maintaining passion and interacting with colleagues is an important elements of being a transformative leader. This is best done by consistent proactive communication and encouragement, which can take time.

Transformational Leadership Examples

To find the finest instances of transformative leadership, Harvard Business Review examined organizations on the S&P and Fortune Global 500 lists. These companies were evaluated based on their “new goods, services, and business strategies; reinventing their core business; and financial success.”

Amazon’s Jeff Bezos: Harvard Business Review credits Bezos’ “insider, outsider” position with helping him become a great transformative leader. When Jeff Bezos founded Amazon, he altered a sector that is now merely a footnote to its mega-success. Amazon’s first success came from its role as an online bookstore. Amazon swiftly developed to become the e-commerce behemoth it is today when it began selling other things. Encouraging a business culture that is receptive to new ideas has paid off even more. Amazon Web Services (AWS), which began as a homegrown solution to Amazon’s own storage and processing needs, helped kickstart the cloud computing revolution.

Apple’s Steve Jobs and Tim Cook: Apple is cited by HBR as an example of “dual transformation”: Jobs built a software ecosystem while innovating on original Microsoft goods. Cook has carried on Jobs’ vision, focusing on innovation, software, and brand loyalty. The late Apple co-founder and CEO was widely regarded as a genius and visionary, inspiring a wave of revolutionary product creation over his two tenures at the company. He motivated – and commanded – teams to build the most consumer-friendly hardware and software designs throughout Apple’s early years. Products such as the iPod, iPhone, and iPad heralded his return to Apple more than a decade later. He skillfully expressed his idea of items that are both high-quality and consumer-friendly.

Microsoft’s Satya Nadella: Satya Nadella, who became CEO of Microsoft in 2014, revolutionized the corporation. What was once a slow-moving IT behemoth intent on maintaining its market dominance is now a nimbler and more open provider that has moved fast to make its software available on all platforms, including those of its competitors.

Netflix’s Reed Hastings: With its eponymous service, which has established streaming in the business, the co-founder and co-CEO of Netflix helped revolutionize entertainment forever. Initially, the firm distributed DVDs (digital video discs) for a monthly subscription before switching to streaming. Netflix expanded from a delivery business to a significant supplier of original content under Hastings’ leadership. Going even further, Netflix created complicated algorithms based on audience usage in order to offer appropriate content recommendations. Hastings’ idea that the corporation is required to have the proper culture has been a critical component of his leadership. He produced an internal culture guide after speaking with staff to learn how they felt the organization should best function. It was then made available online and used as a screening tool to discourage incompatible persons from applying for jobs at Netflix.

Priceline’s Jeff Boyd and Glenn Fogel: Boyd and Fogel redefined travel bookings by charging reduced commission fees on reservations but focusing on smaller specialty markets (inns, B&Bs, and apartments), eventually producing Booking.com.

Tesla’s Elon Musk: Establishing a vision that an organization can grasp and joyfully follow is a critical transformational leadership skill. Elon Musk had a dream of electric vehicles that lasted the test of time, despite early setbacks and near-bankruptcy. Tesla is now one of the world’s most valuable firms. His mastery of software also altered what it takes to be a successful automobile manufacturer. Musk is also one of those rare individuals who has disrupted numerous sectors since SpaceX has been a leader in commercializing space flight.

Transactional Leadership

Transactional leadership emphasizes getting results, adheres to an organization’s current structure, and gauges performance using the organization’s reward and penalty system. Transactional leaders hold official positions of authority and accountability inside a company. This sort of leader is in charge of routine maintenance by controlling individual performance and supporting collective performance.

This style of leader establishes standards for their employees based on previously specified needs. Performance evaluations are the most popular way to gauge an employee’s performance. Managerial, or, transactional leaders function best with people who are knowledgeable about their professions and are driven by a reward-penalty structure. Transactional leadership keeps an organization’s status quo in place.

Transactional vs. Transformational Leadership

Transactional leadership is the complete antithesis of transformational leadership in that it focuses on rewards and penalties to motivate personnel. It necessitates management, oversight, organization, and performance evaluation. This leadership paradigm makes no attempt to innovate. Instead, it is based on maintaining consistency and predictability across time. Errors and flaws are thoroughly explored, with the overarching objective of developing efficient, regular operations.

This design suits departments or companies that demand regularity and structure in places where firms wish to eliminate confusion or inefficiency. However, unlike transformational leadership, it does not promote innovation or long-term planning.

The opposite is also true: transformative leadership promotes agile environments, especially ones where failure is less hazardous. While consistency and error-free production of a current product is something you desire, you also don’t want that to obstruct the growth and extension of prospective upgrades and expansions.

Transactional leadership is responsible for establishing a consistent growth process, but transformational leadership frees individuals to generate new ideas and consider the future of goods, services, and ideas.

Top 4 HR Transformational Leadership Practices

Transformational leadership encourages initiative among employees, which helps you get closer to your company’s objectives more quickly.

HR has a crucial role to play in promoting and initiating transformational leadership approaches since it is concerned with “the human.”

1. Recognize and connect to others

Understanding the personalities that make up your staff is the first step because transformational HR values the individual. Each of your workers will have various personality features, different motivators and motivations, and diverse values that influence their behaviors and conduct.

This degree of understanding each of your employees is a challenging endeavor that becomes more difficult as your team grows.

Consumer Personality Traits API are intriguing tools that were created primarily to evaluate the personality traits of consumers, but they may also be used to evaluate the personality traits of workers. These technologies make use of artificial intelligence (AI) to decipher the written language and reveal important characteristics of the author.

Find out if your staff members are motivated by emotions or by logic. What are their communication style preferences? Find out what drives people with this information, then use your newfound understanding in your communication.

2. Promote Open Communication

Speaking of increased communication, transformational HR leaders tries to level the playing field by facilitating two-way talks between management and employees. This way, all sides may feel that they are being heard, appreciated, and active members of the organization.

For instance, it’s crucial that they fully understand your business plan, but it’s also crucial that they feel empowered to offer input and influence the specifics.

Transformative HR understands that for workers to feel invested in your company, they need to feel engaged.

Employees will reward you with critical insights into the operation of your company that could otherwise go unnoticed, in addition to their dedication and involvement. The information that your employees have about your company as a whole encompasses every procedure, after all.

HR can control this open discourse by fostering workplaces where workers feel comfortable speaking out. For instance, offer facilitated brainstorming sessions as opposed to weekly team meetings where participants simply observe and take notes.

You might want to reevaluate your internal communication strategies as well. You need to step it up and start using technologies to make communication more collaborative if email is still your main channel for internal communication.

3. Review the Data

To stay current on how workers feel about your business plan and any changes made, substitute smaller, more targeted, and more frequent pulse surveys for yearly employee engagement surveys. As the saying goes, prevention is better than cure, so it’s essential to learn about and address any unhappiness among your staff members as soon as possible.

Sending and analyzing more surveys could seem daunting, but it doesn’t have to be. To make it simple and quick to analyze survey data by sentiment and subject.

4. Educating and Advising Management

The third transformative HR practice is to inform and consult management effectively. HR may not be in charge of change in your organization, but it is an important part of the process.

HR examines the effect of changes on the workforce, gaining insight into what works and what still needs improvement. To achieve transformative leadership, management must be willing to be directed, coordinated, and consulted by HR.

Closing Thoughts

Some studies believe that transactional leadership is superior, while others favor transformational leadership. Therefore, the discussion of the two leadership philosophies is perpetual. There isn’t a universal leadership approach that, in my opinion, works well in every situation. Therefore, a company shouldn’t rely just on one type of leadership when it comes to HR.

[To share your insights with us, please write to sghosh@martechseries.com]