Transformational Leadership Theory

“Lead and inspire people. Don’t try and manage people. Inventories can be managed, people must be lead”. – Ross Perot

James V Downtown first introduced the transformation theory in 1978, which was further developed by a presidential biographer and a leadership expert James McGregor Burns.

Transformational leadership theory is a relatively new approach to leadership that emphasises how leaders can create value and a positive change in their followers. Transformational leaders inspire followers to change perceptions, expectations and motivators to work towards common goals through their strength of personality and vision. Transformational leadership theory is based on a leader’s ability and personality traits to bring about changes through examples, challenging goals, and articulation of an energising vision. Transformational leaders are moral exemplars working towards the wellbeing of the organisation, team or the community. According to Bass transformational leaders earn respect, admiration, and trust from their followers.

Transformational leaders are seen in all the levels of the organisation, they are found in departments, divisions, teams, and in the organisations as a whole.

Transformational Leadership Theory focuses on four main aspects:

  • Inspirational Motivation
  • Intellectual Stimulation
  • Idealised Influence
  • Individualised Consideration

Transformational Leadership Theory


The basis of transformational leadership theory is encouraging consistent mission, values and vision amongst its team members. Their vision is so enthralling that they are aware of what they want from every single interaction. Transformational leaders pilot their followers by furnishing them with challenges and a sense of meaning towards their jobs. They perform optimistically and enthusiastically to encourage the spirit of commitment and leadership.


Such leaders stimulate their subordinates to be creative and innovative. New ideas by their followers are always welcomed and these leaders never criticise the followers for the blunders made by their team in public. The leaders concentrate on “what” in the problems and never play a blame game. They do not think twice to stop an old practice employed by them if it is found ineffective.


These leaders believe in the philosophy that the leaders can have an impact on their followers only when he practices what he preaches. Such leaders always win the respect and trust of their team members demonstrating their actions. They hold their team needs above their own, demonstrate high ethical conduct and sacrifice their personal gains for them. Such leaders employ power by influencing the followers to thrive to achieve common goals of the organisation.


These leaders play the role of mentors to their team members and reward them for innovation and creativity. The members of the team are treated differently based on their knowledge and skills. They are empowered to make decisions and are always given all the necessary support in implementing their decisions.


Transformational leadership brings together a set of assorted approaches and capabilities to leadership becoming the reason for various advantages for an organisation. Such leaders set great examples to their followers, exhibits integrity, inspire his followers to look beyond individual interests, and encourage the focus on needs and interests of the organisation and clearly communicate organisational goals to his followers.

  • Vision

Transformational leaders have the potential to access the company’s current situation quickly and devise a vision for its growth and development. They clearly communicate the vision to the followers and get everyone on board. Transformational leaders always look at the big picture, which aids them in dealing with challenging situations in the organisation.

  • Inspiration

The ability to motivate and inspire employees aligns with the vision of transformational leaders. Enthusiasm and passion are the qualities of transformational leaders which empowers these leaders to bring employees and team members to an enterprise to optimize performance. Besides leading a company in its tough times, transformational leaders bank on their passion and aid employees to head in the same direction.

  • New Initiatives

In this form of leadership, managers with transformational leadership skills are placed in roles, which require improvement and change. Transformational leaders look at special projects in the form of new initiatives, as they respond to the changing requirements of the team and the organisation. These leaders encourage employees to bring about certain changes in themselves and realise their full potential, which aids at improved employee performance.

  • Corporate Learning

Effective outcomes are a result of trained employees. Holding transformational leaders responsible for corporate learning improves employee efficiency, and equips new employees in enhancing their productivity. A transformational leader engaging in corporate learning is the greatest advantage for any business. Transformational leaders are best at vision building, holding high-performance expectations for employees, providing individual support and intellectual stimulation, modelling positive behaviour, and culture building.


In spite of the positive attributes of transformational leadership, managers need to get awared of potential problems that may possibly come up in this leadership style.

  • Influences can be Obnoxious

Transformational leaders are good visionaries and motivators. They are very charismatic and are capable of talking to people and making changes amongst their followers in the following goals together as one. Such leaders have the potential to convert and motivate followers into believing what they represent, which can be effective in achieving goals with no or very fewer objections. This attribute can have an adverse effect if the leader himself is individual goal oriented and immoral or even if the leader is a risk taker who will take hasty decisions that are not well thought.

  • Employee Favoritism

Transformational leaders are drawn towards followers who buy their vision, which implies that the coach will mentor those followers who contribute to their vision. Not all employees might be as enthusiastic about their vision, which could form an in-group and an out-group where few are given more time and in turn more opportunities to succeed compared to the others. This may build resentment between those on the inside and the outside.

  • Employee Burnout

Being a good motivator is a great thing that inspires employees to perform better. Nevertheless, it proves to be a two-edged knife. Long hours of work which leads to achieving collective goals while ignoring personal goals and results in employee burn out because employees do have a personal life that demands attention. It is crucial to understand the limitations of your employees or team and respect it also, as encouraging a balanced lifestyle for the employees while developing transformational leadership skills.

  • Not Always Effective

Transformational leadership motivates individuals and followers and may also uplift their morale. However, this may not be applicable at all times. In a company where employees look at their leaders as somebody like themselves, the possibility of this leader not being enough effective is higher, because the followers might choose to bank on their own perceptions.

Transformational leadership is the essence of transformational management and the key to successfully manage to transform organisational changes. Transformational leadership begins with transformation. It is based on the belief that you can give people only that what you have authentically received yourself. Transformational leaders are driven by a purpose. They understand the significance of being prepared and the need to lead by faith. Transformational leaders embrace selflessness.

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