Transformational leadership is passionate about achieving excellent results through extraordinary actions taken by others in the organization. Transformational leadership also acts to alter the organizational context and culture in order to sustain the remarkable accomplishments. Transformational leadership is crucial to creating breakthroughs in financial performance, revenue growth, innovation, and other forms of organizational transformation.
Transformational leadership begins with intense commitment to achieving the results needed to create value for the organization. This intense focus on value creation is a core commitment of the transformational leaders. Transformational leaders know that a key element in creating value begins with predictably delivering results with their organization. Further value is created when results are achieved far beyond what is expected and what competitors are achieving. When extraordinary results are being achieved, leaders have excellent opportunities to speak with their various stakeholders regarding the exciting future of the organization.
Observing the Consequences of Transformational Leadership
The popular comedy Seinfeld was described as the “show about nothing”. It may sound like transformational leadership is similar when answering the question “What to Look for in Observing Transformational Leaders”? There is no single right answer since there is not necessarily any one personal attribute or characteristic that identifies the person as a transformational leader. However, if the question is reframed as “What is probably going on around a transformational leader”, then we have something to talk about. When I look to see the consequences of transformational leadership, I consider the following:
- People are inspiring and in action.
- The organizational context is changing.
- People are working to expand the quality of communications, both personally and organizationally.
- Things are happening and there is a high energy among the people.
- The intense commitment to improving performance of the organization is readily apparent.
- Leadership development is happening on a large scale.
- Employees and other stakeholders are enrolled in the changes and are organized and active.
- Innovation is happening.
- A solid foundation for the future is being built.
1. People are Inspiring & In Action
Inspiration is the hallmark of transformational leadership. It is central to how transformational leaders accomplish their work. When observing and talking with people around transformational leaders, it is easy to see that these people are personally inspired and are inspiring others. When there is a “contagion of inspiration”, the people are on the path to creating unique possibilities for the organization.
Studies have documented the importance of inspiration. Zenger and Folkman found that inspiration is the one leadership skill which most highly correlates with high performance. Another study was seeking to understand what is needed to increase creativity and growth in organizations in the UK. As part of this study, the researchers found that employees believed that what their organizations needed most to grow was inspiration from their leaders. Unfortunately, the employees said inspiration was what they want the most, and yet what they got the least.
Inspiring people is contagious and creates other inspiring people. This inspiration is seen in people’s actions, attitudes and communication. The enthusiasm is palpable.
2. The Organizational Context is Changing
The context of an organization plays a major role in determining the results that it will achieve. The existing context must be altered in order to significantly improve performance. If the context is not altered, the performance will not be improved in a sustainable way. For a more thorough discussion of the impact of context on business results, see Goss, Pascal and Athos.
The evidence of transformational leadership is that the organizational context is changing and the people can tell you about it. Having the people be able to describe the change in context is evidence that the transformational leaders have designed and implemented contextual changes. Of equal importance is the widespread communication about these contextual changes. The evidence of these changes can be seen in informal talks with people, e.g., while standing by the coffee bar. When employees stop to tell me about how these changes have created cool, new opportunities in how they do their jobs, I know that transformational leadership is working.
3. The Quality of Communications Is Expanding
Communication is how transformational leaders impact and influence others. Transformational leaders strive to create an environment of open, honest and complete communication. The core component of communication is listening. The quality of listening is directly related to the effectiveness of communication.
I am confident that transformational leadership is working when I see many people working to expand the quality of communications, both personally and organizationally. Upward communication from those in the organization is essential for effective communication as well as success in execution and transformation. The evidence of effective upward communication is the openness of individual employees voicing concerns.
A side benefit is that employees will often tell me how they are using what they have learned about effective communications in their personal lives. This seems particularly important to families with teenagers, which is certainly understandable to those of us who have lived with teenagers.
4. Things are Happening & High Energy
Evidence of the impact of transformational leadership on an organization can be seen when “things are happening” and there is a strong sense of energy among the people. Their actions are intentional and have velocity. Ongoing accomplishments, both large and small, are apparent, recognized and celebrated as winning evidence of the transformation being fulfilled.
In addition, people are visibly and actively inquiring into breakdowns which have been declared. Achieving breakthroughs and exceptional results comes only through the willingness to acknowledge and declare breakdowns. A favorite expression is “the road to breakthroughs is paved with resolved breakdowns”. This is another hallmark of transformational leadership, since in most settings people are very reluctant to identify and talk about problems. There is a sense of fear and risk in many organizations to acknowledge problems since often the one who brings up the problem is blamed. This situation reflects a context of fear and blame, which dramatically suppresses creativity, initiative and innovation.
When transformational leadership alters the context of fear and blame, then the suppression of people’s creativity, initiative and innovation is removed. A new context can empower the people to be freer in innovation and self-expression, which is crucial to breakthroughs and transformational results. This is how transformational leaders energize people, who in turn energize teams and organizations to accomplish amazing results.
5. Intense Commitment to Improving Performance
Transformational leaders have a profound impact on their organizations. The design and nature, or being, of the organization changes as a crucial part of the transformation. This in turn empowers and unburdens employees. With this freedom, employees develop intense commitments to improving the performance of the organization. This intense commitment of employees is evidence that transformational leadership is present. Intense commitments of employees are essential in achieving and sustaining the exceptional results.
To gain this intense commitment from employees, transformational leaders demonstrate what is needed for the organization or team to be successful. Then they instill in the people a sense of confidence that they can be part of achieving this success. As part of this dynamic, people grow in their understanding of the technical aspects of the work. They grow in terms of their appreciation of what will satisfy the customer and increase financial performance. People grow in terms of their self-confidence and resourcefulness, and in terms of their willingness to try something new to see if it improves performance. Teams and organizations improve their capability and capacity to perform the value-adding actions that will improve the overall performance of the organization. This leaves lasting impacts and impressions on the organization. Leaders leave organizations in much better shape than they found them.
6. Developing Other Leaders
When leaders are around, people flourish. A transformational leader creates energy in the organization through developing leaders throughout the organization. Leaders develop other leaders. Leaders provide the source for the development of others in the organization.
Leaders have a deep appreciation of the importance of bringing other people along as leaders. It is essential to a leader that he/she appreciates the importance of helping develop other people as leaders; a leader can only move as fast as he/she develops others. The capability of leadership is given to the people, who in turn give back to the organization. The empowering, challenging, honoring, etc. remains with the people long after the results and accomplishments are achieved. People take these new leadership capabilities and learnings with them, and these stay even after the leader moves on.
Another part of this development is modeling what it looks like to be a leader as well as the actions that are needed from leaders. Leaders develop others through modeling and setting good examples.
When I see leadership development happening on a large scale, I am confident that transformational leadership is present. Please note, this does not necessarily mean that there are lots of leadership classes. Offering classes alone may not make much impact. Developing leaders requires a blend of education along with application.
7. Enrolling Employees & Other Stakeholders
Transformational leadership is required to enroll employees in acting in ways that create unique value for customers as well as for the organization. Enrollment is a term I use to denote the level of ownership people have for the changes which are occurring. Increases in the level of enrollment are evidence of transformational leadership.
As part of the design for transformation, the clients and I identify importance constituents whose support is essential for success in transformation. This always includes employees and usually involves other groups of stakeholders. We identify all of these people to be enrolled, analyze how increased enrollment will impact transformation, create an enrollment map to be able to see the interconnections between the various stakeholders, identify the current level of enrollment and then develop enrollment plans to move to the target groups to desired levels of enrollment. From time to time the level of enrollment for each group is reassessed, since absent communication and involvement people will slide back in their level of enrollment.
The methods for establishing and maintaining enrollment are all communications based. I provide training to equip employees in having enrollment conversations. These conversations must be based on listening as well as identifying the commitments each person and group has which, if supported, will enable them to become more actively involved in the transformation effort.
The biggest gift transformational leaders give to the people is the capacity to generate possibility and translate that into meaningful action for themselves. This includes being able to see the current context and how that context is playing out. Being able to see the current context enables individuals to see what is missing and to look at inventing what would give a more powerful future than is currently available. The commitment to a more powerful commitment is the foundation of enrollment.
8. Innovation is Happening
Creativity and innovation are essential in transformation and are evidence of the presence of transformational leadership. This innovation can be in how the organization thinks about its customers, markets, products, etc. Organizations in the midst of transformation create new levels of value through engaging employees to innovate how goods and services are provided to customers. The desirability of the goods and services is reflected in the customer paying an attractive amount, which in turn results in profitability and value for the business. While this is simple and straightforward in concept, it is quite another matter to achieve in practice. This is where transformational leader’s presence is seen, as creativity and innovation sprout up all across the organization. Often there are surprises in where the biggest, most impactful breakthroughs come from. Frequently it is from parts of the organization which previously were not that innovative, yet the spark from transformational leaders changed all that.
9. Building a Solid Foundation for the Future
Creating a new future is a crucial step that transformational leaders take early on. I would work with a cadre of leaders to identify the existing organizational context. We call that the Default Future. This is the predictable future for the organization if nothing changes. We then assess if this Default Future is desirable, which it is not. If the Default Future is desirable, there is no need for transformation and transformational leadership.
We then Invent a New Future which is very desirable. I work with clients to assure that the Invented Future exceeds expectations of shareholders and potential investors. As the Invented Future starts to take shape, the core of leaders assesses if this future is inspiring and worth working to achieve.
Perhaps the best example of Inventing a New Future is from my firm’s work with National Oilwell. National Oilwell manufactures products and provides services to firms engaged in exploration and drilling for oil and gas. At the time of our engagement, National Oilwell was a joint venture between two steel companies. While these two parents liked that oil pipe and other products are made of steel, they did not like the unpredictable price cycles of the oil business. Joel Staff was hired as CEO and pulled together a strong executive team. As we worked with the executive team about inventing their future, we emphasized that the future does not yet exist and is not necessarily determined by the past. There is a choice which can be taken if the leaders are willing to create it. During this conversation, one of the executives said “Well, if the future is made up we might as well make it a good one”. As the saying goes, the rest is history.
The executive team “made up” what they wanted to become, a company whose stock performed excellently on the New York Stock Exchange. They researched the important metrics and financial performance required to achieve the desired level of success. They determined that at that time the key metric was return on capital as well as the specific level of return. The specific number became a rallying cry. The executives even changed the executive conference room number to reflect that metric. Then they got to work engaging the employees, training them in breakthrough principles and transformational leadership. Intense breakthrough projects were created to dramatically improve performance. The CEO and CFO also set about lining up the financing to buy the company from the two steel companies. After a short time as a private company, National Oilwell went public on The New York Stock Exchange. In the years that followed, National Oilwell grew aggressively through innovation as well as through acquisitions. Following the acquisition of Varco, the company became known as National Oilwell Varco (NOV).
NOV had become the company its initial executive team dreamed about. While the executives of that team are all gone, the company has continued to be a stock market favorite in its industry.
Transformational Leadership – What it’s all about is producing exceptional results through the extraordinary actions of others around them, infusing the organization with the “right stuff” to make this performance sustainable. Understanding the power of transformational leadership is not about figuring out the behaviors or characteristics of the leader. Rather, it is about observing the evidence of transformational leaders with the people around them.
The evidence of transformational leaders is seen in those around the leader such as:
- People are inspiring and in action
- The organizational context is changing
- The quality of communications is expanding
- Things are happening and with high energy
- An intense commitment to improving performance is present
- Other leaders are being developed
- Employees and other stakeholders are being enrolled
- Innovation is happening
- A solid foundation for the future is being built
Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story.
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