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Meaning and Characteristics of Transformational Leadership

Last updated on Jan 10,2024 325 Views

Many companies stop growing at some point. Their earnings remain static, and there seems to be no potential for improvement. At these times, you need someone who can bring a change and help others follow it. Changing a company’s way of working one fine day is not easy. It requires immense talent and the ability to convince others of the need to change. But it is not easy being such a leader. The person must possess all the necessary characteristics of transformational leadership to achieve the change.

The Executive Post Graduate Programme In HRM is the ideal course for you to learn everything about transformational leadership. You can learn more about this programme on our website. 

What Is Transformational Leadership?

Almost all of us have met people who took charge of a group and conveyed the vision for the group. These people bring about the change required for leading an organisation to future success. They have innovative ideas and can convince others about them. Transformational leadership doesn’t just think about the leader but also others. They help all the employees in the company adapt to the change and advance in their careers too. This type of leadership is needed when a company is stuck in a position and needs new ideas to progress. 

Among the characteristics of transformational leadership is the ability of the person to inspire positive changes in those who follow. These leaders are passionate about their work, highly energetic and enthusiastic. Their enthusiasm is infectious, and those who work with them also start liking their jobs better. These leaders take care to support everyone in the team or organisation also to succeed. Such leaders aim to instil confidence, inspire growth and promote loyalty. It is the leadership type where managers and employees help each other move to a higher level. 

Why Do Companies Need Transformational Leadership?

Why Do Companies Need Transformational Leadership?Brings About A Positive Business Culture

What is most important for companies is to have a positive business culture. When there is transformational leadership, this can happen quickly. Such leaders pay individual attention to all the employees and help them realise their strengths and weaknesses. When one pays special attention to them, employees feel more motivated. It makes them feel more valued and supported. Such motivation makes them put more effort into the work, leading to an overall improvement in the organisation’s performance. One of the many characteristics of transformational leadership is to pay consideration to every employee and help them grow. 

Creates A Clear Vision For The Company

Companies need to possess a clear vision of what they want to achieve. It is also true about all employees. They must know what they are working for and what they aim to achieve. A transformational leader has a clear vision of what the company and its staff members aim to achieve. Such leaders are especially important when the company is being acquired and going through a change. These leaders help others know what they must work for and what they will gain by doing so. They help other employees find new meaning and purpose in their work. 

Ensures Lasting Success

Success can be short-lived if the company is ready for change. Markets and situations keep changing, and every organisation must prepare for them. Transformational leaders prepare the company and its employees for such change. They use their strategic decision-making capabilities to make the firm ready for change. They can create an adaptable, agile and sustainable workforce by displaying high moral conduct. Another characteristic of transformational leadership is the ability to create other leaders within the team. Such leaders are more engaged and help the company achieve lasting success.

Difference Between Transformational And Transactional Leadership

While on the subject, it is good to understand the difference between transformational and transactional leadership. People often confuse both these terms. But the latter is the exact opposite of transformational leadership. In this style, leaders use rewards and punishments to motivate employees to do their best. It requires constant supervision, performance monitoring, organisation and oversight. Unlike transformational leadership, this method relies on keeping things consistent instead of innovating. Such leaders investigate mistakes and aim to create efficient and routine procedures. 

On the other hand, transformational leadership believes in agile environments where mistakes are better tolerated. It encourages updates and improvements in a product or process while maintaining the present functioning error-free. This type of leadership believes in innovation and encourages others to try new ideas. The focus of transformational leadership is on communication, inspiration and positive reinforcement. One of the important characteristics of transformational leadership is that it aims at achieving long-term goals instead of short-term gains. 

Transactional Leadership

  • Motivates using rewards and punishments
  • The focus is on compliance
  • Aims at short-term goals
  • Uses extrinsic rewards like a promotion or salary hikes

Transformational Leadership

  • Motivation is through enthusiasm and inspiration
  • Focussed on commitment
  • Long-term success is in focus here
  • Uses intrinsic rewards like pride, esteem, etc. 

Also Read Top 21 Effective Team Management Skills: Key To Become a Good Manager

The Elements Of Transformational Leadership

  1. Idealised Influence

The most important part of transformational leadership is to lead by example. Leaders don’t manipulate employees into working hard and improving their performance. Instead, the managers themselves do it and show it by example. It is all about influencing the employees through a commitment to trust, transparency and respect. If the leaders show authenticity in action, the others will follow. They will be inspired to reach a high level of performance, as exhibited by the leader. One of the important characteristics of transformational leadership is to be a role model for others. 

  1. Intellectual Stimulation

If you want to bring about change, moving away from the status quo is essential. But this is not easy in companies that have been used to a certain style of functioning. A transformational leader encourages innovation, creativity, problem-solving and critical thinking to bring about change. Such leaders give employees a feeling of comfort in exploring new ideas and opportunities that can bring innovation to the organisation. It is one of the characteristics of transformational leadership to create an environment that promotes growth and gets others excited about the transformation that is happening in the organisation. 

  1. Inspirational Motivation

Motivation by fear will not work in the long term. Employees are bound to get frustrated and look for ways to leave the firm. On the other hand, inspirational motivation will go a long way and help the organisation achieve its goals. A transformational leader makes others feel committed and connected to the company’s vision. Such leaders ensure the same commitment of the employees to the company’s goals as they feel. They do this by giving the workers a strong sense of purpose. 

  1. Individual Consideration

Every employee needs to feel a sense of independence and ownership of the common objectives of the organisation. A transformational leader understands that each individual is different and has unique needs. Every person contributes to the performance of the company. Each of them will need a different mentorship style, and transformational leaders offer this. They can tailor the coaching methods for each employee and ensure that their training needs are met. The ability to alter their approach to suit different people is one of the unique characteristics of transformational leadership

The Executive Post Graduate Programme In HRM deals with these components in detail. You can learn more about this course on our website. 

Characteristics Of Transformational Leadership

Open To New Ideas

This is one of the critical characteristics of transformational leadership. Such leaders adopt ideas from anywhere they may occur and can make them work in their company. They are constantly looking for opportunities to do things differently. They also encourage employees to come up with new ideas both for their work as well as for other areas. They are not keen to keep something working just because it is producing results now. These professionals look to change things keeping in mind the future of the company and its long-term goals. 

Talent To Change Views

Transformational leaders don’t just change their views. They also make an effort to change the way others see things. This takes a lot of effort from their side. These leaders must understand why people view things in a particular way. Only after knowing this can they attempt to change their minds. They must understand others’ backgrounds before trying to change their thinking. It takes great effort and two other skills. They must be empathetic and able to inspire others to change. 

Also Read: What Are Startup Business Models: How To Choose One For Your Startup?

Commitment To Listening Actively

If they want to get ideas from others, transformational leaders must give them the courage to speak their minds without hesitation. Active listening is one of the other characteristics of transformational leadership that helps them implement new ideas. They hear others’ ideas openly and without any bias. They are not judgemental about others’ views. They listen to others in a way that makes people feel that their views are respected. Employees feel seen and understood. This gives them the courage to voice their opinions without any censorship. 

Tolerance Of Intelligent Risks

Transformation cannot happen without taking risks. Companies will have to try out a few ideas before they arrive at the one that will be most suitable for them. While other leaders may fear taking risks, transformational leaders are always ready to take intelligent risks. They are willing to face the consequences of such risks. They also encourage their team members to take risks so that they can get innovative solutions. One of the characteristics of transformational leadership is to compare the risk with benefits and allow those that look feasible. 

Accepts Responsibilities

When you implement new ideas, there is always the possibility of failure. This is a risk that you must take. But it is not enough to expect such an outcome. It is a common occurrence that leaders place the blame for such failures on their subordinates. But transformational leaders are willing to accept responsibility for their actions. Only a leader who accepts responsibility for failures without blaming others can inspire confidence. Employees will be willing to follow such a leader and take risks themselves. 

Placing Trust On The Team Members

If leaders want the team members to come up with new ideas and try them out without fearing the results, they must place trust in the team. People need to be independent if they must try something new and transformational leaders understand this. One of the characteristics of transformational leadership is to place trust in their subordinates. Placing trust makes employees feel more committed to achieving the goals of the organisation. It will make them think many times before implementing a change because they don’t want to fail someone who has placed trust in them. 

Inspires Participation

No new idea can come up and be implemented without the participation of every member of the team. It is not enough that one or two members always come up with fresh ideas, and others just go along with the team. But to make others also think innovative, leaders must constantly think out of the box and voice their ideas. Transformational leaders will also recognise ideas and suggestions even when they don’t bring any major changes from the present methods. This will turn the whole team into an ideal team.

Key Skills Needed For Transformational Leaders

Key Skills Needed For Transformational Leaders

Being Inspirational

Transformational leaders need the support of the whole team if their innovative ideas must succeed. They know this, and they must find a way to make others contribute to the idea with the same enthusiasm. These leaders don’t use rewards or punishment to make others follow them. They inspire their subordinates with their actions and behaviour. The team is motivated to see these leaders, and they also put in efforts to make new ideas successful. This is one of the characteristics of transformational leadership that makes them what they are. 


Transformational leaders are generally ambitious. Once they take up work, they will not rest till they have achieved what they aim for. They put all efforts into making the change that will make the organisation more successful and reach its objectives. These leaders aim to achieve the firm’s overall vision. As their success depends on that of the company, they align their ambitions with that of the company. Their ambition also makes them relentlessly pursue a goal till they have achieved it. 

Decision Making

This is one of the vital characteristics of transformational leadership because they are always trying to implement new strategies. This requires tough decisions to be taken without much time to think about them. This means that they must possess excellent decision-making capabilities. They don’t hesitate to take unconventional decisions if they know that it will help the company achieve its objectives. However, they will always keep the company’s goals, beliefs and vision as the basis for all their decisions. 


Modesty is not a skill that most people will associate with leaders. Most leaders exhibit pride in their success. But transformational leaders show a high amount of modesty even when their plans and ideas have succeeded fully. They always appreciate the ideas put forward by the team members, even at the cost of not giving full credit for their contributions. They always keep the organisation’s objectives above their personal goals or successes. Being modest, they are always ready to give up their ideas for the larger good of the organisation. 

Risk Assessment

Being innovative requires transformational leaders to take calculated risks. They cannot hesitate to try new ideas just because there are risks. But it should not happen that their risk-taking brings huge losses to the organisation or affects other employees’ growth prospects. They must be able to take a calculated risk and ensure that even if the idea fails, the company doesn’t suffer too much. They take risks after analysing market conditions and other data available to them. It is also one of the characteristics of transformational leadership to take the opinions of others before jumping to a conclusion. 

Being Visionary

Transformational leaders don’t normally work towards short-term gains. They try ideas that will benefit the company on a long-term basis. They possess the ability to plan for the future. They have a realistic and achievable vision for the company and its employees. Apart from this, they also possess the skills to convey their visions convincingly to the team members. Their message will have the passion they feel for the plan, and it will affect the other members also. With their powerful vision and values, they become role models for their subordinates. 

It is possible to acquire all the above skills and other capabilities by attending the Executive Post Graduate Programme In HRM offered by reputed institutions. You can get further details about this course on our website. 

Summing Up

Every company needs a visionary leader who can spur it to quick growth with innovative ideas and views. But such leaders are not very common, and anyone having such capabilities will be highly valued by employers. Cultivating the characteristics of transformational leadership will help anyone become a trusted and inspirational leader who the employees of the company will be ready to follow. Through this article, we have listed a few qualities that such leaders must possess. Acquiring them can put you on the right path to becoming such a leader.


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Meaning and Characteristics of Transformational Leadership