The business benefits of transformational leadership

7 min read  |   22 April, 2024   By Suzanne Hurndall, Relationship Director, hr inspire

Four origami figures are shown, made of different coloured paper. One is yellow and scrunched into a ball, the next is a small turquoise boat, the next is a blue and purple swan, and the final one in the air is a red and pink bird. These represent growth or development

Transformational leadership has grown in visibility over recent years. The term was originally coined by political scientist James McGregor Burns in 1978, and the theories behind transformational leadership have been further developed by various organisational psychologists and business experts.

In this article, we explain the principles of transformational leadership, the benefits of adopting this style of management and look at some of the pioneers who are reinventing businesses, and in some cases, entire industries.

We’ll also discuss the steps people in businesses of every size can take on their journey towards becoming transformational leaders.



What is transformational leadership?

Transformational leadership is a leadership style that inspires positive changes in employees or followers. Transformational leaders are energetic, enthusiastic and passionate about what they do and how they engage with their brand. Not only are they concerned and involved but they are also focused on helping every member of the group to succeed.

Transformational leaders help people perform in ways that create meaningful change. They also help prepare their staff to respond to any uncertainty with innovation and courage. Agility is key to this leadership style – the transformational leader must change their work processes from time to time in order to grow and shape their future.


The 4 elements of transformational leadership

Are leaders born or made? Can someone become a transformational leader if they don’t feel they have leadership traits and qualities?

The organisational psychologist Bernard Bass wrote extensively about transformational leadership and he believed that people can anyone can become one by focusing on the following four core elements and putting these into action:

  1. Intellectual stimulation

  2. Individualised consideration

  3. Inspirational motivation

  4. Idealised influence

Intellectual stimulation: Transformational leaders not only challenge the status quo; they also encourage creativity among their followers. This leader encourages followers to explore new ways of doing things and new opportunities to learn.

Individualised consideration: Transformational leadership also involves offering support and encouragement to individual followers. To foster supportive relationships, transformational leaders keep lines of communication open so that followers feel free to share ideas so leaders can offer direct recognition of the unique contributions of each follower.

Inspirational motivation: Transformational leaders inspire followers. They also motivate them through excellent communication skills, honesty and integrity. They have a clear vision that they are able to articulate to followers and are able to help followers experience the same passion and motivation to fulfil these goals.

Idealised influence: The transformational leader is a role model for his or her followers. Because followers trust and respect them, they emulate this individual and internalise his or her ideals. These leaders develop a shared vision with their team members, focusing on team building and setting higher levels of moral and ethical behaviours.



Who is an example of a transformational leader?

Nelson Mandela was a South African anti-apartheid revolutionary, statesman and philanthropist. He served as President of the country from 1994 to 1999.

He was also a transformational leader. He motivated his followers to exceptional accomplishments through his charisma, inspiration, individualised attention and intellectual stimulation to motivate.

His leadership is clearly demonstrated by one of his most famous quotes: “I learnt that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.”

Let’s also look at Apple co-founder Steve Jobs - a transformational leader in the truest sense. He was creative, passionate and visionary. He encouraged his colleagues to realise the need for innovation and embraced long-term and broad views to achieve the company’s objectives.

He was a visionary who always inspired his followers, stakeholders and clients. It helped him to create something different from others, be creative and be a trend-setter as illustrated when he said: “Great things in business are never done by one person. They're done by a team of people."


Women & transformational leadership

It is not, however, just men who are transformational leaders. There is, in fact, a growing body of evidence to suggest that the traits associated to this style of leadership are found more in women than men. The American academic and writer Judy Rosener believes that many female leaders who have broken through the glass ceiling in business and established themselves in leadership positions have done so by moving away from traditional ‘command-and-control’ styles which are associated with men.

Organisational psychologists Bernard Bass and Bruce Avolio conducted research which they say suggests that women are more likely to be trusted and respected, showing greater concern for individual team members’ needs. Women, they argue, tend to be more nurturing, caring and sensitive than men and these characteristics are more aligned with transformational as opposed to traditional leadership styles.

There are numerous examples of female entrepreneurs and leaders who have already transformed existing businesses or who lead organisations they have founded which are based on progressive, transformational leadership principles. 

By turning around a Chicago morning show’s low rating in a few short months, Oprah Winfrey earned her own show. “The Oprah Winfrey Show” was broadcast nationally for the first time on September 8, 1986 and went on to become the highest-rated talk show in TV history.

Winfrey continued to gain momentum over time. Her accomplishments include: becoming the first African-American woman on Forbes’ “World’s Richest People” list, launching The Oprah Winfrey Leadership Academy for Girls in South Africa, and getting the “Oprah Bill” signed into law, which created a national database for child abusers.

Closer to home, Anita Roddick, founder of the Body Shop, transformed the retail industry forever, building a multi-million pound business based on social principles and her commitment to the environment. she campaigned for debt relief for Third World nations, the rights of indigenous peoples in South America and the preservation of the rain forest, to name but a few.

Ariana Huffington, CEO of Thrive Global explained her philosophy and beliefs and how these are key to her vision of transforming workplaces, creating new environments where women are empowered and can flourish. Like Anita Roddick and Oprah Winfrey, Ariana is a transformational leader who combines brilliant business acumen with a commitment to social responsibility, saying:

“The easiest way to get something to grow and flourish and thrive is to create the ideal environment for it. But right now women are not thriving in a workplace built by men, for men. And so the Third Women’s Revolution will be about not just getting women into leadership positions, but about what they’ll do once they get there: leading the way in redesigning the way we work and the way we live...

“When we prioritise our wellbeing, reject our always-on culture and take the time to unplug and recharge, our performance actually goes up across the board – in creativity, decision-making, problem-solving, focus, attention, and productivity.”


Applying transformational leadership to your small business 

Implementing transformational leadership has many positive outcomes. It is not only beneficial in workplaces but in other situations as well. The four components of transformational leadership lead to positive emotions among employees.

The four components are also associated with higher job satisfaction and a belief in the shared vision. Intellectual stimulation and inspirational motivation bring positive emotions such as enthusiasm and happiness.

A transformational leader inspires people and follows their self-interest. Hence, aligning the teams of the organisation towards transformational leadership is vital. It will lead to higher job satisfaction, employee morale and motivation.

The impact of such leadership is important and can help companies develop leadership training programmes that can be used to teach transformational leadership skills.

Acquiring communication skills such as resolving conflicts in the workplace and recognising the needs of employees are an important part of transformational leadership.

These training programmes can also be seen as another essential component of workplace health promotion and prevention efforts.


Final thoughts

In their classic text, Transformational Leadership, authors Bernard Bass and Ronald Riggio succinctly summed up the benefits of this style of management and its ability to fundamentally change organisations and team members of the better. We’ll leave the final words to them:

"Transformational leaders … are those who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leaders help followers grow and develop into leaders by responding to individual followers' needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group and the larger organisation. 

This guest blog was written by Suzanne Hurndall, Relationship Director at hr inspire, who are Gold HR Partners of Breathe. 

Author: Suzanne Hurndall, Relationship Director, hr inspire

Back to listing

Sign up to get the latest HR and people management insights straight to your inbox