Transformational leadership is a leadership theory based on the concept that a leader operates with team members or followers outside of their immediate self-interests to recognize necessary reform, create a vision to guide the change through influence, encouragement, and implementing the change in conjunction with dedicated members of a group. The change in self-interest enhances the follower’s levels of maturity and ideologies, as well as their concerns for accomplishment.
The notion of transformational leadership was first proposed by James V. Downton, who invented the phrase “transformational leadership,” and has since been expanded upon by leadership specialist and political biographer James MacGregor Burns. Transformational leadership may be demonstrated when “leaders and followers help each other progress to a greater degree of morality and motivation,” according to Burns.
Transformational leaders can inspire followers to alter preconceptions, perspectives, and motivating factors to work toward similar objectives because of the strength of their vision and personality. Burns also defined transformational leaders as people who can easily move followers up Maslow’s Hierarchy of Needs while also inspiring them to think beyond their self-interest.
Transformational leadership is based on the idea that a leader works with team members or followers outside of their immediate self-interests to recognize necessary reform, create a vision to guide the change through influence, encouragement, and implementation in collaboration with dedicated members of a group.
James V. Downton invented the phrase “transformational leadership.” He initially introduced the concept, which was subsequently built upon by leadership specialist and political biographer James MacGregor Burns.
Transformational leaders frequently demonstrate four distinct qualities, generally referred to as the four I’s. The traits include inspiring drive, idealistic influence, intellectual stimulation, and individual concern.
How Transformational Leadership Works
Transformational leadership happens when a leader’s actions influence and encourage subordinates to outperform their perceived abilities. Such a type of leadership motivates others to achieve unanticipated or outstanding results.
Transformational leadership provides individuals autonomy over specific duties, as well as the authority to make choices after they’ve been trained. It results in a favorable shift in the mindsets of the participants and the organization as a whole. Transformational leaders often exhibit four unique characteristics, commonly known as the four I’s.
The characteristics are:
Transformational leadership improves subordinates’ motivation, esprit de corps, and work performance through several different mechanisms, including;
Connecting the follower’s sense of identity and self to a venture or project and the shared identity of an organization
Being a role model for followers to encourage and raise their interest in the project
Challenging followers to assume greater ownership and accountability for their work and understanding the strengths and weaknesses of the followers, hence, the organization.
Transformational leadership promotes followers’ dedication, participation, loyalty, and performance. Followers do everything in their abilities to express their support for the leader, to emulate the leader in an attempt to intellectually connect with them, and to preserve loyalty without compromising their sense of self-esteem.
Transformational leaders are capable of adapting to different circumstances, sharing a collective awareness, self-managing, and inspiring a team of employees.
The Four I’s of Transformational Leaders
There are four (4) main characteristics of transformational leadership, and these can be summarized as:
1. Idealized Influence or “II”
Idealized Influence denotes the leader’s function as an ideal role model for followers. A transformative leader exemplifies the characteristics that they seek in their team. In this instance, the followers regard the leader as a role model to imitate.
2. Inspirational Motivation (IM)
Transformational leaders may inspire and motivate people by providing a clear vision and communicating that vision. When joined together with “Idealized Influence,” the two characteristics represent the transformational leader’s productivity. With clarity, a transformative leader can readily inspire their people.
3. Individualized Consideration (IC)
Transformational leaders show genuine care for their followers’ emotions and needs, and they assist them in self-actualization. The individual attention to each follower contributes to the development of trust among the organization and its members and its authority figure(s).
4. Intellectual Stimulation (IS)
Transformational leaders encourage their followers to be creative and innovative and to question the status quo.
Thank you for reading CFI’s guide to Transformational Leadership. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:
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