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How transformational leadership really works

By Mostafa Sayyadi


The characteristics of transformational leaders, when used appropriately, represent a leadership model that can be effective to improve a knowledge-based workplace by developing and managing intellectual capital within organizations. Building on the transformational leadership model, organizations can attempt to continuously innovate and create new and valuable services or products by applying new ideas and knowledge.

This article adopts a holistic approach to address the following research question: How can transformational leaders meet the need for innovative products and services?

The answer to this question lies in a leader’s ability to facilitate the generation of new knowledge and ideas by motivating employees to solve organizational problems with increasing innovation. Moreover, transformational leaders inspire their teams to rethink problems and challenge their personal attitudes and values. Most importantly, transformational leaders transform organizations by attempting to change the basic values, beliefs and attitudes of employees so that they are willing to perform beyond their previous level.

Transformational leaders have been posited to be visionary leaders who attempt to develop a shared and inspiring vision for the future. They play a critical role in shifting organizations toward the creation of new services and products. These leaders contribute to new products and services to meet dynamic market needs through higher expectations and stimulation for new and strategic opportunities to meet the needs of customers in emerging marketplaces.

Unfortunately, while the characteristics of transformational leaders are positively associated with organizational innovation, it is somewhat underutilized in organizations worldwide. This is alarming because numerous empirical studies have found that there is a direct correlation between transformational leadership and organizational innovation. Many scholars highlight transformational leadership as an enabler of innovation. Therefore, leaders who may not be utilizing the transformational leadership model – which has been posited as a managerial-based competency for organizations operating in today’s innovative business environment – can now explore the virtues of using this leadership model to improve organizational performance.

An industry task force on leadership and management skills in 2017 found relevant information that may help leaders embrace transformational leadership. The task force first critiqued top managers and found them to be inadequate effective leaders. The report illustrates the weaknesses in leaders, such as failing to develop a clear vision for the future of their organization. Similarly, a report on management matters in 2018 illustrated that top managers in the manufacturing sector scored the least in the organizational behaviour of people management when compared to two other areas of operations and performance management. This particular report highlighted that companies need to enhance influence on human assets in order to achieve sustained competitiveness.

In both studies, companies were ranked low in almost all dimensions of people management. After careful review of these findings from both empirical studies, scholars recommend that companies must improve their human resources-related practices with the target of attracting, retaining and promoting their human resources. Furthermore, the recommendations for effective leadership are to focus on developing a strategic vision for future strategic initiatives and organizational innovation. By accepting the challenge of transformational leadership, leaders may be capable to overcome their own leadership flaws and lead better in today’s hypercompetitive environment.

The important aspect that all leaders can learn is that the characteristics of transformational leaders help employees accomplish tasks that they would not ordinarily consider as part of their competency. The challenge for top management executives and leaders in all organizations is to accept transformational leadership as a means to address the current gaps in leadership effectiveness and improve competitiveness in global markets in 2019.


Mostafa Sayyadi is a senior management consultant, author and business and technology journalist.




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