The topic of leadership development within organisations has become high on the agenda, as businesses need to become more competitive. Nevertheless, there is no clear answer to the question of what makes a good leader. While some think that effective leaders are born, others think that it takes experience to become a true leader. Thus, when organisations have an aim of developing new leadership practices, a question on what they should focus remains. For instance, what characteristics and skills should businesses should aim to develop in new leaders. Since there is no precise definition of the concept of leadership, it may be argued that leadership development programs can focus on a variety of different skills and qualities.
Difference Between Leadership and Management
The key to resolving the debate of management versus leadership refers to the understanding the differences between the two concepts. According to Ratcliffe (2013) from the Guardian, management is a set of processes aimed at keeping a business running and competitive. These processes are associated with planning, forecasting, budgeting, performance measurement and problem-solving. Leadership, on the other hand, is a process targeted at aligning employees to the objectives and vision of an organisation through effective communication, coaching, motivation, and inspiration (Ratcliffe 2013). If an organisation runs effectively, management and leadership coexist and contribute to one another. How an organisation chooses to balance between leadership and management depends on the nature of the environment in which operates.
In the economy where value comes from the knowledge of customers and employees, there is no point in separating management from leadership. More often than don’t, employees look to their managers as not only employers who assign different tasks but also as leaders that will define the purpose of their work, inspire, and motivate. Today, managers are not only responsible for organising workers for increasing their effectiveness but also for nurturing their skills, developing talent, and inspiring to reach organisational aims (What is the difference between management and leadership 2016).
Theory Analysis: Transformational Leadership
The theory of transformational leadership has become popular in the recent decade due to the increase of importance of business leaders being able to motivate and inspire their employees. Transformational leadership can be found at any level of an organisation (teams, departments, etc.). Such leaders are usually visionary, inspiring, and thoughtful. In order to bring significant changes in their organisation, transformational leadership should exhibit:
- Inspirational Motivation: transformational leadership requires the promotion of mission and vision that are compelling enough so that every employee know what they are required to do.
- Intellectual Stimulation: transformational leaders are effective in encouraging their followers to be creative and innovative in accomplishing their objectives. As a rule, transformational leaders do not criticize their followers in front of others and focus on the “what” in issues.
- Idealised Influence: transformational leaders believe that they have the power to influence their followers when they practice what they preach. In this case, leaders should become role models that followers should emulate. By doing so, leaders can win respect and trust from their followers and establish closer relationships with them.
- Individualised Consideration: transformational leaders play the role of mentors for their followers and encourage innovation and creativities. In this instance, followers get different treatment in accordance with their knowledge and talent.
Transformational versus Servant Leadership
To understand the concept of transformational leadership better, it is important to compare it with servant leadership. According to Stone, Russel, and Patterson (2003), the focus of servant leadership on others rather than on self, which means that a servant leader is the one that meets the needs of followers as the prime motivation for all actions. A servant leader is the one that develops their followers, helping them to strive and become more effective.
To some, servant leadership may seem as similar to that of transformational; however, there are some differences that help distinguish the two. If to compare the attributes of transformational and servant leadership, the two styles have analogous characteristics because both of them are people-oriented. Both leadership frameworks incorporate such qualities as influence, vision, respect, trust, delegation, modeling, and integrity, as found by Stone, Russel, and Patterson (2003).
Despite the similarities, there is one primary difference that separates the two frameworks and makes transformational leadership unique. While both transformational and servant leaders show concern for their followers, the servant leader is only focused on providing service to his or her followers. On the other hand, a transformational leader is more concerned with getting the followers to engage into the achievement of organisational goals. Therefore, the extent to which a leader is capable of shifting the primary focus of the leadership from the organisation itself to followers is the factor that distinguishes transformational leaders from servant ones.
In the case of transformational leadership, the leader is solely focused on the organisation, as well as how his or her behaviour can contribute to employees’ commitment towards reaching the set goals. Contrast to others, transformational leaders motivate and inspire others to achieve higher performance for the common good. In this scenario, the development and empowerment of followers are secondary since the key objective is the accomplishment of the established goals.
Nevertheless, the result is always associated with improved performance of employees. Thus, it can be concluded that both servant and transformational leadership are the most advanced leadership approaches since they both emphasize the importance of followers’ development when it comes to performance. Although, transformational leaders are far more focused on the performance since they are concerned about reaching the organisational objectives.
Research on Transformational Leadership
Educational context
Luft (2012) focused on studying the concept of transformational leadership within the educational practice, which is an area where leadership approaches make a tremendous difference in the performance of followers. The researcher hypothesized that in the modern environment, educators could no longer teach students what they have to know; rather, educators should teach students the value of knowledge, which is an important point in the transformational approach towards leadership. In the context of education, transformational leadership needs to include several aspects of influencing students positively.
First, the quality of relationships between students and institutions should be grounded on the perception that the end goal is important to both stakeholders. Transformational leaders will understand the imperative for developing close relationships with stakeholders who can add value to the process of education. Second, close relationships established between leaders and stakeholders can create more opportunities for students with regards to gaining new knowledge and experiences (Luft 2012).
Therefore, there are numerous implications for using transformational leadership in modern schools. The approach offers the sphere of education a perspective on alternative methods to evaluate what is already known and what students should be able to do. When educational leaders successfully broaden the interests of the staff and students, all stakeholders eventually receive benefit that is passed on further.
Mora (2011) studied the ways in which transformational leadership could contribute to transformational change in education. The researcher identified that positive changes in an educational setting could be attributed to specific behaviours associated with transformational leadership, such as:
- Higher standards of performance that align with the internationally accepted standards. Educational institutions face problems with their performance levels when there are inconsistencies in how the international guidelines regulate their effectiveness. By applying transformational leadership, educators will be able to motivate staff and students to align the established objectives with the universally accepted rules for enhanced performance and consistency (Mora 2011).
- A more cohesive definition of educational quality. The transformational approach towards leadership within the educational setting should be honest about the level of quality of education. Later, on the basis of the quality assessment, it should develop an innovative long-term solution for tackling any issues (Mora 2011).
Healthcare context
Application of the transformational leadership style within the context of healthcare has been examined by Choi, Goh, Adam, and Tan (2016). Since nursing staff turnover remains one of the major problems in the sphere of healthcare, the authors decided to study the impact of transformational leadership on employees’ satisfaction, empowerment, and retention. A survey that collected data from 200 professionals in the field of nursing showed that empowerment mediated the influence of transformational leadership of nurses’ job satisfaction. Also, it was found that employee empowerment is a transformational leadership characteristic that is essential for enhancing nurses’ job satisfaction and retaining them in their positions.
Gousy and Green (2015) investigated the concept of transformational leadership within the context of developing a nurse-led clinic. Since health care services and patients’ needs are always changing and evolving, nurses appear on the forefront of change implementation, even though their views may not be taken seriously by the senior management. Thus, it is important for healthcare providers to investigate new ways of delivering quality care to patients. In this case, transformational leadership is a solution that will engage all team members on an emotional and intellectual level to achieve the set objectives.
Business context
As to the research on the topic of transformational leadership, studies have aimed to investigate the impact of the leadership style on the performance of workers, organisational culture, as well as overall effectiveness. For example, the research by Chou, Lin, Chang, and Chuang (2013) explored the relationship between transformational leadership stupe, cognitive trust, and collective efficacy. The study concluded that cognitive trust leveraging is a skill that a team leader should have; however, it will be insufficient for achieving improved collective efficacy, and, in turn, the improvement of team performance.
Seidman and McCauley (2011) explored the concept of transformational leadership in a transactional environment, suggesting that when leaders act transformationally, they can improve transactional performance. Authors stated that transformational leadership is a holistic style that required an individual to have a balance of unique skills, experience, and knowledge that the majority of other people do not have. According to Seidman and McCauley (2011), a transformational leader should be able to:
- Create and effectively communicate a bright vision of the future in order to inspire as many followers as possible to improve their performance;
- Develop a team of professionals, each of whom will make significant contributions to their knowledge and skills;
- Manage and organise the team through maintaining balance between support and motivation;
- Achieve “transactional excellence while the transformation is in process” (p. 47).
The recent advancements in the development of leadership suggest that there should be two approaches for establishing transformational leadership within organisations: leading a single initiative and developing core competency. Leading a single initiative is an approach associated with having an impact on the style of transformational leadership for a one-time initiative for improving performance (e.g. an initiative for improving the quality of customer services).
Developing core competency is an approach in which the development of transformational leadership as the primary competency of an organisation, in which “every worker makes a contribution to the transformational transformations” (Siedman & McCauley 2011, p. 47).
If to review the two approaches, the first one is more narrow-focused and tactical; also, it providers leaders with an advantage of demanding less from their organisations. On the other hand, leading a single initiative is an approach that produces a more limited impact on organisational performance. The second approach is more complicated for leaders to achieve since it requires the management to be more committed. On the bright side, transformational leadership as a core competency has many long-term advantages for organisations that are forced to operate in an ever-changing business environment.
When speaking of any transformation, even in the case of a mundane “quality improvement of customer service” for a fast food restaurant, the management must develop a compelling vision of the future and motivate employees to achieve the set goals and adopt a change that will result in a quality improvement. Nevertheless, contrast to traditional approaches that depend on formal organisational leadership, transformational leadership requires leaders to create a vision of success of the initiative, which is organically provided by the positive deviants of the organisation (Pascale, Sternin & Sternin 2010).
Such positive deviants are employees that have a pattern of outperforming others, even when they have the same obstacles and resources as others. Employers appreciate them for their positive energy, outlook on work, and overall effectiveness. Specifically, positive deviants in a workplace setting organise their skills and performance into four domains (passionate commitment, roles and actions, risk management, and supporting resources) for creating a passionate vision of success (Siedman & McCauley 2011). It can be concluded that positive deviants can become the most effective transformational leaders.
Transformational Leadership, Motivating and Sustaining Change
Organisational change requires both leaders and followers to embrace change, which is an attitude found in transformational settings. The majority of what differs transformational leaders from others is their ability and the desire to encourage others to change for the sake of organisational improvement. In the past, motivation and encouragement in the interests of improvement were achieved predominantly through leaders’ influence, which meant that any transformation largely relief on the capabilities of one individual. Fortunately, positive visualisation and fair process allow organisations to substantially reduce the necessity for a personal influence, which, in turn, makes it more possible for leaders to achieve transformational inspiration.
Research concerning process research found that people give better responses when they are treated with dignity and respect during the process of change, which is a quality that transformational leaders have. Therefore, when an organisation gives employees an opportunity to achieve the positive social good, they often feel that their leaders honor their ability to contribute to the common goal. For instance, customer service specialists that face constant struggles of defending other workers from dissatisfied customers can positively meet the suggestion of improving collaboration with customers.
Employees can meet such a change with an increased willingness to make a positive change (Siedman & McCauley 2011). It is important to mention that the impact of fair process on motivation within the transformational leadership framework is usually multiplied when employees regard themselves as respected and effective positive deviants. Such a positive visualisation increases the positive thinking and enhances workers’ willingness to learn and the ability to improve.
As it has been identified how a transformational leader can motivate change, it is imperative to determine how the change can be sustained. Surprisingly, to sustain change, minimal leadership involvement is needed when an organisation has already established a positive outlook. In this case, the fundamental principle of neuroscience can be applied; it is as follows “neurons that fire together wire together” (Ware n.d., para. 4). If applied to the discussion about transformational leadership, the more frequent and consistent leaders are in their practice, the better they can sustain positive change. Every day, each employee in an organisation is required to complete learning experiences that teach them how to become transformational until they become successful in functioning without the support of a leader. In this context, a regular transactional environment is nurtured in order to create a transformational one (Siedman & McCauley 2011).
Effectiveness of Leadership Selection and Training
Transformational business leadership can lead to some dramatic changes in goals and direction. The effectiveness of leadership selection and training will depend on whether the organisational leader has a clear vision of the company’s future and can effectively communicate it to employees and inspire them to make the future a reality. In the majority of instances, the effectiveness of transformational leadership training intervention has been studied from three distinct perspectives, such as subordinates’ task performance, effect of training on employees’ attitudes, and the impact of the training on the financial performance of a firm.
According to Rasool, Bashir, and Azam (2010), employees that work under the leadership of an individual that exhibits individualised consideration are more likely to show lower performance compared to those working with a charismatic leader. The effectiveness of transformational leadership training can be evaluated through employees’ reaction, performance, and behaviour (Rasool, Bashir & Azam 2010).
Rasool, Bashir, and Azam (2010) conducted a study for determining the effectiveness of transformational leadership selection and training within an organisation. The results showed two key outcomes: a positive relationship between pre-training motivation and training effectiveness and the beneficial impact of transformational on overall employees’ performance. It was concluded that in order to achieve effective transformational leadership training, organisations should pay attention to employees training motivation – the higher it is, the increased the likelihood of training succeeding.
If to evaluate possible implications of changes in the field of people management and leadership in the context of the transformational approach, it can be asserted that core leadership functions such as goal setting, motivation, delegation, and communication are the highest on the corporate agenda. The current business environment makes it more complicated for leaders to perform their core tasks due to the need to adapt to rapid changes.
As a result, leaders will find themselves in a position of having to operate a business with less time but with a more complicated environment and structure. Moreover, managers will be required to identify the processes done inefficiently as well as the functions that need to be prioritised over others (UKCES 2014). In such a hectic environment, leaders are required to develop transformational skills to delegate their work to employees while inspiring and motivating them to achieve organisational success. To do this, leaders must communicate clearly, plan in advance, and deal with conflicts, which are three skills that the many managers do not do well.
Rapid changes in human management have shown that many leaders lack understanding of the role human resources play in accomplishing organisational goals. Despite the fact that the modern business environment has changed dramatically and thus skills required for leadership has also changed (i.e. leaders have to be more adaptive thinkers), methods and tools used for developing leaders have not changed. The majority of current managers have developed their leadership skills through practical experiences, coaching, and mentoring however, there is a need for them to develop faster to match the current environment. If to mention other implications of the changes in leadership development, the following four trends stand out the most:
- Focus on vertical development. In the past, organisations have spent a lot of time on horizontal development (competencies), which is usually earned from an expert. The environment has changed, and now there is a requirement for earning development and progress for oneself (Petrie 2015).
- Transfer of greater developmental ownership to the leader. This trend encourages leaders to be responsible for their development and commitment to organisational goals.
- Increased attention to the collective than individual. Leadership development has become to individually focused, which is inherent to dictatorship. The changes in leadership training and development call for the shift from individual to collective for organisations’ workers to reach the set goals (Petrie 2015).
- Emphasis on innovation with regards to leadership development. Technology is a tool that will provide leadership development with an infrastructure for driving change.
Thus, to sustain the continuous improvement of their organisations, leaders need to be aware of all tools that will help them sustain the existing management systems. With the help of those tools, they are required to create an environment of effective problem-solving at all levels and the model new behaviours to support the open environment. However, no leadership practices can be achieved without practice; leadership courses and training are needed to educate leaders on the ways in which they can become more effective in inspiring and motivating others to accomplish organisational goals.
Contextualisation of Transformational Leadership Selection and Training
If to provide a context for transformational leadership selection and training, the example of Ceridian can provide some insights into how a company can use this new leadership style to become more competitive. Ceridian (established in 1992) is a private provider of HR software and services to organisations. According to Efron’s (2016) article in Forbes, when Ceridian’s sales and profits started falling, the management implemented a short-term tactic to push employees to work harder for achieving better results. In return, the tactic only decreased workers’ motivation and engagement.
To deal with the reduced motivation, the management at the company created a program called top talent, which was targeted at improving interactions between employees and their leaders. Under this initiative, workers were encouraged to offer ideas of improvement, which were later assessed by the senior leaders of the company. The most promising ideas were funded and implemented. Moreover, Ceridian introduced coaching programmes for teaching leaders on how to communicate effectively. New leaders were interviewed on their skills of effective communication and managing change in order to determine their commitment to organisational goals. Moreover, there is no “executive floor” in Ceridian, which is characteristic of a transformational approach towards leadership within the organisation.
The example of Ceridian shows that despite the fact that a company managed to successfully establish a brand around delivering reliable services, without a clear definition and a unique leadership strategy, it will be impossible to implement change successfully when sales decline. As the result of transformational leadership implementation, the management came to a conclusion that the core purpose of any improvement should be associated with enhancing the work life for employees who can make significant contributions into how the business should be managed for being competitive and satisfying customers. In the case of Ceridian, transformational leadership helped the company to make a successful shift from individual to collective thinking, where each employee has an opportunity to contribute with innovative ideas.
According to the employee survey conducted in Ceridian, workers knew the organisational values but could not identify them, which was a large issue. Moreover, employees did not agree with the statement that their company was following those values since there was no clear identification of the purpose. To deal with this, the management applied the transformational leadership approach and clearly defined the values that the organisation had to follow.
The first value was associated with the focus on customers, which required employees to listen carefully to clients’ needs and decide how to cater to them. The second value was centered on transparency and open communication while maintaining a high level of integrity for making sure that all workers were accountable for their behaviours. The third value was associated with optimism and achieving success. Lastly, Ceridian also introduced the value of agility, which allowed workers to be prepared and enthused for new challenges.
A clear vision of the goals allowed Ceridian to become more effective in providing reliable HR solutions to their customers. By engaging employees in conversation and encouraging their creativity, the company developed an effective team of professionals who knew their job and were excited about new challenges.
Despite the fact that it was often complicated to move employees to new roles or eradicate them, the management used transformational leadership to stay true to the established values and create an environment where leaders interacted with workers on a daily basis to communicate a clear vision of their goals. Overall, approaching leadership from a transformational perspective is beneficial for businesses that lost their vision and focused on leaders instead of employees. The example of Ceridian proved that the changes in the modern business environment require businesses to be more innovative in their approach for sustaining competitiveness and providing valuable services to customers.
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