What is transformational leadership and How Do Transformational Leaders Inspire Their Team?

Transformational leadership offers business leaders and managers a leadership style designed to offer inspirational motivation to the workforce. 

In this article, we’ll explore the transformational leadership skills necessary to unify employees behind a unique vision of the future, incorporating their core strengths and fully developing their potential talent stacks.

Defining transformational leadership

Transformational leadership is an approach that seeks to create employees capable of leading the company in new and innovative directions. For this approach to be successful, it needs to be embodied at all levels of the organisation, from the CEO down, and as such should be a central element of a company’s culture.

Another core aspect of transformational leadership is its emphasis on inspiring autonomous behaviour from employees. By empowering employees to creatively approach problems to find innovative solutions, it removes any elements of leadership that may result in micromanagement. 

Transformational leadership has been around for many years, although it wasn’t until the 1970s that it was named as such. The charismatic leadership psychologist, Hames V. Downton, first explored the concept in 1973, with additional research in the 1980s from researchers such as Bernard M. Bass expanding on methods for measuring the success of transformational leadership.

Let’s take a look at the components and effects of transformational leadership in more detail.

Components of transformational leadership

There are four core components of transformational leadership, often referred to as the four “I’s”. Let’s take a look at each of these in turn.

The four "I's" of transformational leadership

Inspirational motivation

Transformational leaders are those who offer inspirational motivation to their employees, creating a clear vision of what success looks like and how to accomplish it. This vision gives everyone in the company a sense of purpose and helps to foster a passionate approach to the work being undertaken.

Inspirational motivation requires a clear and consistent communications system to make sure the messaging reaches everyone it needs to. The tone of communication is also important, with an effective leadership style capable of articulating the vision in a way that brings everyone together.

This messaging needs to be upbeat and motivational without losing the sense of authority a great leader should embody. They should demonstrate confidence in their vision, maintaining an optimistic outlook that encourages positivity. They should also show an interest in the input of all members of staff, as well as an appreciation for, and recognition of, the efforts of others.

Individual considerations

An effective transformational leader needs to understand what motivates each individual team member they are in charge of. By understanding their strengths and weaknesses, they can more effectively guide their career development in a way that is fully aligned with the company’s vision.

A transformational leader will consult with their employees to help narrow down what motivates them to succeed and where their core skills lie. This strategy seeks to motivate the employee by linking their professional growth and skills with the overall vision of the company, giving them the resources necessary to develop a unique talent stack.

Idealised influence

The essence of idealised influence requires the transformational leader to serve as a positive role model, embodying the qualities expected from others. It is the business world’s equivalent of the principle often misattributed to Gandhi, which encouraged people to “be the change they want to see in the world”.

Inspirational leaders are ones who “walk the talk”, showing others how things should be done rather than simply telling them and hoping for the best. Such leaders are often charismatic and enthusiastic, with a genuine commitment to the behaviours and ideals they encourage in others. Ultimately, idealised influence builds trust and strengthens relationships. Employees know that their leaders are on the same page and equally invested in the outcome.


Intellectual stimulation

The final “I” of transformational leadership is intellectual stimulation. This means enabling managers to use their leadership skills to foster innovative and creative thinking in the workforce while encouraging all-around higher levels of performance.

This requires a mindset in which the established status quo can be challenged, with an open-minded approach to developing new modes of working and the exploration of new methods for learning. Organisational procedures and practices should be regarded as fluid and evolving systems that can benefit from the collective brainstorming encouraged by transformational leadership.

What are the effects of transformational leadership?

Transformational leadership can have a variety of effects on the workforce, with numerous studies outlining these effects in detail. For example, a study from the Future Business Journal explains how:

“Transformational leadership directly exerts its influence by helping employees or followers to think more positively about themselves and their tasks, by enhancing the quality of their relationships, and by creating environments that are fair, respectful, and supportive and all of these factors contribute positively toward employee’s self-motivation toward his/her work (i.e., intrinsic motivation).”

The benefits of transformational leadership

Additional studies have indicated that transformational leadership:

  • Stimulates employees’ enthusiasm and initiative
  • Helps leaders establish an exciting vision of the future
  • Increases confidence and optimism
  • Enhances the sense of team spirit
  • Increases employees’ level of commitment
  • Assists with setting challenging yet achievable goals

In short, transformational leadership skills are a source of inspirational motivation for the workforce, empowering them to work with confidence and deliver their best possible work.

Transformational leadership’s link to well-being

Employee well-being has become one of the top priorities for business leaders in the wake of the COVID-19 pandemic. Transformational leadership skills can be used to help encourage and improve well-being throughout the workforce. 

Transformational leadership can supplement a range of other approaches to well-being. This can include occupational health protocols, development-based performance management, and team-building exercises.

The essential nature of transformational leadership, which seeks to foster creativity, drive engagement around cultural narratives, and develop employee strengths, is itself designed to drive well-being. 

A study from Linnaeus University, Transformational leadership and well-being: The mediating role of trust in leadership, meaningfulness and job satisfaction, concluded:

“The results suggest that it is possible to increase employees‘ well-being, through leadership development interventions which effects employees‘ perceptions of their psychosocial work environment. Organisations and employees can benefit from leadership training, which focus on applying positive TL behaviours e.g. communicating a shared vision.”

Additional studies have further acknowledged the relationship between the positive mental health effects associated with the implementation of transformational leadership by:

  • Showing care and consideration for employees and developing trust
  • Creating a positive working environment
  • Empowering employees to believe in themselves and overcome any challenges they face

What are the characteristics of a transformational leader?

Transformational leaders seek to inspire their employees to help the company excel over the competition through innovation and creativity. But how do they achieve these goals? Pinning down the essential characteristics of transformational leadership can be tricky. Many companies claim to be transformational, while ultimately offering nothing new.

The article from the Harvard Business Review, What The Best Transformational Leaders Do, outlines three core characteristics that transformational businesses embody: new growth, core repositioning, and strong financial performance. 

Characteristics of a transformational leader

Transformational leaders who lay the groundwork for growth while repositioning the company and delivering exceptional financial performance:

  • Drive engagement through culture. Transformational leadership is most effective when the principles of innovation and creativity are embodied in the company’s culture. This means establishing modes of practice that allow for employee innovation at all levels, as modelled by the company’s executives and owners. Establishing systems to allow for culture feedback can further enhance and clearly define these cultural values.
  • Create powerful narratives surrounding the company’s vision. A strong vision of the company’s true potential and what future success looks like gives employees something to rally behind. Transformational leadership means clarifying this vision and disseminating what it means throughout the workforce so everyone has a shared vision of success.
  • Adopt a dual transformation approach. Without proper care and attention, attempting to transform a company without a new plan in place can lead to disaster. Consequently, a great transformational leader understands that implementing a new vision for the company requires the preservation of the existing business model while actively investing in new products and services.

Examples of transformational leaders

There are many examples of exceptional transformational leaders in the business community, many of whom are household names. These leaders have helped transform their organisations into world-class institutions capable of setting new industry trends and best practices.

Henry Ford 

Transformational leadership has been around for many decades, as the motor company magnate Henry Ford demonstrates. Ford’s vision of a commercialised car manufacturing process changed the way production lines operate and made the mass production of cars a reality. 

His business philosophy, encouraging people “to do more for the world than the world does for you” is a fine example of the kind of galvanising mindset required by transformational leaders.

Steve Jobs

Steve Jobs may have initially been criticised for his authoritarian approach to leadership when he first took on the role as head of Apple, but his later career was characterised by transformational leadership. Indeed, his approach to creativity and the way in which he bought key staff under his visionary guidance led to the creation of some of the most iconic – and best selling- products in the industry.

Jeff Bezos

Online retail was in its infancy when Jeff Bezos decided to radically transform the way things operate, turning Amazon into the world’s leading digital store. His leadership style has been characterised as “creative”, “visionary”, and “passionate”, in a way that encourages innovation and out-of-the-box thinking. 

How to become a transformational leader

Transformational leaders understand the necessary mindset and behaviours required to foster creative thinking, autonomous behaviour, and consistent communication. Here are some ways you can approach becoming a transformational leader:

How to become a transformational leader

Build trust-based relationships with your people

A transformational leader is only effective when they can build trust with their employees. This trust is not only between individuals and the transformational leader themselves but also trust between employees and their colleagues and peers.

Employees trust transformational leaders when they consider them to be authentic in both their words and actions. Transformational leaders aren’t viewed as typical managers who are going through the motions; instead, they are seen as genuinely interested in the development and success of their employees and take an individualistic approach to each member of staff.

Create an inspiring vision

In order for employees to perform at the top of their potential, they need an inspirational vision to get behind. This vision should be one that is firmly rooted in the company’s overall mission and values, going above and beyond the basic function of the company and touching on something more meaningful.

For this vision to truly unify employees and get them behind a transformational leader, it needs to be a shared vision that encompasses their personal and professional ambitions. If it is to be truly effective, it should be clearly embodied in the company’s culture and branding, so that all employees are on the same page when working towards shared goals.

Motivate people to buy into and deliver the vision

Encouraging others to both buy into the vision, and work towards achieving it, is at the core of a transformational leader’s daily activities. Providing resources, offering the necessary training and coaching, and helping employees communicate new ideas are all important methods for bringing this degree of motivation to the table.

Manage the delivery of vision

Finally, a transformational leader needs to help manage the delivery of the vision, breaking it down into practical and actionable steps that can be easily measured. This can mean setting up key performance indicators (KPIs) or objectives and key results (OKRs) directly relating to the core vision and what its successful implementation might look like.

In Summary

Transformational leadership offers business leaders a powerful approach to developing leadership skills to bring out the best performance from their employees. 

This guide demonstrates how a transformational leadership approach can help foster creative and innovative thinking, while also serving to improve employee well-being and unify employees behind a common vision.