There is a lot of buzz around transformational leadership, and for a good reason. It is all about shifting your perspective as a leader to become more people-centric, thus making them the centre-piece of your business growth strategy.
In a nutshell, transformational leadership is a leadership style that focuses on inspiring and motivating employees to achieve their full potential. It is characterised by a leader who is passionate about their vision and the ability to inspire others to work towards that vision. Transformational leaders are able to create a positive and empowering work environment, which leads to increased employee engagement, motivation and productivity. This is the mantra that everyone aiming to be a successful entrepreneur must embrace as quickly as possible.
For businesses, transformational leadership can lead to improved performance, increased employee satisfaction and retention, and a more positive company culture. One study found that transformational leaders were able to improve their teams’ performance by 78.1%.
Transformational Leadership: Six Steps to Supremacy
So, how can you become a transformational leader? In order to completely understand the steps at play, one must dive deeper into the four components of transformational leadership:
- Idealised influence: A good transformational leader knows how to walk the talk. They become role models who bring about a change in attitude, culture and work ethic simply by exceeding expectations and setting the right example.
- Intellectual stimulation: Intellectual stimulation is the hallmark of every successful entrepreneur. It involves encouraging your teams and employees to think creatively to kickstart an innovation pipeline at the organisation.
- Inspirational motivation: Knowing what motivates your employees and how to put it to the best use to drive them is the key to success as a transformational leader. Inspirational motivation comes from providing employees with a deeper sense of purpose at work.
- Individual consideration: The last component of transformational leadership is the ability to provide time and support to every individual in your team. This allows leaders to unlock their organisation’s true human resource potential.
So, how can global and Indian entrepreneurs put the components of transformational leadership into play and become transformational leaders? Here are six steps you can take:
- Provide your employees with time, resources, mentorship and platforms to succeed: Transformational leaders prioritise understanding their employees’ needs, goals and aspirations. This allows them to provide the necessary support and resources to help their employees achieve their full potential. A study by Forbes found that companies that invest in employee development outperform their peers by 2.3 times.
- Align people with a long-term, value-driven vision: Transformational leaders have a clear long-term vision and are willing to go the extra mile to achieve that vision. To bring employees and key stakeholders on their side, they try to find common threads that connect their vision with the goals and ambitions of the people they work with. Doing so leads to the creation of intrinsic motivation within the employees to deliver results, leading to improved business performance and employee engagement.
Famous finance personalities in India like Sanjiv Bajaj are known for taking a long-term approach to business growth, made possible by hiring the right people and then aligning them to their vision according to their strengths. As the Chairman and Managing Director of Bajaj Finserv, Sanjiv Bajaj has been instrumental in innovating in the fintech category in India, thus bringing the convenience of digital finance to the masses. Key to it has been empowering his teams and linking their performance to huge incentives. This rewarding system and a nation-centric vision to build a more financially independent and empowered India have been excellent motivators for Bajaj employees over the years.
- Create a support-oriented culture of recognition: Transformational leaders recognise and reward their employees for their hard work and achievements. This can include providing opportunities for career advancement, offering bonuses, and providing recognition through employee awards. Creating a culture of meritocracy and an open-door policy is, therefore, vital for success.
- Become more adaptive and open-minded: Transformational leaders are able to adapt to change and are open to new ideas and perspectives. They encourage their employees to be creative and think outside the box, which leads to more innovative solutions and improved business performance.
Industrial and financial leaders like Uday Kotak – the Executive Vice Chairman and Managing Director of Kotak Mahindra Bank – have regularly emphasised the quality of thinking outside the box and grasping opportunities in advance. For him, the key difference between success and failure is how well you adapt to and execute such opportunities. This has been a crucial success mantra for Kotak Mahindra Bank, which has embraced digital transformation at a rapid pace to become one of the most sought-after consumer-centric banks in India today.
- Set the bar high: Transformational leaders set high expectations for their employees and provide the necessary support and resources to help them achieve those expectations. They also hold themselves and their employees accountable for meeting those expectations. This creates a culture of excellence and drives employees to strive for improvement constantly.
- Walk the talk to influence people positively: Transformational leaders lead by example and are able to inspire others by demonstrating the values and behaviour they expect from their employees. Famous Indian entrepreneurs like Ratan Tata, Mukesh Ambani and Narayana Murthy have all been cited as examples of transformational leaders who lead by example.
In conclusion, becoming a transformational leader requires a commitment to investing time in your employees, acting as an influential role model, being supportive and providing recognition, setting high expectations, being adaptive and open, and aligning everyone to a long-term vision.
While that might sound a lot, developing basic empathy and a human-centric attitude will make all these things come naturally to you. This change in leadership perspective is why so many Indian entrepreneurs and financial leaders have been able to script their success stories!
By adopting these mantras into your leadership style, you can become a transformational leader and drive improved business performance, increased employee satisfaction and retention, and a more positive company culture.