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4 Modern Leadership Theories and Transformational Leadership

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Learning Objectives

After reading this chapter, you should be able to:

• Consider implementing servant, positive, and principle-centered leadership principles. • Explain the key principles of charismatic leadership. • Understand transformational leadership. • Apply transformational leadership principles.

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Introduction

Introduction

When Tony Hsieh took over as CEO of Zappos.com, the company was bringing in $8 million in revenue a year and was clearly underutilizing the potential Hsieh believed the company had. Zappos offers many brands of shoes from different companies that consumers can obtain through the Zappos website. Hsieh was committed to building a company that was not only successful financially, but was also a great place to work and to do business with. He began to build the company around the unique philosophy that if you get the culture right, most everything else will fall into place.

How did Hsieh transform Zappos? He created a fun and quality place to work and provided exceptional service for customers. Hsieh used specific actions to transform Zappos. He set an example for being an open and approachable leader who involves people at all levels in the change process. He ensured that leaders at all levels received training on the Zappos culture and what it takes to achieve the Zappos goals. Employees take the core values of the company seriously, and they guide the actions and decisions of everyone in the company. The culture is a zany one characterized by a relaxed but hard-working, family-like environment with free ice cream, snacks, and lunch; the freedom to colorfully decorate offices; and occasional parades and numerous other forms of celebrations and activities. Employees receive training on a customer-focused strategy that emphasizes personalized contact with customers and the freedom to make decisions and dialogue without scripts. Management recruits new employ- ees based on a fit with the culture, and they then receive extensive continued training to grow in their skills. Hsieh designed the HR and management practices to support and reinforce the type of organization he is trying to create.

The results? Within 8 years of Hsieh taking over, the company went from $8 million in annual revenue to more than $1 billion. Fortune magazine consistently ranks Zappos as one of the 100 best companies to work for. Employee turnover averages about 7% in an industry that averages more than 150% a year. Zappos receives hundreds of applications for every open position. Hsieh is a transformational leader who is effective at creating a compelling vision, inspiring people to perform at a high level, and using specific actions to drive change and transformation.

In the previous chapter, we noted that the impacts of history and improvements in research methods influenced the development of leadership theory. Factors such as political, social, economic, and technological change have altered the landscape and moved theories from relatively simple, one-size-fits-all approaches to more complex situational and contingency models. As the last half of the 20th century concluded, various academics and individuals in the workforce had noted that other elements of leadership deserve attention.

This chapter begins with presentations regarding some of the modern theories that received notice in academic circles, in popular press, and by practicing managers. The first section of this chapter examines three approaches: servant leadership, positive leadership, and principle- centered leadership. The second section presents charismatic leaders.

Further, in times of dynamic change, ever-increasing competition, and the need to do every- thing more effectively and efficiently, many argue that an urgent need in organizations of all types and sizes for leaders who are not only skilled at leading but who are also skilled

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Section 4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

at transforming, changing, and preparing organizations to succeed has grown. Incremental change and modest improvements may not be enough for some organizations to succeed.

Therefore, the final part of this chapter presents the historic and latest thinking on trans- formational leadership and adds an important dimension regarding what transformational leaders need to know about managing change and what it takes to transform organizations. Previous literature has predominantly focused on the characteristics of transformational leaders, the results of transformational leadership, and when to use transformational leader- ship. Unfortunately, the actual skills involved in managing change and transforming organiza- tions are seldom addressed. Consequently, these issues receive special attention here as well.

4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

Past approaches to leadership theory largely paid attention to a few key ideas. The first group concentrated on the traits and characteristics that successful leaders exhibit. Then, theories that began with the idea that a leader should be mostly attentive to people or production or in some cases both took center stage. Finally, the situational and contingency models inte- grated the leader, the followers, and the situation into one overall model. These approaches left many issues related to leadership unobserved.

In this section, we propose three recent views of leadership. They include servant leadership, positive leadership, and principle-centered leadership. These newer approaches add insights and ideas into factors that logically contribute to an individual’s success (or failure) in a lead- ership role.

Servant Leadership

One could make a case that the earliest theories were somewhat authoritarian, with the leader in charge and success dependent on that person’s skills. The next evolution took more of a participative approach with more involvement of the followers. Then a new viewpoint emerged combining both performance and people. In that era, leaders needed to be both results oriented and people oriented. Leadership writers emphasized empowering employ- ees, where much of a leader’s responsibility was to develop and utilize followers. As leader- ship thinking shifted from an analysis of leaders to a combination of leaders and followers to a greater weight given to followers, the introduction of servant leadership created a new way of thinking about leadership that took the focus on followers and service to a whole new level.

In 1970, Robert Greenleaf presented many original concepts in The Servant as Leader. Ser- vant leadership stresses serving others; placing the needs of others above your own; helping others learn, grow, and develop; and seeing a leader’s primary role as servant to employees, customers, shareholders, communities, and the general public. Greenleaf offered four basic precepts in his servant leadership model, as displayed in Figure 4.1.

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Put service before self-interest

A servant leader is more concerned about helping and serving others than

personal success, status, financial rewards, or power. Organizations

exist to benefit employees and others, not just for financial gain. Leaders are

committed to doing what is right no matter what the cost.

Listen first to build confidence in others

Instead of imposing their will on others, servant leaders are committed to listening

to others and discovering their needs and concerns and what it will take

to make them successful.

Inspire trust by being trustworthy

Servant leaders earn trust by being honest, moral, true to their words,

committed to focusing on the well-being of others, and

transparent in what they do.

Servant Leadership

Nourish others and help them become whole

Servant leaders genuinely care about followers and about

developing their full potential.

Section 4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

Typical characteristics of servant leaders include humility and selflessness, serving and developing others, emphasizing shared leadership, having a selfless love for others, valuing people, modeling integrity and authenticity, inspiring and influencing others, being honest and trustworthy, being a good steward, empowering others, forgiving others, consulting and involving others, and committing to building a sense of community (van Dierendonck, 2011). While individual scholars posit differing views of the characteristics of servant leaders, a gen- eral agreement includes the belief that servant leaders exhibit a desire or sense of calling to serve others; they build positive relationships with others and are committed to develop- ing the potential of others, and they anchor their decisions and actions in ethical and moral principles.

Servant leadership has received praise from a number of well-known leadership writers. In addition, supporting research indicates that servant-oriented behavior produces better results in employees and organizations. Servant leadership has been embraced as a guiding philosophy for many companies such as Service Master, Southwest Airlines, The Toro Com- pany, and Men’s Wearhouse.

Figure 4.1: Servant leadership model

Adapted from Greenleaf, R. K. (1970). The servant as a leader. Westfield, IN: The Greenleaf Center for Servant Leadership.

Put service before self-interest

A servant leader is more concerned about helping and serving others than

personal success, status, financial rewards, or power. Organizations

exist to benefit employees and others, not just for financial gain. Leaders are

committed to doing what is right no matter what the cost.

Listen first to build confidence in others

Instead of imposing their will on others, servant leaders are committed to listening

to others and discovering their needs and concerns and what it will take

to make them successful.

Inspire trust by being trustworthy

Servant leaders earn trust by being honest, moral, true to their words,

committed to focusing on the well-being of others, and

transparent in what they do.

Servant Leadership

Nourish others and help them become whole

Servant leaders genuinely care about followers and about

developing their full potential.

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Section 4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

The major concerns with this theory primarily relate to the difficulty in clearly defining and researching servant leadership and the concern that the way it is sometimes portrayed can take the focus on the servant role of leaders and empowered role of followers too far to be realistic, practical, and wise.

Positive Leadership

Kim Cameron introduced positive leadership in 2008 in his book by that title. The concept is clear, makes sense, and is supported by substantial research in the book. In the short time since

Dan Amos: A Profile in Servant Leadership

Perhaps the best example of servant leadership at the executive level is that of Dan Amos in his tenure of CEO at Aflac. Amos first joined the company in 1973 as a sales associate while in his teens. He served as state manager of Aflac’s Alabama/West Florida Territory for 10 years. Under his leadership, his sales territory was the number one producing area in 1981 and 1982. In 1983, Amos was named president of Aflac, and he became chief operating officer of Aflac in 1987. He became chief executive officer of Aflac Incorporated in 1990 and was named chairman of Aflac’s board of directors in 2001.

During Amos’s tenure as CEO, revenues at Aflac have grown from $2.7 billion to $22.7 billion as of December 31, 2014. Early in his tenure as CEO, Amos set a new standard for leadership when he insisted that the company’s stockholders vote on his compensation package. At that point (2005), he received a $1.2 million salary, $2.5 million as a bonus, and $2.5 million in stock bonuses. His voting program for the pay system was named “advisory role.” The level of pay stood in stark contrast to some of the exorbitant salaries given to much less successful executives in that time period.

In addition to his approach to pay, Amos helped Aflac establish Georgia’s largest in-house childcare facility, which was named “Imagination Station.” The Aflac company has received several awards as one of America’s top 100 family-friendly firms. Amos’s other works include efforts to incorporate other segments of society into the organization, which has led to Aflac’s recognition by Hispanic Magazine as one of the country’s top 100 employers for Hispanic citizens. The firm has also been recognized as one of the 50 best for minority workers.

Dan Amos does not operate entirely with altruism in mind. He believes in a strong link between pay and performance. His executive team is subject to the same pay votes from the advisory role played by stockholders. He treats all employees with response and care, believing such an attitude then translates into the type of relationships his workers will have with customers and the general public. The concept that servanthood gets passed along to others has served as his guiding principle for many years (ABC News, 2009).

Tomohiro Ohsumi/Bloomberg/ Getty Images

Dan Amos, chairman and chief executive offi- cer of Aflac, Inc., speaks during a news confer- ence in Tokyo in 2013.

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Section 4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

Cameron presented his ideas, the viewpoint has been subject to a number of research studies by Cameron and others suggesting that the theory has the potential to achieve exceptional results.

Positive leadership shows how to reach beyond ordinary success to achieve extraordinary effectiveness and what Cameron calls positively deviant performance, which means perfor- mance far above the norm. The positive leadership approach is part of the newly emerging fields of positive organizational scholarship, positive psychology, and positive change. Citing extensive research to support his claims about positive leadership, Cameron shows that to go from successful to exceptional, leaders must learn how to create a profoundly positive envi- ronment in the workplace. They must build on strengths rather than being preoccupied with weaknesses and take a positive approach to the various issues they face.

Positive leadership does not mean that you put a positive spin on things or that you avoid negative or difficult issues that need to be dealt with. Instead, it refers instead to how leaders deal with these issues along with learning how to build a positive organization. The concept is as much a philosophy about living as it is a philosophy about leading and can have a signifi- cant impact on both one’s professional life and personal life.

Cameron writes, “Positive leaders focus on organizational flourishing, enabling the best of the human condition, and creating exceptionally positive outcomes, not merely on resolving problems, overcoming obstacles, increasing competitiveness, or even attaining profitability” (2008, p. 13). He says that positive leaders employ the four positive leadership strategies displayed in Table 4.1.

Table 4.1: Positive leadership strategies

Cultivating a positive climate: The work climate, or work culture, as it is often called, can have a significant positive or negative impact on employee performance and morale. Leaders should build a work environment where employees have optimistic attitudes and cheerful outlooks. Leaders can do this by showing compassion (being concerned about others), forgiveness (dealing with issues and mistakes in helpful rather than harmful ways), gratitude (showing appreciation and thankfulness), and creating win/win situations as much as possible.

Developing positive relationships: Relationships affect every aspect of our lives including our mental, emotional, physical, and spiritual well-being and our effectiveness at whatever we do. Positive relationships are relationships that have a beneficial effect on people. They are a source of enrichment, vitality, and learn- ing. Leaders can do many things to build positive relationships but should particularly focus on developing positive-energy networks (finding positive people to relate to, encouraging and valuing positive behaviors, and creating opportunities for positive people to work together and influence others) and building on indi- vidual and organizational strengths (building on strengths rather than dwelling on weaknesses and turning difficulties into opportunities).

Using positive communications: The way we communicate is another central factor that affects all aspects of our lives and is critical to being an effective leader and person. Positive communications (using affirmative and supportive language rather than negative and critical language) is much more likely to build strong rela- tionships and result in higher-performing people and organizations than negative communications. Positive leaders become skilled at using positive communications by soliciting feedback on how they communicate and by practicing using supportive communications in dealing with both positive and negative issues.

Developing positive meaning to work: When people feel that they are pursuing a profound purpose or engaging in important work, performance, morale, dedication, focus, and loyalty all increase, and a preoc- cupation with negatives and organization weaknesses decreases. Leaders can add meaning to work by clarifying and emphasizing the benefits of the work that is being done to society or others, associating work outcomes with values important to employees, identifying the long-term impact of the work being produced, and by emphasizing the contributions that people and teams make that adds value to others.

Source: Based on Cameron, K. (2008). Positive leadership. San Francisco, CA: Berrett-Koehler Publishers.

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Organizational

Managerial

Interpersonal

Personal

Section 4.1 Recent Views of Leadership: Servant, Positive, and Principle Centered

Positive leadership theory suggests that individuals can learn to be effective and that the results of this approach in both one’s professional and personal life can produce remarkable results. There is a need for more study of this approach, although the early research has been mostly favorable.

Principle-Centered Leadership

Stephen Covey, author of the best-selling book Seven Habits of Highly Effective People (1989), also wrote a number of other top-selling books about leadership including the book Principled- Centered Leadership (1990).

In general, the media reports many stories about business and political leaders and leaders in almost every type of endeavor who have made serious judgment, moral, or ethical compro- mises because of a lack of principles, no matter what the cost. Covey advocates principled leaders of strong character who build sound principles into the way they lead and live both their work and off-work lives. He points out that when people have strong principles, they become more balanced, unified in their thinking and practices, anchored, grounded, and less likely to make compromises.

According to Covey, leaders prac- tice principle-centered leader- ship from the inside out on four levels, which we can see in Fig- ure 4.2:

1. personal (my relation- ship with myself and demonstrating that I am trustworthy);

2. interpersonal (my relationships and inter- actions with others and building trust with others);

3. managerial (my respon- sibility to get a job done with others and empower others); and

4. organizational (my need to organize people; to recruit them, train them, and compensate them; to build teams, solve prob- lems, and create aligned structure, strategy, and systems).

Figure 4.2: Principle-centered leadership

Principle-centered leadership is practiced from the inside out on four levels: personal, interpersonal, managerial, and organizational practices.

Adapted from Covey, S. (1990). Principle-centered leadership. New York: Simon & Schuster.

Organizational

Managerial

Interpersonal

Personal

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Section 4.2 Charismatic Leadership

Principle-Centered Leadership Practices Principle-centered leadership practices consist of the following:

1. Be proactive (take responsibility for your behavior, be a self-starter, make changes). 2. Begin with the end in mind (decide what you are going to do with your time, talent,

tools, and life). 3. Put first things first (lead a disciplined life that focuses on what is most important). 4. Think win-win (strive for mutually beneficial decisions and seek to make others look

good). 5. Seek first to understand, then to be understood (be an empathetic listener who first

tries to understand others before needing to be understood). 6. Synergize (work cooperatively together with others to find mutually agreeable

solutions). 7. Sharpen the saw (lead a balanced life of continuous improvement and self-renewal).

Covey notes that ineffective people are reactive and blame others, work without any clear end in mind, do the urgent things first, think win/lose, seek first to be understood, seek to win or compromise, fear change, and put off improvement.

In summary, these three theories of leadership stress the value of caring for your own per- sonal value set as well as the well-being of others. Evidence suggests that such a mindset bodes well for individual career success along with a better outcome for the company that you serve.

Self-Reflection Questions

1. A servant leader would be viewed as having the strength to empower and assist others. Can you think of items that others might perceive as weak- nesses in the same leader? Are these valid concerns? Defend your answer.

2. Name the ethical and business principles you believe are most important to being an effective principle-centered leader. Defend your choices.

4.2 Charismatic Leadership

As the latter half of the 20th century unfolded, new theories of leadership began to emerge. These approaches ranged in scope from those emphasizing leader activities (servant, prin- ciple centered) to other aspects of a leader’s responsibilities. In this section we will discuss charismatic leadership.

Charismatic leadership was first mentioned by Weber in 1947 and developed by House in 1976. Charisma is a Greek word that means “a compelling attractiveness or charm that can inspire devotion in others” (Stevenson & Lindberg, 2010). Charisma is considered a gift that some leaders have to inspire and motivate people. It can be effective when present in genuine, grounded leaders who have a strong sense of ethics and morality. Charismatic leadership

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Section 4.2 Charismatic Leadership

can motivate people to achieve at higher levels. The passion that charismatic leaders have for what they do can motivate people to commit to actions and perform at higher levels. Table 4.2 identifies key charismatic leader characteristics.

Table 4.2: Charismatic leader characteristics

Characteristic Description

Vision and articulation An idealized goal communicated to others

Personal risk Willing to take high personal risks and engage in self-sacrifice

Environmental sensitivity Makes realistic assessments about the environment and resources needed to make changes

Sensitivity to follower needs Understands others’ abilities and responds to their needs

Unconventional behavior Does things that are novel and counter to traditional norms

Source: Based on Conger, J. A., & Kanungo, R. J. (1998). Charismatic leadership in organizations. Los Angeles: Sage.

Charismatic leaders influence followers with a four-step process. The leader first expresses an appealing vision that leads followers to believe a better future can be constructed. Second, the leader sets high performance expectations of others while expressing confidence that those outcomes are achievable. Third, the leader establishes values for followers to emulate, through his or her words and actions. Fourth, the personal sacrifices the leader makes chal- lenge others to be courageous and help achieve the vision (Shamir, House, & Arthur, 1993).

A person can become a charismatic leader by engaging in three activities. First, the leader must create enthusiasm, expressing ideas not just with words, but with deeds and the entire set of communication skills at his or her disposal in order to help develop an aura of enthu- siasm. Second, the leader needs to create bonds with others to inspire action. Third, a char- ismatic leader taps into the emotions of others in a way that brings out their potential (Rich- ardson & Thayer, 1993).

Some evidence suggests that charismatic leaders increase levels of performance and satisfac- tion in followers (Kirkpatrick & Locke, 1996). Those working with such leaders give extra effort due to bonds with the leader. They also express satisfaction as a result of those connec- tions. When trustworthy and ethical leaders apply it wisely, charismatic leadership can lift the energy and performance of an entire organization. A number of studies have documented the unique qualities of charismatic leaders and the impact they have on followers and the excep- tional results they are often able to accomplish (Conger et al., 1988; House & Howell, 1992; Klein & House, 1995).

Unfortunately, it is also possible to misuse and abuse charisma. If charismatic leaders lack in ethics, strong character, or morals; tend to be overconfident and narcissistic (self-absorbed and egotistical); or lack the capabilities to deliver on their promises, they gain followers but eventually lose the respect and confidence of most (Tucker, 1968; Conger, 1999; Howell &

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Section 4.3 Defining Transformational Leadership

Avolio, 1993). Individuals of this type can also lead people down the wrong paths and moti- vate people to act on emotion rather than sound judgment, as they tend to be very persuasive. Charismatic leadership may be, however, situation specific. In other words, what becomes inspirational to employees in one setting may not work as well in others. Also, due to the nature of the vision needed to be perceived as charismatic, it may be that the behaviors are limited to those at the rank of CEO or top manager as well as entrepreneurs.

Additional criticism of the charismatic model is that not all organizations may benefit from such an individual. Companies in crisis or those requiring strong direction due to environ- mental challenges appear to be best served by such individuals. In other more stable situ- ations the style may be of less value. And finally, some charismatic leaders have seemingly become more interested in the trappings of high rank rather than continuing to serve as effec- tive organizational directors (Raelin, 2003). Bass has used the term pseudotransformational leadership (1998) to describe such leaders who may pitch grand visions but who are essen- tially self-consumed, exploitive, power oriented, and have questionable moral values.

Self-Reflection Questions

1. Can you think of a situation in which being a part of a leader’s out-group might be an advantage, in terms of a personal career? Can you think of a situation in which being a part of a leader’s in-group might create a career disadvantage? Explain your answer.

2. Does the charismatic leadership approach apply to all levels of management, or only at the CEO/top management level? Defend your response.

4.3 Defining Transformational Leadership

The term “transformational leadership” was first introduced by Downton in 1973. It is the process of taking organizations to new levels of performance and health by utilizing skills in leadership, championing change, and transforming organizations. Transformational means to fundamentally transform something or someone from one condition or state of being to another. James MacGregor Burns is the scholar who is usually credited with formally concep- tualizing the nature of transformational leadership.

Transactional and Transformational Leadership

In Leadership (1978), Burns made a distinction between transactional and transformational leadership. Transactional leadership focuses on the transactions, or exchanges, that occur between leaders and followers in getting the job done and achieving goals. Leaders provide something of value for the followers in exchange for doing what needs to be done. For exam- ple, leaders are using transactional leadership when they offer followers pay, recognition, promotions, and challenging assignments for their efforts. Politicians use transactional lead- ership tactics when they offer promises for votes; teachers utilize transactional leadership when they offer grades for completed work. Transactional leadership is based on appealing

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Section 4.3 Defining Transformational Leadership

to the self-interest of followers to motivate performance. It can be effective in driving perfor- mance toward stated expectations or goals but is not as effective at driving self-initiative and commitment to higher-level goals and causes. Some suggest that, in many ways, transactional leadership is another way of describing basic management practices.

Transformational leadership is the process of engaging, involv- ing, inspiring, and motivating fol- lowers to seek challenging goals beyond just their own personal self-interests to transform orga- nizational goals and outcomes. It appeals to higher-level needs by using vision, inspiration, and important causes to bring about significant positive changes in indi- viduals, groups, teams, and organi- zations and motivates followers to transcend their self-interests for a higher purpose (Avolio, Waldman, & Yammarino, 1991). Transforma- tional leadership takes leadership to a new level of transforming organizations and setting them on a new course of action. While organizations need to be well managed, rising to greatness and transforming organizations to succeed today also requires transformational leadership.

Bernard Bass was also a pioneer in developing and researching the concept of transforma- tional leadership (Bass, 1985). He identified specific behaviors that characterized transfor- mational leaders such as being a model of integrity and fairness, setting clear goals, having high expectations, encouraging people and providing support and recognition, stirring the emotions and passions of people, and getting people to look beyond their own self-interests to reach higher goals. Bass identified the four dimensions of transformational leadership you see in Table 4.3 (Bass & Avolio, 1990; Avolio, Bass, & Jung, 1999).

Transformational leadership is positively associated with improvements in job satisfaction, performance on the job, employee commitment, and employee trust in the leader (Bass, 1999; Bass & Avolio, 1994).

Comparison to Charismatic Leadership Transformational leaders may or may not be charismatic, and there are important differences in the two theories. Charismatic leadership relies more on personal influence and the personal characteristics that a leader may have. While it can be a positive motivator for change and high levels of performance, it also runs the risk of creating follower dependencies on the leader and polarizing people, as it can gain strong followers and strong detractors. Transformational leadership relies on building commitment to a vision or purpose and empowering followers to achieve it. It is based more on leaders engaging, involving, utilizing, and listening to followers rather than on trying to persuade them to act because of a leader’s personality or charisma.

iStock/Thinkstock

Transformational leadership is about inspiring people to seek challenging goals in a way that transforms organi- zational outcomes.

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Section 4.3 Defining Transformational Leadership

The Characteristics of Transformational Leaders

Transformational leaders exhibit a zeal and passion for building or accomplishing something great. Maintaining the status quo or making modest improvements is not an option for them. They are also visionary individuals who set the bar high, raise the aspirations of people, and display the courage and passion for excellence to pursue challenging goals that require changing and often transforming the way people think and act and the way organizations are run. Transformational leaders also set high personal standards that are especially significant because of the influence they are likely to have on others. They possess a unique combination of skills, including those of working with people, motivating people to perform at new levels, building teamwork and collaboration, and involving and engaging people in making changes.

Keep in mind that transformational leaders can be different in style and personality and that there are no perfect transformational leaders; they will have weaknesses and opportunities for growth just as we all do. One of the great things about leadership is that there is no end to the opportunities to continue to learn and grow as a leader. Also keep in mind that there are also pseudotransformational leaders. These are typically charismatic and egotistical leaders who can gather followers and cause major change but who do so without the integrity, moral compass, and selfless motives of a true transformational leader.

Table 4.4 provides a summary of characteristics of transformational leaders based on the theories presented in this chapter and other research on transformational leaders. One could make a case that many of the characteristics could simply apply to good leaders; however, there are several factors that make transformational leaders different.

Table 4.3: Dimensions of transformational leadership

Idealized Influence Inspirational Motivation

Leaders gain respect and trust from leading with high moral and ethical standards; setting a worthy example; and by providing a clear vision and mis- sion, emphasizing the values of the organization, instilling pride in what needs to be accomplished, and in putting the needs of others and the organiza- tion above their own. (Bass originally called this charisma but later pointed out that leaders didn’t need to be charismatic to be transformational leaders.)

Leaders inspire and motivate others by building shared visions, demonstrating their commitment to the vision, communicating high expectations, adding meaning to goals and undertakings, using symbols to focus efforts, expressing important purposes in simple and understandable ways, and doing things to keep people focused and motivated.

Intellectual Stimulation Individual Consideration

Leaders promote intellectual stimulation by making it safe to offer ideas and question assumptions; encouraging followers to seek new and better ways of doing things; valuing creative and innovative thinking; and providing an environment that frees people to think, create, and utilize their talents and abilities.

Leaders show individual consideration by taking a personal interest in followers and their develop- ment, coaching and mentoring followers to help them utilize their potential, and paying attention to the needs of followers.

Source: Based on Bass, B.M., et. al (1990); Avolio, B.J., et. al. (1992).

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Section 4.3 Defining Transformational Leadership

Table 4.4: Characteristics of transformational leaders

Visionary leader strongly committed to creating or accomplishing something special. Maintaining the status quo is unacceptable. These leaders envision a more successful and impactful future; commit to elevating and transforming the performance of people, teams, and organizations; and demonstrate their commitment to excellence by their actions and decisions.

Skilled at creating a compelling vision for the future and inspiring goals that unite and keep people focused and energized. They motivate followers to get involved and engaged and to transcend their self-interest for a higher purpose by having a clear and compelling vision for the future and inspiring goals that people are willing to invest in and make happen. They involve people in planning what needs to be done to accomplish the vision and goals and in implementing the plans, and keep people well informed about progress, changes, and challenges.

Uplifting to be around, an excellent example, and a positive attitude and outlook. They lead with an enthu- siasm and dedication that is contagious and with high moral and ethical standards. They set an excellent example for others to follow that is characterized by humility, a passion for excellence, straightforward and open communication, transparency in what they do, and professional conduct. They are realistic but positive in their attitude and outlook.

Genuinely care about people and their development. They know their people well, show a genuine interest in their welfare and development, and look for ways to utilize the potential of each individual.

Excellent skills in working with people and creating a team effort. They build strong relationships with people and are skilled at using collaboration and teamwork and the involvement of people at all levels to accom- plish tasks.

Inspire and motivate people and raise aspirations. They keep people aware of the vision and goals, commu- nicate high expectations and the belief that they can be accomplished, make work and goals meaningful, encourage and recognize people and teams for their efforts, celebrate and acknowledge important successes, and use various creative ways to keep people focused and motivated.

Stimulate and encourage innovative thinking and new ways of seeing things. They create opportunities for people to explore new and better ways of doing things. They also value and reward innovative thinking and ideas and make it safe to offer ideas and question assumptions and how things are done.

Effectively communicate ideas and encourage open communications. They are effective communicators and are skilled at making visions, goals, and other important concepts meaningful and easy to understand. They use multiple ways to communicate and keep people informed.

Empower people and teams to perform at a high level. They make clear what needs to be accomplished and empower people and teams to make decisions, get things done, and learn from their mistakes without fear of retribution.

Build trust with their high standards, predictable and straightforward behavior, commitment to doing what is right, and fair treatment of people. They act in consistent and trustworthy ways that make it possible to get things done effectively without having to second guess the behaviors and motives of the leader.

Transformational Leadership Activities

It is not surprising that visionary, passionate, selfless, honorable leaders who have such a strong commitment to creating something special can energize and motivate people to per- form at higher levels. Note that, while one of the strengths of the transformational leadership literature is the emphasis on inspiring change and transformation, we hear much less about how to actually go about changing and transforming organizations. Thus, a transformational

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Section 4.3 Defining Transformational Leadership

leader may be skilled as a visionary leader who can motivate and inspire people but may at times fail to achieve the desired results for a lack of understanding of what is involved in man- aging change and transformation. Both inspiration and implementation skills are required to achieve successful and lasting change. The following are additional activities that typify transformational leadership.

Providing Visible Leadership In the transformation process, leaders provide a clear vision of what needs to be accom- plished, involve people in planning what it will take to get there, and inspire people to per- form at a high level and help accomplish goals that go beyond their personal self-interest. They also seek ways to help people, teams, and the organization function at their best. Trans- formational leaders are highly skilled individuals who set new sights on what is possible and have the courage to make needed changes. Tony Hsieh provides a powerful example of pro- viding visible leadership (Warrick, Milliman, & Ferguson, 2015).

Championing Change In these times of continuous change, next to leadership, skills in championing change may be the most important skills leaders need to develop. Effectively managing change can give an organization a significant competitive advantage. A lack of skills in this important area can have far-reaching internal and external consequences. Unfortunately, few leaders learn how to champion change, and consequently, experts estimate the failure rate of organization changes at 70% or more (Burke, 2008; Doyle, 1992; Miller, 2002; Senge, 1999). Being skilled at championing change requires some personal fundamental knowledge and skills and the wisdom to know when to seek the assistance of experts in championing change.

To be effective at championing change, leaders should develop skills in initiating, facilitat- ing, and implementing changes (Warrick, 2013). In initiating change, transformational lead- ers can be the personal initiators of change, appoint others to initiate change, or sponsor or support others who have identified opportunities for change. Initiators of change have a change mindset and are always looking for new and better ways to do things. They keep well informed about the latest thinking or best practices and welcome change ideas from others.

Leaders also need to develop skills in facilitating change. This typically consists of getting the right people together at the appropriate times to explore ideas and plan changes; organizing and guiding change-related meetings and activities; and paving the way to accomplish change by building support, providing resources, or using influence or persuasion to make change possible.

Implementing change is an especially important skill. This requires knowledge and expertise in using a sound change process to successfully design, plan, manage, and sustain changes.

Transforming Organizations Transformational leaders are likely to have much better skills at transforming organiza- tions than typical leaders because of their zeal for building something special, their ability to

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Section 4.3 Defining Transformational Leadership

inspire people to help achieve important goals, and their commitment to involving and engag- ing people in the change process. However, transforming organizations requires a high level of knowledge and expertise that many transformational leaders may not have been exposed to. To be effective at transforming organizations, leaders need to develop skills in knowing present realities, identifying future ideas, and developing and accomplishing a sound process for transforming organizations (Kotter, 1996).

Before launching major changes, leaders need to know present realities so they can feel con- fident that they are addressing the real issues or challenges rather than someone’s assump- tions about realities or what should change. This sounds like common sense but does not always occur. It is not unusual, for example, for a high-level executive at the corporate head- quarters to initiate a major change based on his or her assumptions or great idea or an over- reaction to some issue. The change may make perfect sense to the executive and no sense to those who have to carry it out. While there are exceptions, as much as it is possible for leaders to do so, they need to know present realities and involve and listen to the appropriate people before launching major transformational changes.

It is also important for leaders to explore and identify future ideals. Future ideals describe the ideal end result that the transformation would accomplish. Knowing present realities and future ideals makes it possible to plan changes realistically with end goals in mind. At times, future ideals may be based on the vision of a transformational leader who can see what is pos- sible. They could also come from the leader and others working together to evaluate future ideals, trends, and best practices and crafting a vision for the future. In either case, the future ideals or vision for the future should provide a clear and compelling picture of what the orga- nization is moving toward or trying to accomplish.

Integrating the Field of Organization Development We can define organization development (OD) as a planned and collaborative process for understanding, developing, and changing organizations to improve their health, effective- ness, and self-renewing capabilities (Warrick, 2011). OD practitioners traditionally sought to develop healthy, high-performance organizations and manage change. An emphasis on trans- forming organizations is a more recent development. The official term used in the field of OD is organization transformation or OT.

In 1994, one of the best-selling OD books added “transformation” to the title of the new edition to emphasize the interest in OT. In the introduction to the book titled Organization Develop- ment and Transformation: Managing Effective Change, French, Bell, and Zawacki wrote, “Orga- nization transformation (OT) is a recent extension of organization development that seeks to create massive changes in an organization’s structures, processes, culture, and orientation to its environment. Organization transformation is the application of behavioral science theory and practice to effect large-scale, paradigm-shifting organizational change” (1994, p. vii).

When considering the strengths of the fields of transformational leadership and organization development, two concepts emerge. First, transformational leadership excels in addressing leadership issues, and, second, organization development excels at addressing and managing change in transforming organizations.

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Section 4.3 Defining Transformational Leadership

The fields of transformational leadership and organization development have the common goal of taking organizations to new levels of performance and health. They are both commit- ted to raising the bar and creating high-performing organizations that are also quality places to work. When leaders integrate concepts from transformational leadership and organization development, they strengthen both fields.

Transformational Leadership Strategies

In 1985 Bennis and Nanus published a book with a model of leadership that provides four leadership strategies for transforming organizations. The model was based on interviews with 90 leaders. The strategies included attention to vision, providing meaning through com- munication, building trust, and deployment of self through positive regard.

Transformational leaders’ attention to vision leads to the creation of compelling, realistic, easy-to-understand, and energy-producing direction for the organization that gives people a common focus. The leaders are results oriented and bring out the best in others through the engagement and involvement of others who have brought out the best in the leaders. The transforming process becomes mutually beneficial and reinforcing.

A second strategy was to provide meaning through communication. Only leaders who are skilled at clearly communicating a vision and making it meaningful are able to realize that vision. Transforming leaders find many ways to make visions clear and motivating. They com- municate their ideas through words, published statements, models, examples, social media, and other forms of communications. Through frequent and clear communications, they are able to build the enthusiasm and commitment of others. Effectively communicating ideas and adding meaning to challenges are essential to good leadership.

Third, transformational leaders build trust through positioning. Bennis and Nanus make the analogy that trust is the “lubrication” that makes it possible for organizations to work. Trans- forming leaders build trust by being predictable, reliable, transparent, consistent in their practices, straightforward in communicating, and honorable in their actions. They also gain trust by making their positions known and being consistent and persistent in pursuing the positions they take.

The fourth strategy involves the deployment of self through positive self-regard. Effective lead- ers possess self-confidence that compels others to follow but at the same time remain humble and eager to learn and grow. Transforming leaders know their strengths and weaknesses, focus on utilizing and developing their strengths, and are skilled at matching a worker’s strengths and the organization’s needs. They are also eager to continuously learn and grow. They instill confidence in followers to strive for and achieve more.

In summary, transformation leadership, in many ways, represents a pattern of living. Those truly dedicated to this approach work to strengthen their skills in providing key transforma- tion activities. All the while they recognize that this method of leadership is a journey rather than a destination. There is always room for improvement.

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Section 4.3 Defining Transformational Leadership

Potential Benefits of Transformational Leadership

An extensive amount of research has documented and validated the many benefits that typi- cally occur with transformational leadership. Table 4.5 indicates that transformational lead- ership is likely to result in higher individual, team, and organizational performance; higher employee morale, engagement, and loyalty to the organization; more innovative and cre- ative thinking; the uniting of diverse members of an organization around a higher purpose and common goals; improvements in the culture of an organization; greater levels of trust throughout the organization; and decreased employee stress and burnout.

Table 4.5: Benefits of transformational leadership

Payoffs Author(s)

1. Increased individual performance, motivation, satisfaction, morale, loyalty, commitment, inno- vation, and empowerment.

Avey, Hughes, Luthans, & Norman (2008), Bass (1999), Michaelis, Stegmaier, & Sonntag (2010), Humphreys & Einstein (2003), Kanungo (2001), Kelloway, Barling, Kelley, Comtois, & Gatien (2001), McShane & Von Glinow (2010), Nurdan (2003)

2. Increased team performance, commitment, innovation, and cohesiveness.

Bass (1999), Blascovich & Hoyt (2003), Dionne, Yammarino, Atwater, & Spangler (2004),

3. Increased organization performance, outcomes, innovation, creativity, and improvements in culture.

Arzu & Lale (2009), Bass (1999), Humphreys & Einstein (2003), Michaelis, Stegmaier, & Sonntag (2010), Simosi & Zenikou (2006), Wang & Zhu (2011)

4. Positively correlated with improved employee attitudes, behaviors, and engagement.

Avolio, Bass, & Jung (1999), Bass, Avolio, & Good- heim (1987), Bycio, Hackett, & Allen (1995), Nielsen, Yarker, Brenner, Randall, & Borg (2008), Tims, Bakker, & Xanthopoulou (2011)

5. Elevates the desires and aspirations of indi- viduals and groups.

Bass & Avolio (1991), Burns (1978)

6. Significant positive changes in individual and organization behavior.

Avolia, Waldman, & Yanmarind (1991), Daft (2005)

7. Unites diverse members in the pursuit of higher goals.

Pawar & Eastman (1997)

8. Shapes and reinforces a new culture. Tichy & Devanna (1997)

9. Builds trust among leaders and employees. Bass (1999), Sashkin & Sashkin (2003)

10. Decreased employee stress and burnout. Gill, Flaschner, & Shachar (2006)

Consequently, it seems clear that a transformational leadership program poses many poten- tial benefits to individual leaders and to organizations as a whole. When we merge these ideas with other theories of leadership, such as those presented in this and the previous chapter, the chances for success for everyone involved appear to improve dramatically.

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Section 4.4 Developing Transformational Leaders

4.4 Developing Transformational Leaders

Imagine the advantages an organization could have if only one person, the CEO, had the skills of a transformational leader. A single transformational leader at the top could make a signifi- cant difference in the culture of the organization and what it accomplishes. Now imagine what it would be like if all of the members of the executive team understood and practiced the skills of a transformational leader, and they had a common vision for the future of the organization and what the organization should be like. The research on transformational leadership sug- gests that if this was the case, performance, morale, teamwork, the focus and motivation of the workforce, customer relations, and the culture of the organization would all significantly improve. In addition, the organization would accomplish changes much more quickly and the success rate of changes would be high.

Now, consider what a company would be like if leaders throughout the organization were trained to be skilled transformational leaders. With these thoughts in mind, it would make sense that organizations should be developing transformational leaders. Perhaps not all lead- ers need to be transformational leaders and it certainly is not necessary to be constantly seeking major changes. That said, however, all leaders could benefit from training in transfor- mational leadership. This section presents three approaches to developing transformational leaders as well as the potential benefits that can emerge as a result.

The Kouzes and Posner Five Practices Model

In The Leadership Challenge, originally published in 1987, Kouzes and Posner (2012) offer a leadership model that some experts consider to be a transformational model of leadership because of the emphasis on achieving extraordinary results. Kouzes and Posner based the model on interviews with 1,300 middle- and senior-level leaders in private and public sector organizations. It identifies five behaviors that leaders can learn and practice. They include modeling the way, inspiring a shared vision, challenging the process, enabling others to act, and encouraging the heart.

Self-Reflection Questions

1. Recently, some authors have written that we should not consider transactional and transformational leadership as opposing practices but rather as complementary activities that effective leaders perform. Do you agree with this assessment? Why or why not?

2. Is transformational leadership something to be reserved for new organizations and those experiencing crises? Or can it be effective in stable and successful companies? Defend your response.

3. What are the two most important characteristics and the two most important strategies for transformational leadership? Explain how these elements would come together to achieve success.

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Section 4.4 Developing Transformational Leaders

To model the way, transformational leaders are clear about their own guiding principles, val- ues, and philosophies and serve as examples of what they expect of others. They know effec- tive leaders follow through on their promises and commitments and are consistent in their words and deeds.

Inspiring a shared vision occurs when effective leaders create visions that are exciting and meaningful and that challenge others to transcend the status quo. They dream big and are confident that they can make extraordinary things happen. You can’t command commitment to a vision. You have to inspire it by making it clear and compelling and engaging people in making it happen.

Transformational leaders challenge the process. They believe that accomplishing something great never occurs by keeping things the same. Leaders who make a difference are like pio- neers who are willing to challenge the status quo and explore new and better ways of doing things. They don’t wait for fate to smile on them. They are willing to take calculated risks to make things better. They study and explore alternatives, listen to the ideas of others, and cre- ate a climate for experimentation by recognizing and providing support for good ideas and a willingness to challenge the system.

Transformational leaders enable others to act. They know that grand dreams and visions do not become a reality through the actions of a single person. Such outstanding leaders are effective at working with others and creating a team effort. They are strong believers in build- ing relationships and using collaboration and teamwork to get things done. They listen to different points of view and treat people with great respect. They know their people well and look for ways to utilize their potential, develop their competencies, and help them succeed. They allow people to make decisions without fear of retribution and build trust with others by focusing on their needs rather than being preoccupied with their own needs.

Finally, transformational leaders encourage the heart. Accomplishing something special is not without challenges and obstacles. People can become impatient, exhausted, frustrated, discouraged, and disenchanted and may be tempted to give up or withdraw their commit- ment. Effective leaders realize that people need to be genuinely appreciated, recognized, and rewarded for their efforts and that they need to take time to celebrate quick wins and signifi- cant victories and to have fun and build a sense of community.

Kouzes and Posner have researched the impact of the Five Practices Approach. More than two million people from around the world have completed their 360-degree Leadership Practices Inventory (LPI) that evaluates how frequently leaders engage in the Five Practices. Their results indicate that how a leader behaves, rather than any particular characteristic of a leader, significantly explains workplace engagement and commitment. Leaders who use the Five Practices more frequently than their counterparts are likely to achieve the results dis- played in Table 4.6 (Kouzes & Posner, 2012).

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Section 4.4 Developing Transformational Leaders

Kouzes and Posner also compared the financial results over a 5-year period of publically traded organizations that had senior leaders whose constituents rated as “strongly” engaged in the Five Practices compared with ones whose leaders were significantly less engaged in the Five Practices. The organizations with leaders who were strongly engaged had net income growth that was nearly 18 times higher and stock prices growth of nearly three times higher than the comparison organizations.

Kotter’s Eight-Step Model

The proof of the effectiveness of transformational leadership is in actually accomplishing sig- nificant changes that take organizations to new levels of performance and health. Therefore, transformational leaders need to be skilled at developing and accomplishing a sound process for transforming organizations. The best-known and most popular model for developing a process for transforming organizations is John Kotter’s model first presented in his classic book entitled Leading Change (1996). An adaptation of Kotter’s eight-step model includes the activities displayed in Figure 4.3.

1. Establish a sense of urgency. Study the market and competitive realities and respond to a crisis or major opportunity.

2. Create a guiding coalition. Put together a group with enough power and influence to lead change.

3. Develop a vision and strategy. Create a vision to help direct the change effort and develop strategies for achieving the vision.

4. Communicate the change vision. Use multiple vehicles to constantly communicate the new vision and strategies and have the guiding coalition role model the behavior expected of employees.

5. Empower broad-based action. Get rid of obstacles; make needed changes in systems and structures; and encourage risk taking, innovative ideas, activities, and actions.

6. Generate short-term wins. Plan and create visible improvement in performance or wins and visibly recognize and reward those who make wins possible.

Figure 4.3: Kotter’s eight-step model

Adapted from Kotter, J. (1996). Leading change. Boston: Harvard Business School Press.

1. Establish a sense of urgency

2. Create a guiding coalition

3. Develop a vision and strategy

4. Communicate the change vision

5. Empower broad-based action

6. Generate short-term wins

7. Consolidate gains and produce additional change

8. Anchor the new approaches in the culture

Implementing & sustaining for

change

Engaging & enabling the organization

Creating the climate for

change

Table 4.6: Outcomes experienced using the Five Practices Approach

Higher-performing teams

Increased sales and customer satisfaction levels

Renewed loyalty and greater organizational commitment

Increased motivation and the willingness to work hard

More successfully represent their units to upper management

Promote high degrees of involvement

Increase retention, reducing absenteeism and turnover

Positively influence recruitment rates

Source: Based on Kouzes, James & Posner, Barry (2012). The leadership challenge: How to make extraordinary things happen in organizations. San Francisco: Jossey-Bass, 27-28.

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1. Establish a sense of urgency

2. Create a guiding coalition

3. Develop a vision and strategy

4. Communicate the change vision

5. Empower broad-based action

6. Generate short-term wins

7. Consolidate gains and produce additional change

8. Anchor the new approaches in the culture

Implementing & sustaining for

change

Engaging & enabling the organization

Creating the climate for

change

Section 4.4 Developing Transformational Leaders

Kouzes and Posner also compared the financial results over a 5-year period of publically traded organizations that had senior leaders whose constituents rated as “strongly” engaged in the Five Practices compared with ones whose leaders were significantly less engaged in the Five Practices. The organizations with leaders who were strongly engaged had net income growth that was nearly 18 times higher and stock prices growth of nearly three times higher than the comparison organizations.

Kotter’s Eight-Step Model

The proof of the effectiveness of transformational leadership is in actually accomplishing sig- nificant changes that take organizations to new levels of performance and health. Therefore, transformational leaders need to be skilled at developing and accomplishing a sound process for transforming organizations. The best-known and most popular model for developing a process for transforming organizations is John Kotter’s model first presented in his classic book entitled Leading Change (1996). An adaptation of Kotter’s eight-step model includes the activities displayed in Figure 4.3.

1. Establish a sense of urgency. Study the market and competitive realities and respond to a crisis or major opportunity.

2. Create a guiding coalition. Put together a group with enough power and influence to lead change.

3. Develop a vision and strategy. Create a vision to help direct the change effort and develop strategies for achieving the vision.

4. Communicate the change vision. Use multiple vehicles to constantly communicate the new vision and strategies and have the guiding coalition role model the behavior expected of employees.

5. Empower broad-based action. Get rid of obstacles; make needed changes in systems and structures; and encourage risk taking, innovative ideas, activities, and actions.

6. Generate short-term wins. Plan and create visible improvement in performance or wins and visibly recognize and reward those who make wins possible.

Figure 4.3: Kotter’s eight-step model

Adapted from Kotter, J. (1996). Leading change. Boston: Harvard Business School Press.

1. Establish a sense of urgency

2. Create a guiding coalition

3. Develop a vision and strategy

4. Communicate the change vision

5. Empower broad-based action

6. Generate short-term wins

7. Consolidate gains and produce additional change

8. Anchor the new approaches in the culture

Implementing & sustaining for

change

Engaging & enabling the organization

Creating the climate for

change

7. Consolidate gains and produce additional change. Use the momentum to change all systems, structures, and policies that don’t fit together or fit the vision by hiring, developing, and promoting people who can best implement the changes, and rein- vigorating the process with new projects, themes, and change agents.

8. Anchor the new approaches in the culture. Create a new culture with better per- formance, customer service, and productivity-oriented behavior, as well as better leadership, more effective management, and continued leadership development and succession planning.

In a later book titled The Heart of Change (2002), Kotter and Cohen emphasized the impor- tance of engaging hearts (feelings, emotions) and not just minds in committing to change. Numbers and data can be important in motivating change, but if you cannot find creative ways to capture hearts as well as minds, there is likely to be little commitment to the change. You can see an example of using transformational leadership to accomplish a major change by appealing to both the heart and the mind in the Leadership Profile of Vicky Colbert (Riggio, 2012).

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Section 4.4 Developing Transformational Leaders

The Kotter model provides an excellent process for transforming organizations. The challenge, however, is not so much about how to carefully follow a particular model as it is to create a process that best fits a particular organization and its resources, circumstances, and needs. Creating your own process also presents an opportunity to make improvements on existing models. For example, you could add efforts to assess internal present realities in addition to external realities, engage the appropriate people in exploring future ideals, provide training in transformational leadership, and build feedback mechanisms into the process to evaluate what is working and not working so your organization can make adjustments before they become major issues.

A Six-Step Transformational Leadership Training System

Organizations that see the potential of developing transformational leaders need to have a well-crafted plan for developing their leaders. Leaders who are committed to making a dif- ference in people’s lives and the success of their organizations can’t be developed through

Vicky Colbert: Transformational Leadership

Vicky Colbert was a young public servant in the Ministry of Education in Colombia where she was responsible for coordinating projects of rural schools. As she visited the schools, she witnessed challenges that resulted in low quality educational outcomes, like single room classrooms where teachers taught all primary grades simultaneously without adequate training. The children in the rural areas achieved an average of 1.7 years of formal schooling, putting them in the category of functional illiteracy. Colbert put together and led the first Escuela Nueva (New School) program team, engaging researchers and a team of rural teachers and empowering them to be creative and take ownership of their work. Together they developed a plan for transforming the rural education system in Colombia that became highly successful.

How did Vicky Colbert help transform education in her country and now other parts of the world? Convinced that peace, democracy and social and economic development cannot be achieved without quality basic education, she felt a deep passion for improving the educational system. As a result, Ms. Colbert involved teachers and followers in rural Colombia to help her reframe the problems that existed and provide new solutions. She took Ministry officials and educational authorities into the remote villages of Colombia to see the conditions. She appealed to both the heart and the mind and eventually was able to persuade leaders in the Ministry of Education to support the program. She also empowered teachers and other followers to help make the program a success, creating leadership opportunities for teachers who showed promise. She supported followers’ needs so they could grow professionally and personally. She challenged people to dream big and expand their horizons of what is possible.

Her efforts were so successful that the educational transformations she led eventually helped Colombia excel in academic achievements among 11 Latin American countries. She eventually left the Ministry of Education to found a nonprofit, Fundación Escuela Nueva, to ensure quality implementation of the Escuela Nueva program and to generate new developments to help others transform their educational systems.

Courtesy of Fundación Escuela Nueva and Vicky Colbert

Vicky Colbert.

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Section 4.4 Developing Transformational Leaders

traditional programs that share valuable information and hope that leaders practice what they have heard. They need to be in programs that allow them to practice and learn in an environment committed to supporting what they are learning. With this in mind, Table 4.7 presents some guidelines for developing transformational leaders in a six-step approach.

Table 4.7: Six steps for developing transformational leaders

1. Begin with top level support and involvement.

2. Appoint a design team to help plan the training and development activities and create a transformational leadership model.

3. Design training as a win/win opportunity to benefit the leaders and the organization.

4. Plan follow-up actions and other developmental opportunities to apply and practice what is being learned.

5. Provide coaching in applying transformational leadership training and development.

6. Evaluate and improve the training and development process.

As you can see in the first step, the top-level leaders need to understand transformational leadership, participate in training on transformational leadership, and agree on how they can encourage and value it. Note that providing training in transformational leadership would be helpful for any leader.

Second, a team made up of at least one top-level leader and other respected leaders from different parts and levels of the organization could be formed to work with internal and/or external professionals to design a transformational leadership program, continued develop- ment opportunities, and a transformational leadership model to be used in the training. They could also make recommendations to the executive team on how to encourage transforma- tional leadership and align organization philosophies and practices to value it.

In the third step, note that most training programs are planned as events where leaders receive training, and the goal is that they will apply some of what they learned. Instead, view- ing training as an intervention makes it possible to use training to benefit the organization as well as the participants by creating opportunities during the training to involve participants in addressing relevant organizational issues.

As part of the fourth step, the training team should recognize that actual behavioral change occurs in leaders when there is a change in thinking (training) followed by practicing or applying new behaviors until they become habits. Viewing training and development as an intervention makes this possible. In addition to addressing real issues in training sessions that can benefit the organization, having participants develop and implement action plans to be completed after training can provide accountability for practicing and applying what has been learned and opportunities for the organization to reap immediate benefits.

Consider, for example, if as a follow-up assignment as part of the fifth step, each participant had to develop and implement action plans for making one significant personal improvement, one significant improvement in their team, and one organizational improvement that could be done individually or with other training program participants. This could have a significant impact on the organization. When using this approach, it is important to have a planned follow-up meeting, preferably in about one to two months, so there will be accountability for participants

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Chapter Summary

to pursue their action plans and so participants can share the progress they have made and learn from one another. Further consider that training in transformational leadership requires leaders to learn new thinking and skills that they may not be familiar with. Providing available coaching to help participants with their action plans and other related developmental activities can significantly increase the willingness to apply the new skills.

Sixth and finally, the original design team from the human resources or organization develop- ment department, or another appropriate team, should be appointed to champion transfor- mational leadership in the organization. Their role could be to evaluate the training and devel- opment process, make improvements and plan future activities, and work with the top-level leaders to engage them, involve them, and advise them regarding transformational leadership.

With careful planning, a program for developing transformational leaders has the potential to have a significant positive impact on leaders, the people and teams they lead, and the organi- zation they serve. In fact, the program can be used for transforming the entire organization.

Self-Reflection Questions

1. What are the common elements in the three approaches shown in this section? 2. What are the primary differences between the three approaches shown in this

section?

Chapter Summary

Recent Views of Leadership: Servant, Positive, and Principle Centered This chapter begins with presentations regarding some of the modern theories that received notice in academic circles, in popular press, and by practicing managers. The first section of this chapter examines three approaches: servant leadership, positive leadership, and principle-centered leadership. Servant leadership stresses serving others; placing the needs of others above your own; helping others learn, grow, and develop; and seeing a leader’s pri- mary role as service to employees, customers, shareholders, communities, and the general public. Positive leadership shows how to reach beyond ordinary success to achieve extraor- dinary effectiveness and what is called “positively deviant performance,” which means performance far above the norm. Principle-centered leadership advocates for persons of strong character who build sound principles into the way they lead and live both their work and off-work lives.

Charismatic Leadership Charismatic leaders influence followers with a four-step process. The leader first expresses an appealing vision, then sets high performance expectations with confidence, then estab- lishes values for followers to emulate, and finally the personal sacrifices the leader makes challenge others to be courageous as well. The passion that charismatic leaders have for what they do can motivate people to commit to actions and perform at higher levels.

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Key Terms

Defining Transformational Leadership The remainder of this chapter examines transformational leadership. Transactional leader- ship focuses on the transactions, or exchanges, that occur between leaders and followers in getting the job done and achieving goals. Transformational leadership is the process of engaging, involving, inspiring, and motivating followers to seek challenging goals beyond just their own personal self-interests to transform organizational goals and outcomes. The four dimensions of transformational leadership are:

1. idealized influence; 2. inspirational motivation; 3. intellectual stimulation; and 4. individual consideration.

Transformational leadership activities include providing visible leadership, championing change, transforming organizations, and integrating the field of organization development. Transformational leadership strategies include attention to vision, providing meaning through communication, building trust, and deployment of self through positive regard.

Developing Transformational Leaders Several approaches to developing transformational leaders are available. Among the most recognized are the Kouzes and Posner Five Practices Model and Kotter’s eight-step model. This chapter concludes with six steps than can help develop such leaders on an individual and organization-wide level, including:

1. Begin with top-level support and involvement. 2. Appoint a design team to help plan the training and development activities and create a

transformational leadership model. 3. Design training as a win/win opportunity to benefit the leaders and the organization. 4. Plan follow-up actions and other developmental opportunities to apply and practice

what is being learned. 5. Provide coaching in applying transformational leadership training and development. 6. Evaluate and improve the training and development process.

Key Terms

charismatic leadership Type of leadership involving a leader who can motivate people to achieve at higher levels than they ordinar- ily might.

positive leadership Type of leadership that refers to the way leaders deal with negative or difficult issues along with learning how to build a positive organization.

principle-centered leadership Type of leadership that is practiced from the inside out on four levels: personal, interpersonal, managerial, and organizational.

servant leadership Type of leadership that stresses serving others; placing the needs of others above your own; helping others learn, grow, and develop; and seeing a leader’s primary role as service to employees, cus- tomers, shareholders, communities, and the general public.

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Leadership Applications and Tools

transactional leadership Type of leader- ship that focuses on the transactions, or exchanges, that occur between leaders and followers in getting the job done and achiev- ing goals.

transformational leadership The pro- cess of engaging, involving, inspiring, and motivating followers to seek challenging goals beyond just their own personal self- interests to transform organizational goals and outcomes.

Leadership Applications and Tools

Leadership Exercises

1. In our past history, one favorite expression for many people in business and other vocations was “Either lead, follow, or get out of the way.” Evaluate this statement in light of the contributions of the servant leadership, positive leadership, and principle- centered leadership theories.

2. Management expert Fred Luthans has distinguished between “real managers” and what are basically politicians. Real managers take the time to understand their employees’ talents and work to help those individuals excel. Politicians spend time in ingratiation with those of higher rank and are far less observant of the efforts of their subordinates, either in a positive or negative fashion. A politician will take credit for a subordinate’s good work or success. A real manager gives credit where credit is due.

Evaluate real managers and politicians using servant leadership principles.

Evaluate real managers and politicians using principle-centered leadership ideals.

Evaluate real managers and politicians using transformational leadership principles.

Provide examples of behaviors you would associate with real managers and those of politicians from your past work experiences.

3. Herman notices that he is routinely skipped over when the “lunch bunch” goes out of the office to eat. He also has been frustrated by feeling “out of the loop” when it comes to key information regarding his department. He receives very little feedback from his supervisor, and much of it does not contain pertinent or valuable information. His coworker, James, always appears to be “in with the in crowd.” At the same time, Her- man believes his supervisor has stalled in his current position and does not look like he will be promoted any time soon.

Use the leader-member exchange and vertical dyad linkages theories to explain Her- man’s and James’s situations.

What should Herman do, based on his current standing? Explain your answer. 4. Organizational behavior guru Steven Kerr has proposed a series of items that either

“substitute” for the presence of a leader or “neutralize” a leader’s influence. These fac- tors can be placed into three categories, all of which could essentially take the place of or reduce the influence of a leader:

• subordinate characteristics, including the individual’s level of experience and sense of professionalism;

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Leadership Applications and Tools

• task characteristics, which exist at two extremes: machine-paced work ( assembly line), in which the follower simply completes routine, repeated tasks. Intrinsically satisfying work, in which the job itself is highly motivating and inspires the worker to achieve based on its challenge and excitement; and

• organizational characteristics including standardized rules and procedures for routine tasks and group cohesiveness for those operating in close contact with others.

Analyze how these factors would have an impact on a servant leader.

Analyze how these factors would have an impact on transactional leaders.

Analyze how these factors would have an impact on transformational leaders. 5. In Chapter 1, we suggested the leadership and management could be one and the same,

completely different from each other, or have some aspects in common and some that are not. Use this same type of reasoning and discuss the relationships between trans- actional leadership and transformational leadership.

6. What things do you see as common elements between transformational leadership and servant leadership? How might they differ? Explain your answer.

7. Consider the following potential factors that might affect your ability to become a transformational leader or an organization’s ability to successful train transforma- tional leaders. Explain your thoughts about each one.

• your age • your level of education • your in-group or out-group status • the level of authoritarianism present in the organization • the type of ownership (small company versus large corporation) • the status of the organization (growing versus declining) • the presence of a major organizational climate • economic conditions (boom versus recession)

8. The CEO of your company has read a few articles about transformational leadership and is developing a genuine interest in the subject, as she knows there is a strong need for transformational leaders in the company if it is going to stay successful and com- petitive. She is considering starting a program to develop transformational leaders but wants to know more about transformational leadership. The CEO has heard that you’ve been studying transformational leadership and has asked you to make a brief one-page presentation to the executive team that includes the following:

I. What is transformational leadership?

II. What are the characteristics of a transformational leader?

III. What would be potential benefits to the company of having transformational leaders?

What would you include in your presentation?

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Leadership Applications and Tools

Applications and Tools

1. Integrating the theories discussed in this chapter and then developing a sound leader- ship philosophy provides an opportunity to know and practice excellent leadership. The process should begin with reviewing the best theories and practices from the first four chapters and then listing the most appealing ones. Some leaders begin their philosophy with an overall mission statement as a leader. The following forms give an example of what to consider when creating a leadership philosophy and give a sample.

Leadership Philosophy Considerations

1. Your goal as a leader in committing to excellence, achieving commendable results, building a quality place to work, and bringing out the best in people, teams, and organizations

2. The type of example you want to set 3. The values you want to emphasize and stand for 4. The need to be a visible, approachable, in-touch leader who encourages and wel-

comes open communication and dialogue 5. The need to build a clear and shared vision, mission, and strategy 6. The need to provide clear direction and inspire people to excel 7. The importance of structuring your organization for results with the right people

in the right places, doing the right things 8. The importance of building an action-oriented, innovative, fun culture of

excellence 9. Take great care of your boss, your people, and your customers

10. The importance of equipping your people with the training, tools, resources, tech- nology, and working conditions they need to be successful, and empowering them to do their jobs

11. The need to treat everyone with respect and to build relationships that pave the way for getting things done

12. The need to build teamwork at the top, within teams, between teams, and with other key stakeholders

13. The importance of developing skills in managing change and transforming organizations

14. Make sure that your organization is well managed 15. The need to keep focused personally and to keep your organization focused on

continuously learning, growing, and improving 16. Develop a few key success indicators, keep score, and have the courage to make

needed adjustments

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Leadership Applications and Tools

Sample Leadership Philosophy

My Mission

• Build a high-performance organization that is a quality place to work

• Bring out the best in people, teams, and the organization

Be an Example Worthy of Following

• Develop a passion for excellence that is contagious and set an example for being humble, approachable, and teachable

• Be a positive leader who is uplifting to be around and who turns difficulties into opportunities

• Walk the talk and set an example for being open, straightforward, and trustworthy

• Be a principled leader who can be trusted to have high morals and standards, act with integrity, and do what is right

• Think before you speak, listen more than you talk, and learn to involve others before making foolish decisions

Develop a Consistent and Effective Leadership Style

• Place a strong emphasis on both people and performance

• Lead from the front by being visible, approachable, and available

• Be consistent in your style and practices so people will know what to expect

• Be an in-touch leader who has a strong sense of reality about what is going on, about the strengths and weaknesses of your organization, your people, your cus- tomers, and particularly about yourself

Set the Stage for Success

• Build a compelling vision for the future, a mission that keeps people focused, and commitment to both

• Provide direction by creating clear and meaningful strategies and goals and core values that are used and practiced

• Build a results-oriented culture that values excellence, open communication, and a positive and fun work environment

• Align everything to motivate the right results and behaviors

Manage for Results

• Plan, organize, direct, control, staff, and execute for results, and keep people well informed

• Structure the organization for results with the right people in the right places doing the right things

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Leadership Applications and Tools

• Assure that everyone has clear responsibilities and goals and knows what they have to do to succeed

• Equip people with the right training, tools, resources, technology, and working conditions to be successful

• Use delegation and empowerment to maximize what can be accomplished and avoid micro-managing

Build Relationships and Bring Out the Best in People

• Treat everyone with value and respect

• Build good relationships with colleagues at all levels and with customers and other stakeholders

• Know people, build on their strengths, and find ways to help them develop and perform at their best

Build High-Performance Teams and Teamwork

• Build your team into a high-performance team and develop teamwork at the top, within teams, and between teams

• Emphasize the importance of collaboration in getting things done and creating ownership to decision making

Find Ways to Contribute to the Success of the Organization

• Develop a big picture perspective and look for ways to contribute to the success of the organization

Champion Needed Change

• Develop a change mindset, always looking for new and better ways to do things

• Create opportunities for people to get together to make needed changes and improvements

Know Where You Stand Personally and Organizationally

• Develop success indicators, keep score, solicit and welcome feedback, and have the courage to make needed changes

2. Evaluate yourself on the Transformational Leadership Questionnaire below. Identify your strengths and opportunities for improvement as a transformational leader and list at least five things you would need to do to be a skilled transformational leader.

3. Consider the organization transformation model developed by John Kotter that is pre- sented in the chapter and the discussion following the model. Create your version of the Kotter model based on the steps you think transformational leaders should use as guidelines in transforming organizations.

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Leadership Applications and Tools

Transformational Leadership Questionnaire Instructions: In these times of dynamic change and the need to do everything smarter, faster, and better, transformational leaders who are skilled at leading, championing change, and transforming organizations will be in high demand. Unfortunately, few leaders have been trained in transformational leadership skills. This questionnaire is designed to help you evaluate where you are strong and weak in transformational leadership skills so you will know what you need to do to become a skilled transforma- tional leader. Use the following scale to rate yourself on the transformational leader- ship skills described below. Then complete the information for interpreting and evalu- ating your scores.

Low Rating 1 2 3 4 5 6 7 8 9 10 High Rating

Leadership

_____ 1. Vision. Skills in providing a clear and compelling picture of what is possible and why it is important

_____ 2. Direction. Skills in providing clear goals, values, and priorities

_____ 3. Inspiration. Skills in leading by example; encouraging excellence; and encour- aging people to meet the challenge, overcome obstacles, and persevere

_____4. Bringing out the best in people, teams, and organizations. Skills in helping people, teams, and organizations function at their best

Championing Change

_____ 5. Initiating change. Skills in leading or sponsoring needed change

_____ 6. Facilitating Change. Skills in guiding or paving the way for change

_____ 7. Implementing change. Skills in designing, managing, and sustaining changes

Transforming Organizations

_____ 8. Knowing present realities. Skills in being keenly aware of internal and external realities

_____ 9. Identifying future ideals. Skills in being aware of best practices and clearly communicating future ideals

_____ 10. Developing and implementing a process for transforming organizations. Skills in developing a transformation process and knowing how to build a healthy, high per- formance, self-renewing organization

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Leadership Applications and Tools

Copyright © D.D. Warrick

Interpreting and Evaluating Your Results

Overall Transformational Leadership Skills Score

Underdeveloped Below Average Average Good Excellent 10–59 60–69 70–79 80–89 90–100

STRENGTHS OPPORTUNITIES FOR IMPROVEMENT

_____ Total Leading Points

_____ Total Championing Change Points

_____ Total Transforming Organization Points

_____ TOTAL OVERALL POINTS

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