Transformational Leadership Attributes
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Chapter 3: Charismatic and Transformational Leadership: 37 Transformational Leadership Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
37 Transformational Leadership Transformational leadership focuses on what the leader accomplishes, yet it still pays attention to the leader’s personal characteristics and his or her relationship with group members. As mentioned previously, the transformational leader helps bring about major, positive changes by moving group members beyond their selfinterests and toward the good of the group, organization, or society. The essence of transformational leadership is developing and transforming people. As a result, the organization is transformed. In contrast, the transactional leader focuses on more routine transactions, rewarding group members for meeting standards (contingent reinforcement). Extensive research by Bernard M. Bass indicates that the transformationalversustransactional distinction has been observed in a wide variety of organizations and cultures.
The accompanying Leadership SelfAssessment Quiz 31 shows how transformational leadership is measured as perceived by subordinates.
Leadership SelfAssessment Quiz 32
The DualLevel Transformational Leadership (TFL) Scale
Directions: Check which of the following statements are true or relatively true in relation to a specific manager or supervisor you work for now or in the past.
THE INDIVIDUALFOCUSED TFL SUBSCALE
1. Encourages me to set high goals for myself. □
2. Communicates high performance expectations to me.
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3. Shows confidence in my ability to meet performance expectations.
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4. Demonstrates total confidence in me. □
5. Encourages me to live up to my potential. □
6. Helps me develop my strengths. □
7. Suggests training to improve my ability to carry out the job.
□
8. Provides me with developmental experiences. □
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9. Provides feedback to help me develop my abilities.
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10. Provides coaching to help me improve my job performance.
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11. Gets me to look at problems from many different angles.
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12. Challenges me to think about old problems in new ways.
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13. Challenges me to be innovative in my approach to work assignments.
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14. Encourages me to be an independent thinker. □
15. Commends me when I achieve my goals. □
16. Gives me positive feedback when I perform well.
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17. Gives me special recognition when my work is very good.
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18. Acknowledges improvement in my quality of work.
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THE GROUPFOCUSED TFL SUBSCALE
1. Encourages team members to take pride in our team.
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2. Says things that make us feel proud to be members of the team.
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3. Says positive things about the team. □
4. Encourages others to place the interests of the team ahead of their own interests.
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5. Emphasizes the uniqueness of the team. □
6. Articulates a compelling vision of the future of our team.
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7. Talks optimistically about the future of our team.
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8. Talks enthusiastically about what needs to be accomplished by our team.
□
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9. Communicates a clear direction of where our team is going.
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10. Fosters collaboration among team members. □
11. Encourages group members to be team players.
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12. Develops a team attitude and spirit among team members.
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13. Gets the team to work together for the same goal.
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14. Resolves friction among team members in the interest of teamwork.
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Scoring and interpretation: The Transformational Leadership Scale is a research instrument that subordinates respond to in relation to their manager. The greater the number of statements that apply to the manager, the more he or she is a transformational leader.
Source: Adapted from XiaoHua (Frank) Wang and Jane M. Howell, “Exploring the Dual Effects of
Transformational Leadership on Followers,” Journal of Applied Psychology, November 2010, p. 1144.
So, who is a transformational leader? One example from the retail business is Hubert Joly, a turnaround specialist, who came in from outside the company to be appointed as CEO of Best Buy. Over a period of fifteen years, Joly had developed a track record of successfully turning around companies in the media technology and service sectors.
Best Buy had been losing market share to competitors, the stock price was falling rapidly, and the former CEO was dismissed because he was having an affair with an employee. Joly helped limit Best Buy from functioning as a showroom in which many consumers would visit the stores mostly to try out merchandise, and then purchase the product online. Under Joly, Best Buy soon matched online prices but also offered the experience of touching merchandise and asking questions. Joly cut costs and reduced the workforce, particularly at company headquarters. He also emphasized selling large appliances and promoting the Geek Squad. Under the transformational leadership of Joly, both profits and employee morale showed some improvement, but enhancing sales and profits consistently proved to be a problem.
Chapter 3: Charismatic and Transformational Leadership: 37 Transformational Leadership Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
© 2016 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means graphic, electronic, or mechanical, or in any other manner without the written permission of the copyright holder.
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Chapter 3: Charismatic and Transformational Leadership: 37a How Transformations Take Place Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
37a How Transformations Take Place
Leaders often encounter the need to transform organizations from low performance to acceptable performance or from acceptable performance to high performance. At other times, a leader is expected to move a firm from a crisis mode to high ground. To accomplish these lofty purposes, the transformational leader attempts to overhaul the organizational culture or subculture. His or her task can be as immense as the process of organizational change. To focus our discussion specifically on the leader’s role, we look at ten ways in which transformations take place. (See also Figure 31.)
Figure 31
How Transformations Take Place
© Cengage Learning
1. Raising people’s awareness. The transformational leader makes group members aware of the importance and values of certain rewards and how to achieve them. He or she might point to the pride workers would experience should the firm become number one in its field. At the same time, the leader should point to the financial rewards accompanying such success.
2. Helping people look beyond selfinterest. The transformational leader helps group members look to the big picture for the sake of the team and the organization. The executive vice president of a bank told her staff members, “I know most of you dislike doing your own support work. Yet if we hire enough staff to make life more convenient for you, we’ll be losing money. Then the government might force us to be taken over by a larger bank. Who knows how many management jobs would then have to be cut.”
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3. Helping people search for selffulfillment. The transformational leader helps people go beyond a focus on minor satisfactions to a quest for selffulfillment. The leader might explain, “I know that making sure you take every vacation day owed you is important. Yet if we get this proposal out on time, we might land a contract that will make us the envy of the industry.” (Being the envy of the industry satisfies the need for self fulfillment.)
Related to helping people search for selffulfillment is for transformational leaders to help workers understand how their values fit the values of the organization (person– organization value congruence). A study conducted with 140 managers enrolled in an MBA program suggested that transformational leadership influenced work group effectiveness. The impact on effectiveness tended to be positive because of the leader’s ability to help workers understand that there was a good fit between their values and those of the organization. Visualize a leader of a group of workers engaged in the fabrication of cement pipes, and that many of the group members value helping people.
The transformational leader would be able to enhance group effectiveness by explaining how the pipes are instrumental in delivering potable water to a wide variety of people.
4. Helping people understand the need for change. The transformational leader must help group members understand the need for change both emotionally and intellectually. The problem is that change involves dislocation and discomfort. An effective transformational leader recognizes this emotional component to resisting change and deals with it openly. Dealing with the emotional conflicts of large numbers of staffers is obviously an immense task. One approach taken by successful leaders is to conduct discussion groups in which managers and workers are free to discuss their feelings about the changes. This approach has been used quite effectively when firms are downsized. Many of the survivors feel guilty that they are still employed while many competent coworkers have lost their jobs. Clearly, conducting these sessions requires considerable listening skill on the manager’s part.
5. Investing managers with a sense of urgency. To create the transformation, the leader assembles a critical mass of managers and imbues in them the urgency of change. The managers must also share the top leader’s vision of what is both necessary and achievable. To sell this vision of an improved organization, the transformational leader must capitalize on available opportunities.
6. Committing to greatness. Peter Koestenbaum argues that business can be an opportunity for individual and organizational greatness. By adopting this greatness attitude, leaders can ennoble human nature and strengthen societies. Greatness encompasses striving for business effectiveness such as profits and high stock value, as well as impeccable ethics. An emphasis on ethical leadership instills a desire for
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customer service and quality and fosters feelings of proprietorship and involvement. (A commitment to greatness is, of course, important for all leaders, not just those who are transformational.)
7. Adopting a longrange perspective and at the same time observing organizational issues from a broad rather than a narrow perspective. Such thinking on the part of the transformational leader encourages many group members to do likewise. Unless many people think with a future orientation, and broadly, an organization cannot be transformed.
8. Building trust. Another useful process for transforming a firm is to build trust between leaders and group members, particularly because distrust and suspicion are rampant during a company revival. Dave Cote, CEO of one of the world’s largest conglomerates, Honeywell International, led one of the best corporate comebacks in recent history. His greatest accomplishment in the turnaround was unifying Honeywell’s formerly fractured, disenchanted culture. At the same time, he developed a successful business strategy, including a cooperative approach in dealing with asbestos lawsuits. Cote also shifted the company to a less aggressive type of accounting, and a shift to manufacturing efficiencies. Such moves in a highly ethical direction helped Cote gain the trust of the workforce including managers.
9. Facilitating proactive behavior. Another way in which transformational leaders bring about transformations is to facilitate proactive behavior on the part of subordinates. By being proactive, subordinates take the initiative to bring about positive change. Imagine a Best Buy store manager who responds positively to the change efforts of the CEO Hubert Joly. The store manager is likely to encourage store associates to listen more attentively to customer inquiries and provide useful suggestions. Proactive behavior is facilitated by giving group members more autonomy, or the opportunity to make decisions independently, as revealed in a study of sixtynine companies in the Netherlands. In addition to being granted autonomy, workers are more likely to be proactive if they have selfperceived ability to perform proactive tasks successfully (role breadth selfefficacy).
10. Concentrating resources on areas that need the most change. The turnaround artist or transformational leader cannot take care of all problems at once in a troubled organization. A practical strategy is to get around limitations on funds, staff, or equipment by concentrating resources on problem areas that are most in need of change and have the biggest potential payoff. For example, when police chief Bill Bratton turned around the muchmaligned New York Police Department in the mid1990s, he concentrated resources on the narcotics squad because so much crime is related to narcotics. During Brattons’s tenure as the head of the NYPD, serious crime dropped by 33 percent and the murder rate decreased by 50 percent.
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Chapter 3: Charismatic and Transformational Leadership: 37a How Transformations Take Place Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
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Chapter 3: Charismatic and Transformational Leadership: 37b Attributes of Transformational Leaders Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
37b Attributes of Transformational Leaders
Transformational leaders possess the personal characteristics of other effective leaders, especially charismatic leaders. In addition, a compilation of studies suggests that nine qualities are particularly helpful in enabling leaders to bring about transformations. Our discussion of those qualities follows.
Above all, transformational leaders are charismatic. Two key personality factors enhancing their charisma are agreeableness and extraversion, which combine to enhance their interpersonal relationships. Of these, extraversion had the biggest impact. Included in the charisma of transformation leaders are their optimism and their openness to the viewpoints of others. An example of a charismatic, transformational leader is Akio Toyoda, the president of Toyota Motor Corporation. Among his charismatic behaviors are race car driving, being a TV pitchman for his company, and having a rock star persona. Among the transformations he is credited with are helping Toyota overcome the effects of an embarrassing 2009 recall, and the effects of the 2011 earthquakes that severely damaged the company’s production facilities.
Unless they are the brutal slashandburn type of turnaround manager, transformational leaders have the respect, confidence, and loyalty of group members. One reason is that managers who use the transformational leadership style tend to score higher on emotional intelligence. A specific attribute here is that transformational leaders read emotions well.
Similar to effective leaders in general, transformational leaders often have positive core self evaluations. (As described in Chapter 2, this composite personality factor is composed of self esteem, locus of control, generalized selfefficacy, and emotional stability.) A study conducted with three hightech companies in China found that leaders with positive core evaluations were more likely to be perceived as transformational by subordinates.
Charismatic, transformational leaders create a vision. By communicating a vision, they convey a set of values that guide and motivate employees. The vision describes an optimistic picture of what the organization will become after the transformation is complete, such as a division being threatened with being shut down becoming the leading division in a conglomerate.
Although transformational leaders are often greatly concerned with organizational survival, they also take the time to encourage the personal development of their staff. As group members develop, their performance is likely to increase. Transformational leaders also give supportive leadership, such as by giving positive feedback to group members and recognizing individual achievements. Supportive leadership also contributes to the development of group members.
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Transformational leaders, like most effective leaders and managers, practice empowerment by involving team members in decision making. Empowerment is a key component of developing group members. Innovative thinking, another important characteristic, helps transformational leaders achieve their goals; for example, they might develop innovative ways to raise cash and cut costs quickly. Transformational leaders encourage their staff to think innovatively as well and give them challenging assignments. As with other effective leaders and managers, they also lead by example. During a period of costcutting, for example, a transformational leader might fly business coach and eat in the company cafeteria instead of having gourmet food catered to his or her office.
A study conducted with 132 managers and 407 subordinates indicated that managers who are perceived to be transformational score higher on a test of moral reasoning than do transactional leaders. In contrast to the type of transformational leaders in the study just mentioned, those who specialize in rescuing failed corporations do not appear to score high in moral reasoning. Such actions include shutting down many company facilities, laying off much of the work force, and canceling contracts with various vendors.
Not every leader classified as transformational will have the nine characteristics just described. For example, some transformational leaders are brusque with people rather than agreeable. Furthermore, it is not always easy to determine whether a given leader can be accurately described as transformational. Sometimes situational forces contribute more heavily to the turnaround than do the leader’s personal qualities. The director of an indoor tennis club was complimented about how he transformed the club from one that was close to bankruptcy and short on membership. He replied, “It wasn’t me. Two of our competitors closed down and we picked up a lot of their membership.”
Chapter 3: Charismatic and Transformational Leadership: 37b Attributes of Transformational Leaders Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
© 2016 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means graphic, electronic, or mechanical, or in any other manner without the written permission of the copyright holder.
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Chapter 3: Charismatic and Transformational Leadership: 37c The Impact of Transformational and Charismatic Leadership on Performance and Behavior Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
37c The Impact of Transformational and Charismatic Leadership on Performance and Behavior
Although the present discussion deals primarily with transformational leadership, we also include the impact of charismatic leadership because the two overlap. The general picture of the impact of transformational leadership is that, at its best, it can arouse followers to a higher level of thinking. Transformational leaders appeal to the ideals and values of their constituents, thereby enhancing commitment to a carefully crafted vision. Followers are inspired to develop new ways of thinking about problems. Group members become more responsible because they are inspired, and they engage in more constructive behavior such as organizational citizenship behavior—or helping out even without the promise of a reward. Workers who report to transformational leaders are even more likely to have a positive mood throughout the workday.
Here we look at several empirical studies about the effects of charismatic and transformational leadership in work settings. The studies summarized here are also useful in understanding how transformational leadership affects behavior.
Overall Validity of Transformational Leadership
Timothy A. Judge and Ronald F. Piccolo reviewed eightyseven studies to examine the impact of transformational leadership on various measures of performance. The researchers also evaluated the impact of transactional leadership and laissezfaire leadership on performance. Laissezfaire leadership is a style that gives group members the freedom to do basically what they want with almost no direction. The three approaches to leadership were measured by questionnaires based on subordinates’ perceptions.
Transformational leadership showed the highest overall relationships on six criteria:
follower job satisfaction,
follower leader satisfaction,
follower motivation,
leader job performance,
group or organization performance, and
rated leader effectiveness.
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Interestingly, transactional leadership was also shown to produce good results, and laissez faire leadership was associated with negative results. Unlike previous studies, transactional leadership showed a strong positive relationship to transformational leadership. (Ordinarily, transformational leadership and transactional leadership are negatively related because transformational leaders are said not to engage in routine transactions with group members.) Transformational leadership was negatively related to laissezfaire leadership. The explanation is most likely that transformational leaders are actively involved with group members.
Team Level Performance
Transformational and charismatic leadership also have positive effects on work teams. A study investigated the relationship between charismatic leadership behavior and team performance in both work settings in the United States and India, and in teams working on a simulation project in a business strategy course. As part of the same study, the researchers investigated how being part of a network influences perceptions of charisma. A major finding was that leaders who are in a central position in an advice network tend to be seen as charismatic by subordinates. In turn, leader charisma inspires and facilitates team performance, as rated by managers and the course instructor.
Organizational Level Performance
A group of researchers studied the impact of leadership effectiveness on organizational performance that reinforces several of the ideas already presented in this book. Data were collected from 134 midlevel managers from a large Brazilian energy company. The personality traits of the participants and transformational leadership were measured by questionnaires completed by subordinates, and performance was measured by both ratings from superiors and company records. The findings indicated that leadership effectiveness as measured by organizational outcomes (or business results) was a direct function of the leader’s transformational behavior. Furthermore, intelligence and conscientiousness are the individual differences that contribute the most to being a transformational leader. A study of this nature emphasizes how transformational leadership can benefit organizations.
The accompanying Leader in Action insert illustrates a leader who helps bringing about major changes in one of the world’s best known business corporations.
Leader in Action
Mary Barra, CEO of GM
In early 2014, the product global chief of General Motors Co., Mary Barra, was named the new company CEO. When Barra, age 51 at the time, was appointed to this position, she was the first woman to become CEO of a major vehicle manufacturer. Departing CEO Dan Akerson stated that he picked Barra to be his successor based on her ability to “make order out of chaos.” In March 2014 Barra faced the chaos of the
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recall of 2.53 million cars for faulty switches, and 1.3 million vehicles for power steering problems.
As the head of product development as well as global purchasing and supply chain, Mary Barra was the highestranking woman in the global automobile and truck industry. She was promoted to head of product development in 2011. Previous to her appointment as head of product development, Barra spent four years as Vice President, Global Human Resources. Joining GM after graduation as an electrical engineer, she was soon identified as a personal with executive potential. She moved up the corporate ladder steadily in jobs in manufacturing, administration, and internal communications before the HR position.
Dan Ackerson, the CEO of General Motors, regards Barra as one of his key change agents in his efforts to remake the often slowmoving company culture. Ackerson identifies Barra as “a strong leader and change agent who knows the business inside and out.” He placed Barra on his short list of internal candidates to be his successor.
In 2013, Barra told the Most Powerful Women Summit organized by Fortune magazine that her directive to GM’s designers and engineers is simple, “No more [expletive meaning poorly made] cars, with no excuses.”
In one of her initiatives to change the culture, Barra has helped GM loosen the controls over engineers, allowing them more creative freedom with vehicles. She said her approach is “empowering them to make the decisions, and I think you see it with some of the vehicles we just put out, whether it’s the Chevrolet Impala or the Cadillac CTS or the Corvette.” One of the organizational complexities Barra wants to change is the practice of having twelve executive chief engineers responsible for every automobile, truck, or crossover that the company makes around the world. (Barra perceives this practice as too complex.)
As the head of HR, she deleted a tenpage dress code section in the HR handbook and replaced it with two words, “dress appropriately.” Barra said that GM was entrusting its employees with million dollar budgets but did not think that employees could dress for work without detailed instructions. She believes that this same approach to simplicity can be applied throughout the company in its various processes and mechanisms.
Barra believes that her thrust for creative freedom and simplicity will strengthen GM in the long term. She is adamant about leading by persuasion rather than direct commands. Barra said that when employees say “I’m doing it because Mary told me to do it” is the day she loses.
Barra received a bachelor of science in electrical engineering (BSEE) from the General Motors Institute (now the Kettering University). Later she graduated with an MBA from Stanford University. She was raised in a GM family, with her father having been a diemaker in a Pontiac plant for 39 years.
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Questions
1. Why might Barra be classified as a transformational leader?
2. What relevance might Barra’s experience in HR have for the product development of vehicles?
3. Based on whatever information you might have available, how well is Mary Barra doing as the CEO?
Sources: Original story created from facts and observations in the following sources: Alex Taylor III, “Big
Wheel at GM,” Fortune, December 24, 2012, p. 22; Justin LloydMiller, “For GM’s Mary Barra, Simplicity
is the Key to Quality,” Wall Street Cheat Sheet ( http://wallstcheatsheet.com). October 21, 2013; TTAC
Staff, “GM Puts Mary Barra In Charge of Purchasing Too, Says ‘No Excuses…No More Crappy Cars’,”
The Truth about Cars ( www.thetruthaboutcars.com), October 24, 2013, pp. 1–28; Beth Kowitt, “GM’s
Mary Barra to Staff: ‘No More Crappy Cars,’” CNNMoney ( http://management.fortune.cnn.com), October
16, 2013, pp. 1–2.
Chapter 3: Charismatic and Transformational Leadership: 37c The Impact of Transformational and Charismatic Leadership on Performance and Behavior Book Title: Leadership: Research Findings, Practice, and Skills Printed By: Frank Romaine ([email protected]) © 2016 Cengage Learning, Cengage Learning
© 2016 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means graphic, electronic, or mechanical, or in any other manner without the written permission of the copyright holder.
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