Advantages and Disadvantages of Transformational Leadership

The goal of any type of leadership is to get employees to perform beyond the expected. While transactional leaders do this by meting out rewards and punishments, transformational leaders do this by influencing the values and attitudes of others. It takes a special type of person to deliver an inspiring vision of the future, and there are pros and cons associated with this leadership style.

What Is Transformational Leadership?

Transformational leadership occurs when leaders perform their roles so effectively that they gain the trust, respect, appreciation and loyalty of the people who follow them. This, in turn, changes (transforms) people's behaviors. It's completely different from the transactional style of leadership that is the fall-back position for most business organizations.

With the transactional style of leadership, the leader motivates people to work harder by offering rewards (promotions, bonuses, paid vacation) for good behavior, and punishments (demotions, improvement programs) for poor behavior. The motivation to work hard comes from outside the employee.

With transformational leadership, employees are intrinsically motivated (motivated from within) to follow the leader's example because they respect the leader so much. The leader creates an inspiring vision of the future that people feel compelled to follow. She also serves as a role model for her team.

History and Development of Transformational Leadership

U.S. leadership expert James McGregor Burns originated the model of transforming leadership in his 1978 book, Leadership. According to Burns, transforming leadership is a process in which "leaders and followers help each other to advance to a higher level of morality and motivation." Burns believed that great leaders create significant change in the lives of people and organizations – transforming them. They do this by articulating an energizing vision and setting challenging goals.

A few years later, the distinguished academic Bernard M. Bass took Burns's theory one step further. In his 1985 book, Leadership and Performance Beyond Expectations, Bass sought to explain how, psychologically, transformational leaders affected the motivation and performance of their followers. Bass was also the first to use the term transformational instead of transforming to describe this kind of leadership style.

Success Factors in Transformational Leadership

Transformational leaders have high expectations for themselves and others. But instead of laying down the law, these leaders "walk the walk" and model the standards of behavior they expect from the team. In this respect, they:

  • Set clear and consistent goals.
  • Encourage others.
  • Lead through influence and charisma.
  • Are models of integrity and fairness.
  • Inspire others to rise to challenges.
  • Encourage people to look beyond their self-interest toward the greater good of the organization.

Another way to describe transformational leadership is through the four components, or behaviors, that differentiate transformational leaders from other types of leaders. Bass described these as:

Individualized consideration, or the degree to which the leader attends to the needs of each follower, keeping communication open and offering empathy and support. The leader respects his followers as individuals and values the contributions that each follower can make to the team.

Intellectual stimulation, or the degree to which the leader encourages creativity in his followers. He does this by challenging assumptions, brainstorming ideas and taking risks. Followers are encouraged to ask questions, think deeply and find a better way to perform tasks.

Inspirational motivation, or the degree to which the leader articulates an inspiring vision that communicates optimism and drives the company group forward. Followers are motivated to work harder because they're driven by the leader's vision of the future and believe in their own abilities.

Idealized influence, or the degree to which the leader provides a role model for ethical behavior. Followers do as the leaders asks because he instills pride, gains respect and earns their trust.

Transformational Leadership Advantages and Disadvantages

Why is the transformative leadership style becoming popular – and to some extent, necessary? One of the main benefits of the transformational leadership style is that it treats people as individuals. Transformational leaders regard their followers as equals, each with his own skills and experience, and seek to bring out the best in them through coaching and encouragement instead of barking orders. Employees feel supported, so they work hard and stay.

It isn't all good news, however. This particular way of leading can elevate the company to new highs, or drop it to new lows, depending how the leader exercises her power. As with any management style, there are pros and cons of transformational leadership you need to consider before deciding if it is right for your organization.

Advantage: United in a Common Cause

Transformational leaders stand out in their ability to quickly analyze a company's current situation and create a righteous vision for its improvement and growth. Through passion and influence, the leader communicates her vision to employees to get everyone on board. Employees are motivated to do what is asked of them because the whole work experience is perceived as a purposeful and enjoyable adventure.

In terms of bottom-line results, the organization should see productivity gains when a transformational leader comes on board. It's much easier to optimize performance when everyone is pulling in the same direction, as all people can see the big picture and feel united in a common cause.

Disadvantage: It's Too Big-Picture

It's one thing to rally support for the big-picture vision, but quite another to actualize that vision with clear operational strategies on the ground. One of the main weaknesses of transformational leadership is that it's too conceptual and is missing the task focus that some employees need to guide them as they go about their duties. Transformational leaders don't like to get bogged down with details, but every organization needs operational planning to help it achieve its vision.

Advantage: Reduces Turnover Costs

Employees come and go – and when someone goes, it can cost the organization dearly in terms of finding and training a replacement. Transformational leadership seeks to lower staff turnover by making people feel more engaged and included in the organization.

United behind the leader's vision, employees are more likely to feel like they fit in, like they're sharing the same goals with co-workers, and that they are not lonely. People who match the culture and behaviors of the business tend to stick around, which decreases turnover.

Disadvantage: Can Lead to Employee Burnout

While some will feel inspired by a transformational leader, others feel their presence as a constant pressure. Transformational leaders put a lot of emphasis on authenticity – living and breathing the company culture and values. This constant push to achieve the grand vision and to continually take pride in the company's achievements can lead to demotivation and burnout in some employees. It sends the message that much more is required than simply turning up, doing a great job, and then going home.

Advantage: Creates and Manages Change

For companies to evolve, they must be willing to embrace change. However, change is notoriously tricky to implement because many people are resistant to it. Usually, it's because they are scared of the unknown or feel suspicious that the new situation will be worse than the old way of doing things.

What's special about transformational leaders is their ability to sell the benefits – and the morality – of the change by creating an inspiring new vision and getting people to buy into it. This style of leadership focuses on the positive impact of the change "for the greater good" and tells people how they can contribute to it. This makes it much easier for employees to embrace the change – and even enjoy it.

Disadvantage: Can Be Risky and Disruptive

The problem with change is that it becomes disruptive if it happens too frequently, and detrimental if the leader takes excessive or unnecessary risks. Companies often hire a transformational leader with the specific goal of creating change within the organization. But danger comes when the transformational leader fixates on change as the end game, instead of something positive for the organization.

If the leader fails to objectively assess whether this particular change at this time and for this organization is the appropriate response, it is more likely to produce negative outcomes.

Advantage: Keeps the Company Open and Ethical

Integrity is a core value of transformational leaders: Their entire sphere of influence is based upon them being transparent and openly living the values they've established for the organization. For this reason, a transformational leader is going to be laser-focused on doing the right thing. They tend to be values-driven and ethics-focused, which encourages the company's employees to stick to the straight and narrow and act in the best interest of the company and its wider communities.

Disadvantage: Carries a High Potential for Abuse

But what if the transformational leader's version of "doing things the right way" is actually the wrong way for the organization and the people within it? Sometimes, a charismatic leader will stridently follow a vision that is not a force for good. Experts often cite Adolf Hitler and Osama bin Laden as examples of transformational leaders, so there can be a dark side to this style of leadership.

Advantages: Promotes Morale Through Better Communication

One of the biggest issues businesses face is low morale, which usually occurs when the work environment grows stale, people are unclear of their job role or duties, or there's a lot of intra-group conflict. More often than not, the root cause of these problems is poor communication.

Transformational leaders are, by definition, excellent communicators. They must provide clear and consistent messages to rally people behind their vision of the future. When a company has a communication problem, it often brings in a transformational leader to articulate the corporate message clearly, reminding people of why they're doing what they're doing and breaking them out of the old routine.

Disadvantage: Requires a Continuous Feedback Loop

The other side of communication is that it really only works if there's continuous communication available. Transformational leaders rely on keeping enthusiasm levels high, and that takes a lot of work and a lot of meetings and feedback – week in, week out – to be successful. The second that communication breaks down, and an employee feels left out of the loop, then there's a risk that he will lose commitment to the vision.

Advantage: Gives Employees a Lot of Freedom

Unlike the transactional style of leadership, which uses clear chains of command, rewards and punishments to motivate workers, the transformational style of leadership gives workers a lot of personal freedom. Workers are valued for their skills and experience and are trusted to perform tasks to the best of their ability.

In other words, transformational leaders do not use their position to control others, but to inspire them. The entire system is based on motivation coming from within instead of through the carrot-and-stick approach.

Disadvantage: Leaders Lose Power If People Disagree With Them

What if employees do not agree with the leader's vision? Transformational leadership relies on employees being intrinsically motivated to work hard, but if those employees are not hearing, feeling and connecting with the vision, then intrinsically motivation will be lacking. Worse, there may be insufficient transactional motivators in place (rewards and punishments) to encourage any type of response, and that imbalance is the reason why transformational initiatives can fail.

Fundamentally, a transformational leader's power is his influence. If someone disagrees with the leader's vision for the organization, then he loses the ability to influence them, and he loses all his power.