Developing technology, shifting politics, and even public health crises such as the COVID-19 pandemic can strongly influence how industries operate. The result is an ever-changing business landscape that calls for leaders able to identify innovative ways to adapt. That’s why today’s organizations, for-profit and nonprofit alike>need leaders prepared to embrace change.
To overcome emerging obstacles in their industries, professionals should first understand how to become a transformational business leader.
What Is Transformational Leadership?
Transformational leadership encourages employees to create fundamental changes that help a company grow. Leaders who adopt this practice recognize that an organization’s growth depends on its ability to embrace change. As such, they work to build corporate cultures that give workers independence and room to be imaginative. They also motivate employees to explore creative solutions and take ownership of decision-making in their areas of expertise.
In transformational leadership, leaders and their teams elevate each other’s morality and enthusiasm. Instead of giving orders and expecting others to follow, transformational leaders win people over by helping them feel impassioned about their work. This is in part accomplished by cultivating work environments characterized by:
- Regular support and recognition
- Goal setting
- Integrity and fairness
- Inspiration to achieve goals
The Benefits of Transformational Leadership in Businesses and Nonprofits
Transformational leadership benefits businesses and nonprofits alike. Consider the following ways this leadership approach can make an organization a better place to work while strengthening its reputation and competitiveness:
Improving Employee Retention
Transformational leaders project a meaningful vision that inspires workers to follow them out of respect and admiration. Workers who are intrinsically motivated often perform better, which can result in higher productivity. Transformational leadership also increases employee engagement, meaning workers feel a greater sense of inclusion and purpose, as well as commitment to company goals. This often strengthens relationships within an organization and reduces turnover.
For companies to develop, they need to adapt to shifting environments and circumstances. However, implementing change isn’t always easy. Workers often resist the unknown, but when they belong to an organizational culture rooted in transformational values, they tend to feel less suspicious of letting go of old ways and exploring new possibilities.
Encouraging Ethical Behavior
Transformational leadership requires transparency so that leaders earn the trust needed to implement organizational change. Keeping internal communication open and transparent makes organizations more ethical and values-driven.
Transformational leaders grant workers more freedom than leaders who enforce more rigid chains of command. They also recognize workers for their talents and trust them to work independently. This combination of trust and recognition creates environments especially conducive to creativity.