Steve Jobs, Martin Luther King, Nelson Mandela, Mahatma Gandhi – these aren’t just inspiring people. They are leaders whose remarkable ability to have their followers work towards a broader vision and achieve the seemingly impossible can be called ‘transformational leadership’.
Such personalities bring both passion and compassion to the table, as well as innovation, sensitivity, persuasion, and more than a healthy dose of inimitable charisma. Adopting the style of transformational leadership as an entrepreneur is rewarding as this HR approach has ripple effects in even the remotest corner of your organization, inducing positivity and commanding change.
One of the best Indian entrepreneurs Sanjiv Bajaj, for instance, a recipient of the Asian Centre’s Transformational Leadership Award (2017) in the large-cap category and one of the top NBFC leaders in India, empowers employees at Bajaj Finserv Limited, spurring them on to be highly productive and innovative at every turn.
Transformational leaders exhibit the 4i’s – inspirational motivation, idealized influence, intellectual stimulation, and individualized consideration. Here are some critical ways where the behaviour of these personalities who come under the famous entrepreneur’s list, impacts staff performance for the better.
Job Satisfaction
Transformational leadership achieves employee satisfaction through targeted efforts aimed at improving the abilities of employees. By sharing a clear mission, these efforts lead to peak performance that meets the high standards of the leader, the organization, and the employee. As a result, employees find a sense of meaning and purpose in their work. This triggers a domino effect where satisfied employees go on to help others achieve their potential.
Organizational Commitment
Transformational leaders constantly drive employee attributes such as intellect, self-worth, maturity, and motivation. These intangibles play a key role as they help such leaders motivate the workforce to succeed beyond the limitations of self-interest and towards organizational goals. In fact, recent studies found that transformational leadership often relies on providing employees with a vision, thus building trust and developing a strong affinity with the organization.
Intrinsic Motivation
Intrinsic motivation is the purest form and result of employee satisfaction. Generating it is the primary objective of most HR strategies simply because it has been proven to improve performance and decrease burnout, among a plethora of other benefits. Transformational leadership is a pivotal factor in this process mainly because it helps in motivating employees, developing a sense of accountability and responsibility, and providing fair and honest support on matters of import.
Organisational Citizenship Behaviour
Building on intrinsic motivation, organizational citizenship behaviour (OCB) makes for a more sophisticated and devoted employee. This is when there is a complete voluntary alignment of the employee with the company. Sentiments like these are born out of pure goodwill, and in some cases, benevolence. Studies in 2017 have indicated that transformational leadership enhances organizational citizenship behaviour positively.
Such a strong attachment to the brand has many benefits, which include employees going beyond the call of duty. The employee’s macro interest is due to several factors at play, with employee-employer trust being the most important. Beyond trust, the natural qualities of a transformational leader are responsible for effecting this change. These leaders have the ability to transform and get the desired results by altering the employee’s ambition, insights, potential, and morals.
Employee Retention
Employee retention is the underpinning of any successful organization. Both longevity and success depend on the contribution of long-standing assets. Thankfully, studies have proven that transformational leaders promote better retention. In fact, they point to a strong link between transformational leadership, OCB, and employee retention.
This is fitting, considering the influential and life-changing aura that embodies a transformational leader. However, all efforts made toward retention do rely on, and heavily so, on effective communication. Leaders, here, not only inspire and influence, but also reward consistently. They influence retention decisions and enhance retention efforts through:
- Problem-solving
- Training & development
- Goal achievement
- Compelling vision
Organizational Innovation and Creativity
The effect of transformational leadership can be tangibly measured in most cases. However, when it comes to organizational innovation, there is room for interpretation. In any case, leadership has a key role to play because working innovatively isn’t a silo operation. Employees need backing and support, all of which have been found to be offered in abundance by transformational leaders.
A 2016 study suggests that this type of leadership encourages employees to be accountable for their results and take necessary risks to get there. It is the intellectual stimulation and motivation from transformational leadership that enables employees to harness the true potential of the creative environment. There is empirical data to back this relationship and how it further lends itself to boost another fruitful domain known as employee creativity.
Transformational leadership is unbelievably effective. However, it isn’t the final word on human resource management. To be a successful best Indian business entrepreneur, blend this style with others like transactional leadership to get the most out of your workforce.
