Transformational Leadership and How It Impacts Sales

Transformational leadership has become one of the most popular leadership styles as it puts the individual at its core. Transformational leaders focus on inspiring and motivating team members in a mutually beneficial growth path. It is an approach where the leader encourages followers to go through changes positively while developing and improving their qualities and skills as individuals for the greater good of the company.

Transformational Leadership Style

This specific leadership style has many benefits as it can address the collective consciousness to raise mutual levels of moral standards and motivation (as well as sales team motivation). If you are unsure whether transformational leadership is the most effective leadership style for your core business, we have produced a brief overview of the core values and management style that are typical of a transformational approach. To better understand the concept of transformational leadership style, you need to define the term “transformative”, which is the process of causing a meaningful change to a company. The transformational style can drive positive development among the team, which motivates employees to achieve unexpected or remarkable results. So how do you create an inspirational, positive change in your business?

Transformational Leadership and How It Impacts Sales

According to Bernard Bass, Professor of organisational behaviour at Binghamton University New York, a transformational leader inspires people to succeed. In the leadership community, transformational leaders create a win-win situation, where the more they inspire followers and share their core values, they become even better leaders.

Transformational leadership and transactional leadership are often confused. However, it’s important to understand the difference between a transformational leader and a transactional one. Transformational leaders focus primarily on motivating and encouraging positive transformational behaviours by becoming enabling role models for the team. On the other hand, a transactional leader focuses on short-term success by rewarding desired behaviours. The starting point of the leadership transformational approach is to inspire workers to commit and engage with the change. Transactional leadership, however, uses micro-management and incentives to enable the change.

According to recent studies, transformational leadership creates an environment where employees have better understanding and engagement levels. Therefore, rather than self-interest leadership, the transformational style makes workers feel part of the common business goal. They have an increased sense of well-being on the job and are also more likely to drive high financial performance with better sales methodology or deal closing techniques as a result.

Transformational Leadership Examples

One of the most famous examples of transformational leadership is Apple, under Steve Jobs’ leadership. It’s worth remembering that Jobs was first fired and then called back to Apple to bring a new organisation to revive the brand. Jobs’ leadership brought transformation to the company as he initially introduced the trademark iPhone product. Every leadership expert continues to refer to Steve Jobs as one of the most successful examples of transformational leadership skills, ultimately enabling Apple to:

• Gain trust from employees
• Continue to exist in a tough tech environment against strong Asian competitors
• Change expectations of the brand to deliver service excellence for all, employees and customers

In comparison, it’s easy to understand why transactional leaders failed to maintain Apple’s position on the market until Jobs’s return.

Another famous example of an effective transformational leader is Amazon, where Jeff Bezos utilized his CEO job to deliver a dual transformation, revolutionizing the experience of selling and reading books. Under his leadership, Amazon became a leading online retail platform that now offers a variety of products and services.

Other leadership styles tend to lack the opportunity to identify growth areas, transform a market and motivate followers inside and outside the business. Transformational leaders deliver a 360-degree approach that encompasses workers’ and customers’ well being, included service excellence and individual growth potential.

Transformational Leadership Theory

In the transformational leadership theory, transformational leaders can exist at varying levels of the organisation. It isn’t only the CEO job to deliver leadership inspiration. Leaders throughout teams, divisions, departments, and services can deliver transformational leadership by applying the model’s main characteristics.

New leaders can find it tricky to learn the elements of transformational leadership as they combine different leadership theories. First introduced by leadership expert James MacGregor Burns through his studies of political leaders, the term is often used in comparison with transactional leadership. Burns identified that transformational leaders work on transforming their followers to support the business as a whole and each other. Yet, it’s Professor Bass who established the psychological mechanisms used by leaders.

4 I’s of Transformational Leadership

As per Bass’ study, a transformational leader will refer to 4 core elements to establish transformational leadership:

1. Idealized Influence: A successful transformational leader doesn’t expect workers to do anything they wouldn’t do themselves.
2. Inspirational Motivation: You can’t motivate employees without a clear vision. Therefore, transformational leaders maintain transparent, articulated, and open communication to ensure employees get a strong sense of the business values.
3. Intellectual Stimulation: Transformational leaders believe in workers’ autonomy of thinking and creating new ideas. They inspire employees to question the status quo and improve their knowledge through training programs.
4. Individualized Consideration: Unlike the transactional approach where communication is unidirectional, transformational leadership encourages conversations and exchanges throughout the company. Business models built on open communication strengthen their shared vision and drive new ideas.

The four elements are indispensable to the success of transformational leadership. Indeed, leaders are often perceived as role models who lead by example and encourage a work environment where innovative creativity meets the business values, and individual workers are recognized for their contributions.

Transformational Leadership Of Yesterday And Today

Perhaps the greatest examples of transformative leadership can be learnt from the founding fathers, those American Presidents who made the USA what it is today. Abraham Lincoln, entering the presidency at the gravest moment in American history, used his transformative leadership style to get through unfathomable challenges including the Civil War, the breakup of the United States of America and slavery.

Presidential biographer Doris Kearns Goodwin outlined the transformational leadership qualities demonstrated by Lincoln and today, almost 150 years later, they are still relevant and relatable:

• Acknowledge when failed policies demand a change in direction. Don’t flog a dead horse!
• Gather first-hand information by listening and asking questions from those at the coal front
• Find time and space in which to think
• Exhaust all possibilities of compromise before imposing your executive power
• Anticipate and embrace contrasting viewpoints
• Assume full responsibility for a pivotal decision
• Understand the emotional needs of each member of the team
• Refuse to let past resentments fester; transcend personal vendettas
• Set a standard of mutual respect and dignity; control your anger, manage your stress
• Shield colleagues from blame
• Maintain perspective in the face of both accolade and abuse
• Find ways to cope with pressure, maintain balance, replenish energy
• Keep your word, tell the truth
• Know when to move back and when to move forward
• Combine transactional and transformational leadership – there is place for both

“Transformational leaders inspire followers to identify with something larger than themselves- the organization, the community, the region the country…such leaders call for sacrifice in the pursuit of moral principles and higher goals…looking beyond the present moment to frame a future worth striving for”

Charismatic vs. Transformational Leadership

Leaders can often confuse transformational leadership with other styles that also rely on strong communication practices. Charismatic leadership is another leadership model that relies on communication skills, intelligence, drive, empathy with workers. A charismatic leader relies on their communication skills, charm, and persuasiveness to reach the desired effect. However, they often attempt to sell their own ideas rather than create an open creative exchange path. A charismatic approach can also lack people’s focus, revolving only around the leader. On the other hand,
transformational leaders encourage new ideas and status quo challenges through exchanges.

Another example of a strong communication style is the therapist leadership, which delivers a people-focused approach to encourage a harmonious atmosphere. With a focus on communication and individual growth, this style relies on a strong EQ. However, it can be ineffective to achieve positive results within a deadline.

Transformational Leadership Behaviour

Transformational leaders need to reinforce behaviours that:

• Pay attention to their followers, encouraging interpersonal discussions and evaluation to meet their needs.
• Stimulate creativity and intellectual curiosity to help workers question established strategies, services, and products.
• Share an inspiring and motivational vision.
• Act as mentor and role model, giving followers a sense of achievement and contribution to the organization as a whole.

Transformational Leadership Conclusion

In conclusion, transformational leaders play a significant role in developing a business culture that encompasses both employees’ self-interest and overall business growth. The introduction of psychological hooks that help stimulate and inspire followers makes this leadership model a highly effective strategy. However, it’s essential for leaders to put workers’ well being and happiness first, ensuring that the drive for innovation and productivity doesn’t lead to burnout. To see how you or your team could benefit from our sales consultancy feel free to get in touch today.