What is transformational leadership?
Transformational leadership is only one of many styles of leadership, but it has attracted a great deal of attention due to its perceived benefits. In this article, we’ll look at what transformational leadership involves and how it can be applied in the social entrepreneurship space. We’ll also answer the key questions around whether social entrepreneurs are – or should be – transformational in their leadership style.
A key aspect of transformational leadership (“TL”) is the fact that it involves the leader working with their team, rather than in a rigid hierarchical structure. The process of TL is deceptively simple:
The first step is to identify the problem that needs solving. In our case, this could be the lack of meaningful economic opportunities for women. Often, a problem will be obvious – the leadership aspect comes into play in defining and delimiting it, devising a solution, and encouraging team members to believe in and work towards the desired outcome.
What behaviours are associated with transformational leadership?
The key behaviours that comprise TL are often referred to as the “4 I’s”:

Inspirational motivation
A leader can only lead if others are prepared to follow. This means that the leader must be able to inspire them by convincing them of the merits of the course of action they have embarked upon, the positive outcomes it could lead to, and the likelihood of success.

Idealized influence
The ability to influence others can be used to both positive and negative ends. In the case of TL, the requirement is that the leader can help the team members to see the value in what they are doing, and the means will be justified by the end (that is, the improved situation that will result).

Intellectual stimulation
Few things are as demotivating as repetitive, boring tasks – employees or team members are unlikely to give of their best when they feel they are being treated like robots. No matter what their level of skill or experience, every team member believes that they can do more – and a transformational leader will recognise this and give them the opportunity to prove themselves.

Individualized consideration
Every team is made up of individuals – it is not a homogenous mass. Within the team, people will have different priorities and concerns, skills and weaknesses. It is up to a transformational leader to work with all these variables and align them with the overall goals of the team. This can only be done by recognising each individual and ensuring that they know that their differences are respected.

What are the characteristics of a transformational leader?
All leadership roles come with responsibilities and transformational leadership (“TL”) in particular is not for everyone. While an exponent of TL needs to be a team player, they also have to have the confidence and self-belief to put themselves forward as a leader and to be know that their vision for change – and how it can best be achieved – is the correct one for their organization.
A transformational leader must be a visionary; they need to be able to see the bigger picture, even if others cannot. That implies a strong sense of purpose.
To inspire others, a transformational leader needs to be charismatic and able to be a strong role model. This requires leading by example, and understanding what it is they are asking their team to do – especially if this involves making necessary sacrifices.
While staying true to a vision is vital, there are some key tests that this vision must pass: it must be easy to articulate, so that it can be shared, and it must be flexible. Circumstances can change overnight and render yesterday’s grand idea obsolete.
Along similar lines, a transformational leader needs to be blessed with creativity and must always remain open to new ideas, as well as to experiences. These character traits are aligned to being expressive (communication is a vital TL skill) and emotionally responsive – TL is impossible in the absence of empathy. While a leader of any kind is always to some extent a person set apart,
This is often referred to as the “extravert” personality type, the key features of which are affiliation (the ability to interact with others) and agency (the ability to inspire or command others). Finally, to be able to inspire others, a transformational leadership must be authentically committed to the project outcomes, and genuinely conscientious.

Advantages of transformational leadership
While TL is geared towards creating organisational change, perhaps its greatest advantage is the way that it can result in positive change in team members. When people are given a greater degree of autonomy and the authority to make decisions, they are likely to feel more valued and will find it easier to engage with the overall project goals.
Human psychology dictates that giving people the belief that they can do more than they previously thought possible, if often turns out that they can. This improved motivation and morale can lead to enhanced performance and teams achieving exceptional results.
A good transformational leader will set high but achievable goals that stretch their teams, but are not so daunting that they become demotivating. TL can give team members a sense of identity (especially when they can identify with the organization and its goals, and the organization’s values are aligned with their own). Engaged employees will feel a sense of ownership and will also feel empowered when the tasks they have been assigned are compatible with their skills and the resources available – although engineering an element of stretch here can be key to unlocking truly exceptional performance.
TL is also noted for its ability to promote growth and improvement on both an individual and organizational level, and for fostering strong relationships between team members who share values and objectives.

Transformational versus transactional leadership
One useful way to illuminate TL is by considering what it isn’t – and perhaps the best means of doing this is by comparing it to a more traditional, transactional style of leadership. As its names implies, transactional leadership is based on a bargaining model: if you do x, I’ll do y. This could be as basic as if you carry out this task, I’ll pay you. Or at its crudest, if you do this, I won’t have to fire you.
This reward or punishment approach depends on supervision, and leaders that adopt it are more likely to be feared that respected.
In contrast, TL has been shown to increase team member satisfaction and performance and to enhance organizational effectiveness – both of which can be considered to be positive outcomes.

Possible disadvantages of transformational leadership
While transformational leadership has distinct advantages, concerns have been expressed that is only really effective in SMME scenarios and is not applicable to larger corporations. This is due to an observed tendency for practitioners of TL to succumb to the temptation to selectively mentor or coach team members (most likely those who are most engaged). This can lead to other employees being effectively left behind, which can limit the benefits for the organization as a whole.
Perhaps the most telling critiques of TL focus on the nature of the leaders themselves. Visionaries can lose focus on operational details (in contrast to transactional leaders, whose desire for control can lead to destructive micro-management). Transformational leaders are at risk of flying at such rarefied altitudes that they become divorced from reality.
History is littered with examples of leadership that has had catastrophic results for followers, and here a note of caution must be struck. If a leader who is able to exert influence sets off in the wrong direction, the hold that they exert on team members may be so strong that no-one questions them. Excessive or misplaced loyalty can lead to a collective failure when no-one acts to avert an impending disaster.
In a business context, blind following of a transformational leader can result in risks being taken, or excessive demands (leading to burnout) being made of team members. An important check built into the TL management approach is to consider whether a particular course of action is in the team members’ best interests, and not only those of the organization.

Links to social entrepreneurship
There are clear parallels between social entrepreneurship and transformational leadership. Social entrepreneurs are motivated by developing and implementing solutions to problems they perceive in their communities or environment.
By definition, then, they are looking to transform an existing situation. “Transformation” and “social solutions” can be considered to be one and the same in this context.
Although a social entrepreneur may not be part of an organization – indeed, and especially in the early stages of their careers, they are likely to be sole traders – they are just as committed to – and capable of achieving – transformation.
This will be on a familial, social or community level rather than within an organization – however, the outcomes can be equally affirmative.
Social entrepreneurs can be considered to be TL practitioners in the following ways:

  • They inspire others;
  • They influence those around them;
  • They are relatable and empathetic;
  • By addressing immediate social, cultural or environmental issues, social entrepreneurs show common cause with their neighbours;
  • They are focused on positive outcomes;
  • They are able to see the bigger pictures; and
  • They are leaders in their own right.

Fondation-LAB and transformational leadership
At Fondation-LAB, we are passionate advocates of TL in the context of social entrepreneurship. We believe that social entrepreneurs are change agents both through their entrepreneurial activities and through acting as mentors to the next generation of social entrepreneurs – those who will follow in their footsteps, and achieve more than they could ever have thought possible.