Constant organisational change in order to address increasing customer demands has become one of the basic realities of modern marketplace. However, it has been stated that “most efforts by executives, managers, and administrators to significantly change the organisations they lead do not work” (Burke, 2011, p.11). There is a wide range of reasons for this that primarily relate to the leadership style of organisational leaders, as well as, their abilities to embrace and practice the changes they promote as a role model.

This article critically analyses the main sources of motivation for senior management interest in the concept of transformational leadership. The article starts with discussing the main characteristics of transformational leadership and provides explanations for growing senior management interest in the concept along a wide range of industries in the global marketplace.

This is followed by in-depth discussions about relationships between transformational leadership style and change within organisations. A greater scope for the essay has been achieved through discussing a range of relevant change management concepts and theories that include Kurt Lewin’s change process, Burke-Litwin change model, and Kotter’s eight steps change tool.

 

Main Characteristics of Transformational Leadership

Increasing numbers of managers at all levels are expressing growing interest in the concept of transformational leadership and the principles of transformational leadership are being adopted by increasing numbers of executives with varying degree of success (Lindebaum and Cartwright, 2010).

Transformational leadership has been defined as “style of leadership in which the leader identifies the needed change, creates a vision to guide the change through inspiration, and executes the change with the commitment of the members of the group” (Business Dictionary, 2012, online). In other words, transformational leadership places great emphasize on organisational change, and accepts organisational change to be an integral part of organisational strategy.

Advantages of transformational leadership style have been mentioned by Walumbwla and Hartnell (2011) as lower employee and customer turnover costs, effective encouragement of organisational learning, generating new initiatives within the organisation, and contribution to the development of interpersonal skills of employees at all levels.

Moreover, it has also been argued that “transformational leadership may have a positive effect on the psychological aspects of the followers who experience growth, independence, and empowerment, although dependence on the leader may impose limitations on the subordinates” (Chamorro-Premuziz, 2007, p.155).

However, arguably the most substantial advantage of transformational leadership style can be specified as contributing to the long-term growth of organisation through staying innovative, and adopting a proactive approach towards the issues associated with organisational change.

At the same time, it is important to note that “a common criticism (and misconception) of transformational leadership is that it is all smoke and mirrors – a feel-good type of leadership that leads to happy followers but does not affect the group performance” (Bass and Riggio, 2006, p.56). Nevertheless, it is fare to state that the advantages of practicing transformational leadership style outweigh its disadvantages for the reasons discussed further below.

Transformational leadership involves “inspiring followers to commit to a shared vision and goals for an organisation or unit, challenging them to be innovative problem solvers, and developing followers’ leadership capacity via coaching, mentoring, and provision of both challenge and support” (Bass and Riggio, 2006, p.4).

Bass (1985) specifies transformational leadership with as an ability of the leader to transform his or her followers in three following ways: increase the awareness of subordinates about the importance of the task, make subordinates to appreciate the need for personal growth and development, and motivate subordinates to work for the benefit of the organisation, instead of concentrating solely on personal gains.

Bass’s contributions on transformational leadership have been further expanded by Tichy and Devanna (1986), who identify the following to be the main characteristics of transformational leaders: self-perception as a change agent, courageousness, believing in people, driven by values, lifelong learning, ability to deal with complexity, visionaries.

 

Components of Transformational Leadership

Major components of transformational leadership, also known as four “I”s have been specified by Bass and Riggio (2006) as idealised influence, inspirational motivation, intellectual stimulation, and individualised consideration.

Idealised influence component of transformational leadership has two aspects: the behaviour of leaders and the qualities attributed to the leader by followers and others (Abetti, 2006). Specific pattern of behaviour of transformational leaders elevate them as role models within the perception of their followers, and therefore leaders get trusted, admired and respected.

CEO of Virgin Group Richard Branson can be mentioned to illustrate the case of idealised influence in a real business world, as Richard Branson “exemplifies an idealised worker leader who holds high expectations of performance and ethical behaviour for his associates” (Burke and Cooper, 2006, p.38).

The practice of idealised influence has served as one of the most effective tools to get things done for a long period of time, and major tendencies in the global marketplace such as increasing forces of globalisation, rapid technological advancements etc. have done nothing to diminish the relevance of idealised influence in the modern marketplace.

Justification of this viewpoint may relate to late Apple’s CEO Steve Jobs, who was able to achieve remarkable success for Apple in a global scale partially thanks to effective use of idealised influence not only on Apple employees, but in some instances towards other organisational stakeholders of Apple in general, including customers.

Inspirational motivation as an important component of transformational leadership involves the type of behaviour that is able to inspire and motivate individuals that surround the leader. Moreover, transformational leaders are capable of enhancing the team spirit by commanding enthusiasm and optimism in a natural way.

Then name of Howard Schultz, founder and chairman of Starbucks Coffee is often mentioned in the literature when discussing the topic of inspirational motivation. Namely, mastering inspirational motivation to a great extent by Howard Schultz has contributed to Starbucks Coffee to achieve a growth rate of 25-30 percent for many consequent years that made Starbucks Coffee a well-known global brand (Nelson, 2011).

The high level of importance of inspirational motivation fully applies to the leadership and management practices in the modern workplace. This is because, although rapid technological advancements and increasing role of internet in the last several decades have revolutionised various business processes, nevertheless, human resources remain to be one of the main sources of competitive advantage, and accordingly, inspirational motivation is valuable in terms of increasing the performance of human resources.

Intellectual stimulation is employed by transformational leaders to encourage creativity and innovation among followers in dealing with various issues. This is often achieved through encouraging challenging status quo not criticising followers when they make mistakes.

The case of Anne Mulcahy, the first female CEO of Xerox is an appropriate example to illustrate the use of intellectual stimulation by transformational leaders. As Sosik and Jung (2012) inform, by encouraging creativity and innovation along management levels at Xerox, Anne Mulcahy has been able to achieve full-year profitability by the end of 2002, despite having cash problems and huge debts only two years ago.

The value of intellectual stimulation in the modern workplace is paramount. Today, companies are pressed to adopt a creative and innovative approach in order to identify and utilise additional sources of competitive advantage in the marketplace and intellectual stimulation efficiently facilitated by effective transformational leaders helps to achieve this objective.

Individualised consideration is another important transformational leadership component and it involves focusing on development needs of followers in an individual manner. Individualised consideration has been described as “the process of thinking about followers as unique people and responding to their individual needs” (Mumford, 2009, p.183). Northouse (2009) links the practice of individualised consideration to new learning opportunities along with a supportive climate.

Ethics, values, emotions, standards and long-term goals have been specified as important elements of transformational leadership by Daft and Lane (2007). Moreover the role of leader’s charisma is immense in this type of leadership as charisma is necessary for the leader to unite the workforce to rally behind the change proposal.

The relevance and importance of individualised consideration in the modern workplace is greater than ever before due to the vast cross-cultural differences among employees in many organisations today. In other words, increasing forces of globalisation have created a situation where team members in organisations are the representatives of various cultural backgrounds.

Accordingly, nowadays organisational managers at all levels are required to take into account characteristics of employees’ cultural background and practice individualised consideration when dealing with them in general, and when motivating them in particular.

According to Garcia-Morales et al. (2008) another distinctive trait of transformational leadership is that it is not merely a model that instructs leaders what to do; rather, transformational leadership is associated with a range of generalisations that relate to the way of thinking, ideals, creativity and concern for subordinates.

 

Advantages and Disadvantages of Transformational Leadership

The advantages of application of transformational leadership style has been linked to overcoming resistance to change, and this increases the value of transformational leadership in current businesses environment taking into account the constant changes that need to be implemented in relation to various organisational processes nowadays.

Moreover, the advantages of transformational leadership include the existence of intuitive appeal towards it (Khanin, 2007), adoption of a broader perspective on leadership in general, strong emphasis on the need of followers, as well as values, morale, and ethics (Northhouse, 2009),  and the availability of many case studies in the real business world that prove the effectiveness of transformational leadership.

At the same time, a set of disadvantages are attributed to transformational leadership that include difficulties associated with the definition of parameters, difficulties of measurement, existence of the potential for the abuse by leaders, and this type of leadership is only effective in organisations that require change.

 

 

Transformational Leadership and Change

Organisational leaders express interest to the concept of transformational leadership partially because this type of leadership effectively addresses one of the main organisational challenges in the modern marketplace – the necessity to achieve and sustain organisational flexibility in order to meet the ever dynamic market tendencies and increasing customer expectations.

Forces of organisational change can be divided into two categories: external and internal. External forces of change affecting businesses include economic, technological, political, socio-cultural and operating or task environments. Internal forces for change, on the other hand include organisational objectives, machinery and equipment management, work standards and human resource practices, inter and intra personal relationships and management inefficiencies (Pathak, 2011, p.18).

Both, internal and external forces of organisational change need to be analysed in comprehensive manner by organisational leaders in order to make appropriate decisions related to the improvement of specific organisational processes, as well as, introducing innovations in relation to organisational processes. As Lussier and Achua (2010) confirm, the accomplishment of this task proves to be easier within organisations where transformational leadership style is exercised, because this style encourages the contribution of ideas and suggestion from employees belonging to various levels within an organisation.

 

Lewin’s Change Theory and Its Importance in Practical Levels

A successful practice of transformational leadership style requires knowledge and implementation of a set of major principles and knowledge associated with change within organisations. Kurt Lewin perceives change to be a three-step process: unfreezing, moving and refreezing. This approach has been further developed by Schein (1999), who refers to the model as ‘cognitive redefinition’.

The first stage of the change theory involves unfreezing, i.e. increasing the awareness of various organisational stakeholders in general, and employees in particular about the reasons and potential benefits of change. Agness (2010) convincingly argues that the importance of this stage is often underestimated by organisational leaders and this practice compromises the overall success of a change initiative.

The second stage in Lewin’s change theory relates to moving, i.e. implementing the planned changes. According to Hughes (2006) the level of success of this specific stage of the change process can be maximised through providing practical assistance to employees in terms of adapting and coping with the change. Successful transformational leaders understand the importance of this point and therefore employ multiple communication channels in terms of supplying employees with all necessary information about the aspects of change that relate to their daily functions.

The last stage is known as ‘refreezing’ and it implies ensuring the permanency of implemented changes. In other words, the last stage of Lewin’s change theory is about making new employee behaviour habitual, and maintaining the continuity of changes. However, Ramanathan (2008) argues that the ‘refreezing’ stage of Lewin’s change theory does not fully relate to modern organisations. This is because the highly dynamic nature of modern marketplace has shortened the lifecycle of products, services and business processes, thus most changes and innovations need to be further improved before they are fully ‘refreezed’.

The importance of Lewin’s change theory for senior-level management in practical levels can be explained through pointing to practices in some organisations where change initiatives are implemented without necessary preparations (unfreezing), and no adequate measures are put in place in order ensure the continuity of the change (refreezing) that consequently compromise the overall effectiveness of a change initiative.

 

Burke-Litwin Change Model and Transformational Leadership

Burke-Litwin change model represents another theoretical framework that “is used both explicitly and implicitly to articulate why and how leadership needs to change in order to deliver organisational strategy and create an organisational culture that enables change rather than hinders it” (Gold et al, 2010, p.59).

To put it simply, Burke-Litwin change model is concerned with highlighting various drivers of change and ranking them according to their importance. Moreover, the model specifies environmental factors as the most important change drivers and highlights their potential impact on organisational culture, leadership practices within organisation, the choice of organisational strategy etc.

A comprehensive understanding of Burke-Litwin change model enables corporate leaders to analyse the factors necessitating changes in a greater scope, and therefore, to adopt a proactive approach in terms of introducing changes to various organisational processes.

 

The Benefits of Kotter’s Eight Steps Model for Organisational Leaders

As it has been mentioned above, transformational leadership is primarily concerned with the achievement of organisational objectives through motivating and empowering employees, as well as, introducing necessary changes in various organisational processes. Kotter’s eight steps model, proposed by Harvard Business School professor John Kotter is based on the study of over one hundred companies that were implementing changes with varying degree of success.

The first four steps correspond to Kurt Lewin’s ‘unfreezing’ process described above and the following steps are associated with introducing new practices. Kotter’s final step relate to firmly embedding the changes within the organisational culture.

Specifically, Kotter proposes establishing a sense of urgency as the first step for implementing changes. This step includes pointing to inefficiencies associated with current organisational processes that need to be changed, as well as, communicating the potential benefits of proposed changes to various organisational stakeholders.

The second step is creating a guiding coalition for the change. Senior and Fleming (2006) stress the role of strong and effective leadership during the implementation of this step. The coalition has to consist of change agents within various organisational departments that need to promote the change and serve as role model in terms of implementation of change in practice.

The third step proposed by Kotter involves developing a vision and strategy. Organisational vision can be explained as “a picture of how a company should look like in the future, formulating a core ideology and a purpose of existence of the company guiding the basic direction for the desired company development” (Sabrautzki, 2010, p.2). Effective transformational leaders ensure that organisational vision does not contradict with personal values of employees and they are able to inspire the majority of employees.

Communicating the change vision to organisational stakeholders in general and internal stakeholders in particular represents Kotter’s fourth step. Specifically, multiple communication channels have to be employed in order to communicate change vision in an effective and efficient manner. Moreover, organisational leaders have to discuss the vision frequently with employees and be role models in implementing changes in practice.

Kotter proposes empowering a broad base of people to take action as the fifth step of the change process. In other words, this step involves removing various obstacles that might be associated with the implementation of change. For instance, opinion leaders among the workforce that are resisting change for various reasons might be identified and dealt with in an effective manner.

The sixth step involves generating short-term wins. Kotter argues that any short-term wins achieved as a result of change have to be promoted within the organisation in order to motivate the staff and achieve greater implementation of change plan in practice.

The seventh step consists of consolidating gains and producing even more change. In other words, organisational leaders are urged not to declare their victory too early and thus compromising the overall effectiveness of change initiative. Instead, short-term wins should be building upon so that potential contribution of change can be fully utilised.

Kotter’s last, eighth step relates to institutionalising new practices. New organisational practices imposed by the change initiative need to be integrated within the corporate culture so that their continuity can be ensured. Diller (2010) identifies corporate culture as one of the most important factors that determine what gets done within an organisation, and accordingly the integration of new organisational processes within the corporate culture will maximise the chances of its continuity.

The adherence to Kotter’s eight step process in terms of implementing changes offers substantial benefits for organisational leaders in practical levels. Specifically, Kotter highlights one of the critical aspects of change initiative that is widely underestimated or even neglected by corporate leaders, and this aspect is preparing the workforce for the change before the change is actually implemented. Moreover, Kotter’s eight step process highlights the widespread issue of under-communication of the change vision to organisational stakeholders, especially employees.

 

Conclusion

Nowadays organisations are forced to adopt constant changes as the cornerstone of their strategies in order to meet the demands of highly dynamic external environment and to effectively satisfy increasing customer satisfactions. Such a situation is causing greater interest among senior level management of wide range of organisations in the concept of transformational leadership.

Exercising transformational leadership style, among a set of other substantial benefits enables corporate leaders to implement necessary organisational changes, and this motivates senior level management interest in the concept of transformational leadership. At the same time, organisational leaders need to be equipped with relevant theoretical frameworks and models that offer practical help in dealing with organisational changes.

Specific theoretical frameworks and models discussed within the scope of this essay included Kurt Lewin’s change process, Burke-Litwin change model, and Kotter’s eight steps change tool.

The change model proposed by Burke-Litwin deals with highlighting various drivers of change and ranking them according to their importance. The model offers organisational leaders substantial benefits in terms of adopting a proactive approach in introducing necessary changes related to various organisational processes. In other words, by analysing a range of specific factors affecting the organisation in direct and indirect ways, organisational leaders would be able to make necessary changes head of competitors, therefore acquiring first mover advantage in the marketplace.

Consisting of three, ‘unfreezing’, ‘moving’ and ‘refreezing’ stages, Kurt Lewin’s change process represents a practical framework according to which organisational changes can be successfully implemented.

Kotter’s eight steps model, on the other hand, can be considered as an effective expansion of Kurt Lewin’s change process, and accordingly the model represents more comprehensive toolkit to be used when implementing substantial organisational changes.

 

References

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