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Transformational leadership: How to inspire innovation

Adam Berke

Transformational leadership is something all leaders can aspire to. It’s about creating a work environment built on mutual respect, trust, enthusiasm, integrity, dedication, and innovation. Transformational leaders inspire their team by living their own ideals—the “do as I say, not as I do” managerial mantra has no place within the organizations and teams they lead. 

Read on to learn about the benefits of transformational leadership, the qualities of transformational leaders with real-world examples, and how you can become a transformational leader yourself.

Introduction: Transformational leadership theory

Transactional leadership

The most common forms of leadership are transactional in nature. Perform well for my business, and you will be rewarded with a raise, a promotion, and so on. If the employee does not perform well, they’ll be punished with a demotion, or they’ll lose their employment entirely. The motivation to succeed comes from the outside: what will I tangibly gain or lose if my boss is satisfied or dissatisfied with my performance? The guiding principle of transactional leadership is fear. 

That’s not to say that all forms of transactional leadership are bad and all forms of transformational leadership are good; some people just want to do a job, get paid, and go home. They’re not looking for anything more than the transaction. 

Transformational leadership

A transformational leader is just the opposite. They inspire their employees to succeed because the employees aspire to be like their leader—the leader is a role model. The motivation to succeed goes beyond simple acquisition and monetary gain: who will I be if I succeed? An employee guided by a transformational leader is motivated to perform well because it’s the right thing to do. The guiding principle of transformational leadership is love. 

The benefits of transformational leadership

Transformational leaders attract and retain the best talent

Transactional leadership attracts people whose chief concern is money, and if that’s all their leader makes the work about, the talent they attract will never stop looking for a better deal. If another business has a more lucrative offer, say goodbye to said employee. The job is a means to an end, and that end is accruing as much wealth as possible, which is likely how it is for their employer, too.

Transformational leadership not only attracts the best talent, it retains it. Talent recognizes talent, and if a leader makes the job about something deeper than simply making money, that talent will stick around. 

Transformational leaders foster creativity and innovation

Transformational leadership is all about being better and doing better, whatever that may mean for each individual. This mindset fosters innovation and creativity in the leader, their team, and the businesses they touch. Businesses with transformational leaders adapt and innovate along with changing times, cultural shifts, and updated technologies. Transformational leaders truly care about improvement, which means new ideas are always sought out and thoughtfully considered.

Transformational leaders are guided by morals and values

Transformational leadership is guided by integrity, ethics, and morals; these kinds of leaders put “doing the right thing” above most other motivations. Making decisions based on what is right is a solid long-term strategy for both entrepreneurs and businesses. A strong code of morals and ethics draws people closer to brands and the people that run them. It prioritizes the wellbeing of customers, employees, and important causes, such as health, sustainability, and social justice.

Qualities of transformational leaders

Transformational leaders are empathetic

Transformational leaders lead with empathy—they wouldn’t exist without it. It’s this quality that enables them to relate to, motivate, and communicate with each unique member of their team. They understand what drives and inspires each team member. A transformational leader is able to leverage this understanding to articulate how their own vision for the future aligns with their team’s dreams. 

Transformational leaders are authentic

Transformational leaders practice what they preach. They don’t ask their employees to behave or perform in a way they wouldn’t behave or perform themselves. These types of leaders set an example for everyone around them to aspire to. They are true role models, living and breathing their own ideals. 

Transformational leaders are inspirational

Transformational leaders inspire those around them. They bring out the best of their team, motivating them to act on their ideas, dreams, and passions. This inspiration stems from the leader’s steadfast example and encouragement. Transformational leaders chase their own dreams and are always aspiring to do more, be more, and give more. They also put time and effort into helping others become the best they can be, offering support, guidance, and words of wisdom.

Transformational leaders are adaptable

Transformational leaders have a strong AQ (Adaptability Quotient), which is the ability to adapt to change. They’re able to roll with the punches and pivot when necessary. This ability often makes them early adopters of new ideas and innovations since they are unafraid of the unknown. They are constantly looking for new ways to improve themselves and those around them, which means new ideas and better ways of doing things are always welcomed.

Transformational leadership examples

We’ve outlined some prominent examples of transformational leadership from the real world. As this article was originally posted during Black History Month, we took the opportunity to highlight and honor Black leaders who are making a difference in the world.

Stacey Abrams, politician

Many Americans heard the name Stacey Abrams for the first time in 2018 when she ran to be governor of Georgia in the state’s closest election since 1966. Although earning more votes than any other Democrat in the state’s history, she lost the election under highly controversial circumstances—namely, the widespread voter suppression carried out by Georgia’s secretary of state, Brian Kemp, who also happened to be her opponent in the election. 

But that election wasn’t Abrams’ first foray into leadership. She’d already founded multiple organizations, been a Georgia state representative, serial entrepreneur, nonprofit CEO, and become a New York Times bestselling author—even a successful romance novelist. Her list of accomplishments are indeed staggering, but it’s her transformational ideas about leadership that truly make her a remarkable leader. 

In an article published by Forbes, Abrams outlined her vision of leadership: 

“The most important leaders are those who are trying to get us somewhere; who are not simply trying to preserve the status quo or aggrandize or aggregate power for themselves. It’s those who are attempting to share that power to create pathways for more people to be a part of the power structure and the power dynamic.” - Stacey Abrams

Tristan Walker, entrepreneur 

Tristan Walker founded Bevel in 2013, a health and beauty company that specializes in hair and skincare products for Black men. He founded the company because, as Walker says, “As a Black man, I have a different hair type. I have a different skin type. And those needs should be respected... I deserve not only products that work for me, but also a design experience that doesn't make me feel like a second class citizen.” 

Walker wanted to create a product that served the needs of his Black community, and he wanted to grow his business where Black people actually lived—and that’s not Silicon Valley. So in 2018, he moved his company to Atlanta, Georgia. Bevel also recently partnered with meditation app Headspace to offer free mental health services to Black people.

Before I'm a CEO, before my colleagues are colleagues of mine, we are human beings who have acknowledged persistent trauma… both emotional and physical that we've been disproportionately impacted by the past 400 years.” - Tristan Walker

It’s not just about making as much money as possible for Tristan Walker. He lives his ideals in a way that inspires loyalty and respect from his customers and his employees, making him a standout transformational leader.

Walker is also co-founder of nonprofit CODE2040, which pairs Black and Latinx engineering students with summer internships in Silicon Valley. 

Kimberly Bryant, technologist

Kimberly Bryant, an electrical engineer, founded Black Girls CODE in 2011, which teaches basic programming concepts to Black girls who are woefully underrepresented in tech. The ultimate goal of Black Girls CODE “is to provide African-American youth with the skills to occupy some of the 1.4 million computing job openings expected to be available in the U.S. by 2020, and to train 1 million girls by 2040.”

In 2018, Black Girls CODE was offered a $125,000 donation from Uber. Rather than take the money and run, Bryant considered the allegations of sexual harassment and lack of diversity that currently plagued Uber. She turned down the donation, calling it “PR-driven.” Bryant was also quick to point out that Uber offered Girls Who Code “nearly ten times that amount.” 

Bryant’s leadership and integrity guided her organization to put its ideals ahead of short-term monetary gain.

Becoming a transformational leader

  • Strive to be the best version of yourself in order to inspire those under your leadership to do the same.
  • Lead with a moral compass. Make decisions based on your own code of ethics and values.
  • Provide constructive feedback often and with consistency.
  • Follow best practices for providing feedback. Strive to help someone improve as opposed to highlighting their flaws.
  • Never scold. Instead, see mistakes and failures as learning opportunities.
  • Be open and honest with your team about yourself and the state of your business. Share both your successes and failures.
  • Lead with empathy and always consider the other person’s perspective. What disadvantages might another person have that you are unfamiliar with?
  • Invest in continued learning for yourself and your team to ensure you’re always ready and willing to expand your horizons.
  • Be a leader of innovation by actively considering new ideas and build a culture of innovation in your workplace that strives to grow and evolve with the changing times.
  • Provide adaptability training to ensure your business, and everyone on your team is ready for whatever the world has in store.

Recommended reading on transformational leadership

Continue your journey to becoming a transformational leader by learning from some of the best. The following books share inspiring stories and helpful advice to improve your leadership skills.

Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration

by Ed Catmull

Creativity Inc. provides an inside look at how Pixar continues to produce innovative and inspiring films, time and time again. It’s packed with transformational leadership wisdom, such as:

“It’s not the manager’s job to prevent risks. It’s the manager’s job to make it safe for others to take them.”

Read it for the leadership advice while delighting in the inside stories behind some of your favorite animated films.

Collective Genius: The Art and Practice of Leading Innovation

by Hill, Brandeau, Truelove & Lineback

Collective Genius proves that the only true way to ensure sustained innovation is by leading with it. The book uses the success stories of leaders from companies like Volkswagen, Google, and Pfizer to illustrate the importance of creating a culture of innovation. Learn how to create a work environment where innovation is sustained again and again.

Lead from the Outside: How to Build Your Future and Make Real Change

by Stacey Abrams

National leader Stacey Abrams shares how to build success by harnessing the strengths of being an outsider. She highlights lessons learned from her career in politics, business, and the nonprofit world. It’s a handbook for outsiders that illustrates challenges that hinder women, people of color, the LGBTQ community, the working class, and millennials—all of whom are ready to spark change.

No Rules Rules: Netflix and the Culture of Reinvention

by Reed Hastings & Erin Meyer

Dig into the unorthodox culture behind Netflix, one of the world's most innovative, imaginative, and successful companies, with an inside look from its co-founder. Netflix revolutionized the media industry using innovative business practices and management styles that defied tradition.

Learn how the company built a culture focused on freedom and responsibility through interviews with current and past Netflix employees, as well as the successes and failures Hastings experienced during his own career.

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

by Eric Ries

In an age when companies need to innovate more than ever, The Lean Startup teaches entrepreneurs how to continuously test their vision. Based on best practices from lean manufacturing, “validated learning” enables businesses to shift directions with agility. Learn the scientific approach to creating and managing successful startups, as well as how to adapt and adjust before it’s too late.

Become a transformational leader with Charma

Beloved by managers, HR, executives, and ICs alike, Charma is the best practice toolkit for managers to organize, motivate, and engage their teams. Find tools and AI to help you manage agendas for both one-on-one meetings and team meetings, action items, team collaboration, 360 reviews, continuous feedback & recognition, and goals — all in one place.

Check out our resources for articles, guides, and success stories dedicated to running efficient and effective teams. If you have any questions about anything you read or how to utilize Charma, reach out to our team at any time.

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