Are your leaders driving employees away? How transformational leaders improve organizational performance

About 40% of employees who leave their jobs say it’s because of poor leadership. Leaders didn’t invest in them or present opportunities for career growth. This can indicate a gap in transformational leadership capabilities and lead to declining organizational performance.  

Leaders drive organizational performance

Leaders who possess transformational leadership skills provide a level of insurance against rising recruitment costs and talent wars. Today’s leaders need to hit targets and deliver results, of course. But they also need to inspire and develop others through effective leadership models that promote employee satisfaction.

Command-and-control-type leaders may have exceptional results in the short term, but there will be signs that the kingdom is crumbling. Look for organizational distress signals, such as high turnover rates, low employee engagement, poor customer service or quality scores. These are signs that the organizational culture lacks shared values and an ethical climate.

Leadership should be transformational

High-impact teams accomplish more than high-performing individuals. When leaders inspire others to do their best work, their influence is transformational. This leadership style contrasts with transactional leadership, which focuses more on rewards and punishments to drive performance.

Bernard Bass developed the idea of transformational leadership decades ago — and his theories have been proven over and again since. To be effective, Bass said, leaders need to be trusted and admired and they need to earn loyalty and respect. Leaders who create these emotions inspire employees to work harder and achieve more than they originally believed they could.

Characteristics of transformational leaders

When you’re recruiting and developing leaders, look for people who practice the “four Is” of transformational leadership. Transformational leaders should:

• Inspire others: Bass called this “idealized influence.” The net is, you want high-performance, purpose-driven role models at the helm, especially during times of organizational change. Leaders capable of gaining influence will lead change by example, with integrity and transparency.
• Motivate others: Transformational leaders should have a clear vision and strong communication skills to build rapport. They need the ability to cascade messages — and not just through top-down memos and mandates. The managerial implications of transformational leadership are demonstrated through inclusive and inviting communication, providing inspiration and motivation to their employees.
• Stimulate innovation: Transformational leaders encourage followers to engage in critical thinking, creativity and problem-solving on their teams. Rather than surrounding themselves with “yes-men and -women,” these kinds of leaders display personal behaviors that promote a degree of workplace democracy in decision-making.
• Consider individuals: Transformational leaders are empathetic managers who care about people, not just performance. They are leaders willing to invest in coaching and mentoring employees one-on-one, based on their personal strengths, weaknesses and aspirations. This builds strong trust-based relationships.

How to activate transformational leadership

Transformational leadership skills are a specific set of leadership behaviors that can be taught. This kind of organizational citizenship training can be embedded in companywide practices that encourage collaboration and dialogue. And like anything else, you can hold leaders accountable for their behaviors.

Vision-driven organizations will invest in training and exercises that build empathy and increase emotional intelligence in leaders throughout the organization. When the organization is going through change, including transformational leadership inspiration and motivational techniques in your change management plan improves alignment from the top down.

Leadership development strategies and organizational learning programming should also consider diversity to avoid the pitfalls of laissez-faire leadership styles. Diverse perspectives strengthen transformational leadership and drive greater social impact and performance with purpose.

How Wipfli LLP can help

Wipfli’s Prime Growth System is a proprietary operating system that helps companies achieve a state of prime so you can achieve elevated performance and increased efficiency and strengthen organizational health. Learn more about taking our free rapid assessment today.