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Executive Education: How transformational leadership takes companies to new heights in any economy

  • January 3, 2011

Although increased innovation and cultural adaptation may top the agendas of business executives in 2011, few leaders possess the transformational skills to invigorate new ideas or the discipline to implement them.

Traditionally, leaders have relied on charisma to incite change. In fact, James MacGregor Burns had politicians in mind when he developed the transformational leadership theory in the late 1970s. But charm isn’t enough to achieve success in today’s business environment. Modern business leaders need a blend of transformational and transactional talents to create a vision, sell their ideas to stakeholders, engender trust and execute the plan, while keeping everyone engaged in the process.

“Transformational leaders must combine the audacity of imagination with systematic discipline to drive quality throughout the execution process,” says Dr. Mohammad H. Qayoumi, president of California State University, East Bay. “Many leaders have great vision, but unfortunately they don’t have the systematic discipline to transform a great idea on paper into a working model or the mental fortitude to execute the working model.”

Smart Business spoke with Qayoumi about the advantages of transformational leadership in today’s business environment.

How would you define transformational leadership?

Transformational leadership describes the ability to incite change in people and organizations, rather than simply managing the status quo. The theory is executed by an ethical, energetic leader who stirs others’ imaginations and invites them into the process. One of the key differentiators that separates a transformational leader from a transactional leader is support for risk-taking. Transformational leaders understand that promoting new ideas is bound to produce a few failures. Rather than being deterred by an occasional set-back, bold leaders view them as learning opportunities and subscribe to the notion that failure is nobler than not trying at all. Furthermore, they understand that risk tolerance engenders a culture that will support the transformation process.

Why is transformational leadership appropriate for today’s business environment?

The recent economic calamity accelerated the pace of change, and in taking a look back, we can see that linear thinking and rigid processes stifled creativity and contributed to our problems. Transformational leaders inspire innovation and intellectual stimulation by taking a fresh look at old problems and breaking down both the real and perceived constraints to creative thinking. They also anticipate issues and initiate change proactively, instead of sitting on the sidelines while others test the waters. Passive leaders, who merely react to unforeseen business events, will soon find their competitors dominating the market. In essence, transformational leadership creates a new mental model which is better suited to today’s rapidly changing environment.

Do transformational leaders need unique qualities or skills?

Above all, transformational leaders need equilibrium and a systematic approach to the change process, because they must continue managing the business in its current state while creating a pathway to the future. They must align and navigate two systems concurrently, while keeping their finger on the pulse of the organization and modulating the change process. If the pace of change is too rapid, you can lose people before the mission is complete, yet if you move too slowly, resistance can mount. It’s really about honoring the past and respecting history, while simultaneously being a force for change. Unfortunately, our current educational system typically doesn’t teach these types of intangible skills and qualities. But we can learn from mentors and by observing leaders who possess this type of intellectual dexterity, if we’re willing to be humble and venture outside of our own companies and industries to find the trailblazers. Certainly when we think of famous transformational leaders we recall Jack Welch, Walt Disney and Martin Luther King Jr., just to name a few.

How can leaders get others on board with their vision?

You’ll encounter less drag and resistance during the change process if you solicit the imagination of others as you develop your plan and offer them the opportunity to visualize themselves in the future organization. Oftentimes, leaders push harder and harder when they encounter resistance. But you don’t need to exert force to move forward if you include others in the planning process and create mindshare for your ideas. Most plans begin as a diamond in the rough, but through collaboration and evidence-based decision making, leaders begin to clarify and polish their message, craft a shared vision and build support for their strategy.

Why is collaboration critical to the transformation process?

Collaboration is a key element of the transformation process because it fosters innovation, dismantles silos, reduces bureaucratic roadblocks and mobilizes the idea of doing more work with fewer people and resources. Initiating a collaborative culture also provides the added benefit of developing and empowering people, which is another tenet of the transformational leadership theory. The idea is that charismatic leaders inspire their followers to act beyond the framework of the existing organization and take it to new heights. As long as you have an incandescent passion for your ideas and approach implementation with systematic discipline, there’s no reason why you can’t be a highly effective transformational leader.

Dr. Mohammad H. Qayoumi is the president of California State University, East Bay. Reach him at (510) 885-3877 or

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