“Transformational leaders don’t start by denying the world around them. Instead, they describe a future they’d like to create instead.” - Seth Godin
In a recent LinkedIn poll that I conducted, I asked the question, “How important do you think company culture is to the bottom line of your business?” 49% said it was “The most important” while the other 51% said it’s either important, kind of important, or not important at all. I thought it ironic that a recent blog, ‘20 crucial company culture statistics for 2021’, stated that only 49% of employees are happy at their job, 69% of employees would work harder if they received more recognition and that a culture that attracts high-caliber employees leads to a 33% revenue increase.
For years, I have been helping companies get to the next level, but not through what one might characterize as the normal channels. Most business owners/companies would associate “getting to the next level” with increasing sales, increasing pricing, and/or cutting costs to achieve a better net profit and therefore, hopefully achieve the goal of getting to the next level. Don’t get me wrong, those are important things and will need to happen at some point. But what if we took a transformational leadership approach with a focus on impacting your company culture instead of a purely financial approach, it might make even greater impact. Firstly, you might be asking what is transformational leadership? It’s only been around for 43 years, and not very many people have heard of it until recently. Let me share a bit of history on the subject so we are all on the same page.
What is Transformational Leadership and How Can it Impact Business?
In 1978, James MacGregor Burns, an American historian and political scientist first introduced the concept of transforming leadership in his descriptive research on political leaders. According to Burns, transforming leadership is a process in which "leaders and followers help each other to advance to a higher level of morale and motivation". Burns related to the difficulty in differentiation between management and leadership and claimed that the differences are in characteristics and behaviors. He established two concepts: "transforming leadership" and "transactional leadership". According to Burns, the transforming approach creates a significant change in the life of people and organizations. It redesigns perceptions and values and changes the expectations and aspirations of employees. Transactional leaders usually do not strive for cultural change in the organization but they work in the existing culture while transformational leaders can try to change organizational culture.
In 1985, Bernard M. Bass, an American scholar in the field of leadership studies, extended the work of Burns by explaining the psychological mechanisms that underlie transforming and transactional leadership; Bass also used the term "transformational" instead of "transforming." Bass added to the initial concepts of Burns to help explain how transformational leadership could be measured, as well as how it impacts follower motivation and performance. The extent to which a leader is transformational is measured first, in terms of his influence on the followers. The followers of such a leader feel trust, admiration, loyalty, and respect for the leader and because of the qualities of the transformational leader are willing to work harder than originally expected. These outcomes occur because the transformational leader offers followers something more than just working for self-gain; they provide followers with an inspiring mission and vision and give them an identity. The leader transforms and motivates followers through his or her idealized influence (also known as charisma), intellectual stimulation, and individual consideration. In addition, this leader encourages followers to come up with new and unique ways to challenge the status quo and to alter the environment to support being successful.
If only more businesses knew about transformational leadership and its effects on business culture, what a different world we would be living in. If you know me, the glass is always half full and It’s never too late for change, as has been witnessed within our society over the last 5 years. When it comes to business culture, the majority of the business world is still a top-down managing (“Founders Syndrome'') style. As business owners and leaders, you need to ask the question, when only 49% of employees are happy at their job when 79% of people leave their job because they feel unappreciated and 94% of entrepreneurs and 88% of job seekers say that healthy work culture is vital for success, isn’t it time for a change?
Easy Steps to Implement Transformational Business
So what does it take to implement transformational leadership to improve your business culture? I need to be honest, it requires considerably more effort by the leader, especially in the beginning. Once things begin to fall into place that should level out, but you will not regret the results, especially when things really take off. Let’s take a quick look at the four areas of concentration.
Individual Relationship: It is vital that you create a relationship with each person within the company. Be their mentor/coach and sincerely listen to their concerns and needs. Show respect and encourage each person to contribute to the team as a whole. The result will be an environment where people will be inspired to grow and be motivated to be the best they can be in their job and in life.
Growth Coach: Be a leader that challenges assumptions, isn’t afraid to take risks, and solicits ideas from their people. This approach will encourage creativity in your people, which in the long run will nurture them to think independently. Also, leverage unexpected situations as opportunities to learn and find better ways to execute tasks.
Inspirational and Motivating: Provide a vision that is both appealing and inspirational to your people. This will motivate them to achieve high standards, feel optimistic about the company’s goals and provide a strong sense of purpose for their part in the plan to meet those goals. It is important to make the vision understandable, precise, powerful and engaging. Your people will then be willing to invest more effort in their tasks, will be more encouraged and optimistic about the future and in themselves.
Walking the walk: Provide a high ethical behavior, inspire pride, in turn, gain respect and trust. You can’t just talk the talk, you MUST walk the walk. Be willing to work side by side with your people. Let them know you have their back no matter the situation.
You may be reading this and saying, This is overwhelming, do you realize how much time this will take? I don’t have that kind of time. I want to encourage you to follow the 2% change rule. The 2% change rule encourages business owners to make small incremental changes that will create compound results, 2+2 could equal 6 or 8 because you implemented changes that compounded on each other. Let’s face it, most people hate change, if it’s not broken don’t fix it. By implementing change that encourages their input on the vision for the company, you’ve suddenly asked them to take more ownership. When they own the process, they will be driven to ensure the proper results.
Here are the results, retention of your people is critical to your growth. You need a solid foundation of people to support your company when it grows. It takes time and effort to get your people trained properly. Every time one or two leave, you just threw money out the door because now you have to give the new person the same or maybe more hours to get trained. Those are hours that could be used to grow your business. The second thought is that when your people feel part of the vision and the process, every one of them becomes a salesperson for the company. You never know who you will meet and where, but when someone asks what they do, they will proudly talk about the company. There is nothing better than when your people can say this is my company too! When they can say that, the sky's the limit to how much you can grow knowing that you are on a solid foundation.
Do you want to learn more about changing your business culture through Transformational Leadership? Click Here to book a 1-hour free consultation with me