Transformational Leadership: The Secret Sauce to Innovation

Some of the most influential changemakers in recent history share a common trait: they were transformational leaders.

Revered figures like Martin Luther King Jr and Nelson Mandela inspired change, mobilised support, and overcame challenges with courage to accomplish great things: King led the civil rights movement in the United States while Mandela helped end apartheid in South Africa.

This style of transformational leadership can provide a blueprint for change for organisations seeking to harness innovation. Five senior leaders from top Australian businesses share their insights about transformational leadership and how the philosophy benefits their organisations.

What is transformational leadership?

Transformational leaders are inspirational figures who unite their followers behind a common goal to achieve unexpected results.

“There is no greater leader than one that can recruit people, processes and technology to improve the state of the world,” says Andre Botes, Regional Sales Director for Government Health and Life Sciences at Salesforce.

The commitment to make positive change is “baked into Salesforce’s leadership,” says Botes. “Our 1-1-1 model, which contributes 1 per cent of our profit, 1 per cent of our time and 1 per cent of our product to charities, has built our culture around common goals and values.”

Transformational leaders walk the talk – they lead by example, he says. “This means living the company’s values and vision and showing their teams how to do so through their own actions.”

The characteristics of transformational leadership

Transformational leadership, which relies heavily on rapport and connection with others, requires a sophisticated set of ‘soft skills’ like strong communication and emotional intelligence.

A good leader is “someone who listens before talking, someone who can understand what people are going through and be there to support them as best as possible,” says Jason Fischer, VP of Engineering at cloud HR and payroll platform ELMO.

It requires engaging with team members rather than taking an authoritative top-down approach. “Forcing a top-down view on a team can be effective for a short-term goal but, ultimately, you won’t have a team that has bought into the narrative of your vision and strategy,” says Fischer. “Knowing your team on a more personal level helps you figure out how to align their personal goals with the company goals to enable them to be more engaged in their day-to-day work.”

A visionary leader is both adaptable and quick to respond to a changing landscape, he says. “Above all, a good leader is someone who can challenge their team members in a positive way and help them grow as individuals and a team.”

Salesforce’s Botes believes a transformative leader needs a coaching and mentoring mindset. “This mindset requires having a vision for the future, a plan to achieve it, and being able to bring people on the journey with them,” he says.

“For transformational leadership to have an impact on the workplace, you need to lead with trust and create a common vision. By motivating, understanding and coaching or mentoring people, a transformational leader can help employees to grow as they strive to meet that common goal.”

To build trust, it’s essential to permit team members a sense of autonomy. “It’s important that transformative leaders encourage direct reports to develop solutions from their own perspectives,” says Botes.

Inevitably, with change comes conflict. The crucial tasks of resolving differences and managing competing agendas that fall to leaders rely on building strong relationships with employees. “A leader needs to get curious about where their people are coming from, and then find some common ground between the parties to minimise the conflict and help build trust between the individuals,” says Michelle McGuffog, Financial Education and Business Engagement Leader at Moneywise Global.

How transformational leadership drives innovation

Innovation is more than a buzzword – it’s the creation of new processes, products and ideas to meet the demands of a constantly changing market.

Sampson Oliver is Tech Lead at A Cloud Guru, a learning platform for cloud technology. “It’s no secret that landscapes can change really, really quickly these days,” he says. “Startup culture talks a lot about ‘disrupting’ the industry, and you don’t have to look too far to see that in action – these are small groups of people who are really on top of their tech taking down monolithic enterprises.”

The lesson in that isn’t “be a startup”, he says. Instead, it’s that an organisation should embrace innovation to remain competitive to avoid being the disruptee. “Stay on top of your craft, and you’ll put out quality products and always keep ahead of the competition.”

A culture of continual learning is central to maintaining a competitive advantage over commercial rivals. At A Cloud Guru, “we make sure we never stop learning,” says Oliver. “As leaders, we look to foster a culture of learning among the people we lead. We encourage employees not just to share ideas and knowledge but generate new ones as well and really cultivate these knowledge feedback cycles between everyone in the business.”

Transformational leaders that create diverse teams only serve to strengthen their organisation’s competitive edge in the market. “Gender-balanced leadership – along with all types of diversity – isn’t just about doing the right thing by people and reflecting the communities in which we live and serve. It’s also good business,” says Botes. “A lack of diversity in leadership correlates with decreased innovation. There’s an increased risk of bias, groupthink and stereotypes.”

Diversity drives the creation of new ideas and contributes to better decision-making, says Johanna Seton, Chief Operating Officer at real estate platform OpenAgent. “Having a more diverse workforce gives you more inputs and broader opinions as people come at an issue from different perspectives.”

The power of a transformational leader is that they communicate these decisions effectively, she says. “They bring people along for the journey.”