Goals are a key mechanism that explains how transformational leadership works. Followers of transformational leaders are more likely to pursue ambitious goals, be familiar with and agree on the strategic goals of the organization, and believe that the goals they are pursuing are personally important. VeriSign’s CEO, Stratton Selavos says it comes down to charting a course having the ability to articulate for your employees where you are headed and how you’re going to get there. Even more important is choosing people to work with who have that same level of passion, commitment, fear and competitiveness to drive towards those same goals.
Sclavos’s remark about goals brings up vision. Just as research has shown that vision is important in explaining how charismatic leadership works, research has also shown that vision explains part of the effect of transformational leadership. Indeed, one study fond that vision was even more important than a charismatic (effusive, dynamic, lively) communication style in explaining the success of entrepreneurial firms. Finally, transformational leadership also engenders commitment on the part of followers and instills in them a great sense of trust in the leader.
The evidence supporting the superiority of transformational leadership over transactional leadership is impressive. Transformational leadership has been supported in different countries (Korea, Russia, Israel, India, Kenya, Norway, Taiwan), in disparate occupations (school principals, marine commanders, ministers, presidents of MBA associations, military cadets, union stewards, military cadets union shop stewards, school teachers sales reps), and at various job levels. For example, a number of studies with US Canadian, and German military officers found at every level that transformational leaders were evaluated as more effective than their transactional counterparts. And a review of 87 studies testing transformational leadership found that it was related to the motivation and satisfaction of followers and to the higher performance and perceived effectiveness of leaders.
Transformational leadership theory is not perfect. There are concerns about whether contingent reward leadership is strictly a characteristic of transactional leaders only. And contrary to the full range of leadership model, contingent reward leadership is sometimes more effective than transformational leadership.
In summary, the overall evidence indicates that transformational leadership is more strongly correlated than transactional leadership with lower turnover rate, higher productivity and higher employee satisfaction. Like charisma it appears that transformational leadership can be learned. One study of Canadian bank managers found that those managers who underwent transformational leadership training had bank branches that performed significantly better than branches with managers who did not undergo training. Other studies show similar results.
Transformational Leadership versus Charismatic Leadership: There is some debate about whether transformational leadership and charismatic leadership are the same. The researcher most responsible for introducing charismatic leadership to OB, Robert House, considers them synonymous, calling the differences modest and minor. However the individual who first researched transformational leadership considers charisma to be part of transformational leadership but argues that transformational leadership is broader than charisma, suggesting that charisma is, by itself insufficient to account for the transformational process. Another researcher commented. The purely charismatic [leader] may want followers to adopt the charismatic world view a go further; the transformational leader will attempt to instill in followers the ability to question not only established views but eventually those established by the leader. Although many researchers believe that transformational leadership is broader than charismatic leadership studies show that in reality a leader who scores high on transformational leadership is also likely to score high on charisma. Therefore, in practice, measures of charisma and transformational leadership may be roughly equivalent.