Transformational Leadership 2.0 How to Boost Your Team's ...

WHITE PAPER

TRANSFORMATIONAL LEADERSHIP 2.0

How to Boost Your Team’s Performance

TRANSFORMATIONAL LEADERSHIP 2.0 – HOW TO BOOST YOUR TEAM’S PERFORMANCE

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Executive Summary

High-performing teams are a key driver of business performance. But what is it that makes a

team a successful one? In this white paper, the critical role of team leaders is stressed. From the

research, we know that transformational leaders are linked with more positive outcomes than

many other leadership styles. Nowadays, transformational leaders, however, must not only mo-

tivate the individual follower, but also need to effectively influence their team on a group-level.

Especially, the predominant trends in today’s workplace, such as the increase in virtual com-

munication, the high interdependence in followers’ tasks and the rise in high-performance de-

manding contexts, have made transformational leaders become more essential than ever. In line

with the research, this white paper provides recommendations on how to become a successful

transformational leader and how to foster team performance.


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Contents

Transformational leaders are still in demand but their role has changed ................................................ 4

Transformational leaders’ mystery in fostering team performance is revealed ...................................... 5

Transformational leaders become more important than ever as work conditions change ....................... 6

HR’s role in developing transformational leaders ................................................................................... 7

Summary ................................................................................................................................................. 8

References ............................................................................................................................................... 9


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Transformational leaders are still in demand but their role

has changed

A typical picture of a traditional leader is someone who guides and moti-

vates followers individually to achieve maximum performance. However,

as the use of teams in organisations has expanded over the past decades1,

the role of leaders has changed. Nowadays, leaders must not only motivate

their individual employees, but also manage their team as a group working

towards common goals2. Yet, leading teams has recently been found by

the Center for Creative Leadership as one of the top six challenges leaders

face all over the world3.

As high performing teams are essential for achieving outstanding organi-

sational performance, companies are confronted with a critical question:

What kinds of leaders are most likely to help teams achieve their goals?

Studies reveal that transformational leadership behaviours are linked to

more positive outcomes

than many other leadership

styles4. Most importantly, it

does not only predict em-

ployers’ individual task and

contextual performance but

also performance on the

team level: A recent meta-

analysis6 found that trans-

formational leadership ac-

counted for more than dou-

ble of the explained variance

in team performance than did contingent reward – one of three dimensions

of transactional leadership.

72%

28%

Explained Variance in

Team Performance

Transformational

Leadership

Contingent

Reward

Leading teams – one of

the top six challenges

worldwide

Transformational lead-

ers are geared to take

up the challenge

Contextual Performance:

Follower performance

above and beyond what is

delineated by job require-

ments alone5.

Transactional Leaders:

Set clear objectives and goals

for the followers and reward

them when the goals are

achieved7.

Transformational Leaders:

Develop, intellectually stimu-

late, and inspire subordinates

to transcend their own self-in-

terests for a higher collective

purpose or vision7.


ers rise above exchange

relationships


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Transformational leaders’ mystery in fostering team performance

is revealed

Studies have shown that transformational leaders promote team performance,

but how do they actually make the difference? Research has recently started to

unlock transformational leaders’ secrets in effectively leading teams. What has

been shown is that transformational leaders positively influence psychological

processes within their team which in turn increase their performance.

SECRET 1: Transformational leaders positively influence their followers’ gen-

eralized beliefs about the capabilities of the team, also known as team potency,

which then fosters the team’s effectiveness8. But how do transformational lead-

ers encourage their teams’ potency? This is where the second secret comes into

play.

SECRET 2: Research indicates that transformational leaders enhance their

teams’ potency by increasing the team members’ trust that they are competently

led9. Through the perception of pursuing meaningful, shared objectives through

clear processes that have been set by the leader, team members are more likely

to develop high cognition-based trust in their leader, and this enhances the team

potency.

SECRET 3: Another key factor that has been identified is team reflexivity, or

the extent to which teams reflect upon and modify their functioning10. Transfor-

mational leaders enhance this reflexivity within their team, which in turn im-

proves performance. Given the importance of reflexivity for team performance,

it is crucial to understand what factors motivate teams to become more reflexive.

Here another secret has been revealed.

SECRET 4: Transformational leaders enhance the development of a common

goal and shared vision in the team which in turn affects reflexivity11. Having a

shared, overarching goal or vision of the future fosters a shared frame of refer-

ence for team members,

which makes it easier for

teams to reflect effectively on

team objectives and the strat-

egies used to reach them.

Transformational leaders can

aid this process by regularly

promoting the goal and vision

to the team and thus, stimulat-

ing reflexivity within their

teams.


ers influence psycholog-

ical processes within

their team

Fostering team potency

Increasing trust

Enhancing team reflex-

ivity

Developing a shared vi-

sion

Team

Reflexivity

Team

Potency

Shared

Vision

Trust


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Transformational leaders become more important than ever as

work conditions change

With globalisation and its concomitant dynamics in today’s workplace it has

become more imperative than ever for companies to recognize the importance

of effective leadership behaviors. Especially, if your company faces one of

the following three trends, an investment in transformational leaders seems

worthwhile.

VIRTUAL COMMUNICATION: The advancement of new communica-

tion technologies has led to an increase in virtual project teams11. Both virtual

leaders and virtual followers reported in interview studies that virtual leaders

are challenged to establish relationships with their followers12. However, vir-

tual teams need not necessarily suffer the effects of leaner communication

media. Rather, the uncertainty and ambiguity that is

created by virtual communication opens the door for

transformational leaders to influence their followers:

Recent research not only showed that transforma-

tional leadership had a stronger effect on team per-

formance in virtual than in face-to-face teams, but

also that leaders who increased their transformational

leadership behaviour in their virtual teams, relative to

their face-to-face team, led the most successful

teams13. Hence, the need for transformational leaders appears to be even

higher in virtual communication conditions in which members work under

circumstances of challenge, confusion and uncertainty.

TASK INTERDEPENDENCE: Another

trend arises from the increasing use of team

work: Employees’ tasks become more interde-

pendent. Research shows that transformational

leaders are particularly successful in promot-

ing their team’s effectiveness when the team

members’ tasks are interdependent14. Thus, if team members must depend on

each other to perform their tasks in order to

achieve their goals, the ability as a transforma-

tional leader is highly demanded.

MAXIMUM PERFORMANCE: If a team

frequently faces situations in which maximum

performance is required such as in tasks which

are of relatively short duration so that

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1

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Global trends make in-

vestment in transforma-

tional leaders indispen-

sable

Virtual leaders who in-

crease their transforma-

tional leadership behav-

iour lead the most suc-

cessful teams

If tasks are interde-

pendent, transforma-

tional leaders are highly

demanded


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the team members can maximize effort (e.g. in short term projects) transforma-

tional leadership can make the difference: By installing a sense of optimism and

collective efficacy, directing followers’ attention to the superordinate goal and

promoting new ways of problem-solving, leaders help their followers to over-

come these periods of stress and instability15.

HR’s role in developing transformational leaders

As high performing teams are essential for achieving outstanding organisational

performance, companies should invest in transformational leaders. Here HR is

in the right place to do this. But how exactly can HR make managers more ‘trans-

formational’?

RECRUITING

Probably the most cost-effective way is to select individuals with a transforma-

tional leadership style for managerial positions as these individuals are more

likely to increase their future team’s

performance. In this instance, HR could

for example apply situational judgment

tests16 in which the job applicant would

have to identify the most appropriate

and effective transformational leader-

ship behavior in team context situa-

tions.

TRAINING AND DEVELOPMENT

As studies show that transformational leadership is trainable17 HR should de-

velop training programmes to provide leaders with different sets of behaviours

to motivate individual followers and teams as a whole. To enhance individual

performance, HR should teach leaders how they can help followers reach their

full potential, promote employees’ abilities and skills, and enhance followers’

self-efficacy and self-esteem. They can achieve this by considering their follow-

ers as individuals; understanding their individual abilities, skills, and needs; and

providing them with customized coaching and mentoring18. To drive team per-

formance, training should stress the importance for

team leaders to communicate team goals, to inspire ef-

fort to achieve these, and to develop shared values and

beliefs. Simultaneously, leaders should be trained in

communicating a compelling vision to team members

and to build followers’ commitment to the vision. Ad-

ditionally, training should emphasize the importance

for leaders to encourage cooperation and build trust among members to ensure

that they work effectively as a team18.

In times of extreme time

pressure, stress, and in-

stability transforma-

tional leaders can make

the difference

Adjust selection tools to

recruit the most effective

team leaders

Train both leading indi-

viduals and teams as a

whole


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Steps for leaders to promote team performance

PERFORMANCE APPRAISAL AND REWARDS

In order to evaluate whether these trainings are effective, HR could either

supply leaders with self-assessment tools or their followers with validated

transformational leadership questionnaires such as the

dual-level transformational leadership scale from Wang

and Howell (2010). Especially the latter can be helpful

in rewarding leaders on the basis of the assessment of

their transformational leadership behavior.

Summary

The key to creating high-performing teams is transformational leaders who

not only motivate individuals but also their team as a whole. Research has

found that transformational leaders are capable of developing important team

processes which in turn increase the team’s effectiveness. Especially, when

leaders have to use computer-mediated communication, when team members’

tasks are highly interdependent or when time pressure is high, transforma-

tional leaders are likely to achieve the best outcomes. HR can use a combina-

tion of factors to improve managers’ leadership style that extend from the

recruitment process at the very beginning, to training programs for effective

team leadership, to rewarding high performers and adequately addressing

poor performers.

Communicate High Expectations

Develop and Coach Followers’ Abilities

Stimulate Followers’ Intellect

Recognize and Acknowledge Followers’

Work

Emphasize the Group Identity

Communicate a Group Vision

Foster Team-Building

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Use validated transfor-

mational leadership

questionnaires to assess

leaders’ performance


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References

1 Piña, M. I. D., Martínez, A. M. R., & Martínez, L. G. (2008). Teams in organizations: A review on

team effectiveness. Team Performance Management, 14(1), 7-21.

doi: 10.1108/13527590810860177

2 Chen, G., Kirkman, B. L., Kanfer, R., Allen, D., & Rosen, B. (2007). A multilevel study of leadership,

empowerment, and performance in teams. Journal of Applied Psychology, 92, 331–345. doi:

0.1037/0021-9010.92.2.33

3 Gentry, W. A., Eckert, R. H., Stawiski, S. A., & Zhao, S. (2013). The challenges leaders face

around the world: More similar than different. Published by the Center for Creative Leader-

ship. Retrieved online on 28.09.2014 from http://www.ccl.org/leadership/pdf/research/Chal-

lengesLeadersFace.pdf

4 Judge, T. A., & Piccolo, R. F. (2004). Transformational and transactional leadership: A meta-analytic

test of their relative validity. Journal of Applied Psychology, 89(5), 755-768. doi:

10.1037/0021-9010.89.5.755

5 Borman, W. C., & Motowidlo, S. J. (1993). Expanding the criterion domain to include elements of

contextual performance. In N. Schmitt & W. C. Borman (Eds.), Personnel selection in organi-

zations (pp. 71-98). San Francisco, CA: Jossey-Bass.

6 Wang, G., Oh, I. S., Courtright, S. H., & Colbert, A. E. (2011). Transformational leadership and

performance across criteria and levels: A meta-analytic review of 25 years of research. Group

& Organization Management, 36(2), 223-270. doi: 10.1177/1059601111401017

7 Bass, B. M. (1985). Leadership and performance beyond expectations. New York, NY: Free Press.

8 Schaubroeck, J., Lam, S. S., & Cha, S. E. (2007). Embracing transformational leadership: Team val-

ues and the impact of leader behavior on team performance. Journal of Applied Psychology,

92(4), 1020-1030. doi: 10.1037/0021-9010.92.4.1020

9 Schaubroeck, J., Lam, S. S., & Peng, A. C. (2011). Cognition-based and affect-based trust as media-

tors of leader behavior influences on team performance. Journal of Applied Psychology, 96(4),

863-871. doi: 10.1037/a0022625

10 Schippers, M. C., Den Hartog, D. N., Koopman, P. L., & van Knippenberg, D. (2008). The role of

transformational leadership in enhancing team reflexivity. Human Relations, 61(11), 1593-

1616. doi: 10.1177/0018726708096639

11 Mukherjee, D., Lahiri, S., Mukherjee, D., & Billing, T. K. (2012). Leading virtual teams: How do

social, cognitive, and behavioral capabilities matter? Management Decision, 50(2), 273-290.

doi: 10.1108/00251741211203560

12 Hambley, L. A., O'Neill, T. A., & Kline, T. J. B. (2007). Virtual team leadership: Perspectives from

the field. International Journal of E-Collaboration, 3(1), 40−64.

doi: 10.4018/jec.2007010103

http://dx.doi.org/10.1108/13527590810860177


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13 Purvanova, R. K., & Bono, J. E. (2009). Transformational leadership in context: Face-to-face and

virtual teams. The Leadership Quarterly, 20(3), 343-357. doi: 10.1016/j.leaqua.20-09.03.004

14 Burke, C. S., Stagl, K. C., Klein, C., Goodwin, G. F., Salas, E., & Halpin, S. M. (2006). What type

of leadership behaviors are functional in teams? A meta-analysis. The Leadership Quarterly,

17(3), 288-307. doi: 10.1016/j.leaqua.2006.02.007

15 Lim, B. C., & Ployhart, R. E. (2004). Transformational leadership: Relations to the five-factor model

and team performance in typical and maximum contexts. Journal of Applied Psychology, 89(4),

610-621. doi: 10.1037/0021-9010.89.4.610

16 Weekley, J. A., & Ployhart, R. E. (2013). Situational judgment tests: Theory, measurement, and

application. Mahwah, NJ: Lawrence Erlbaum.

17 Barling, J., Weber, T., & Kelloway, E. K. (1996). Effects of transformational leadership training on

attitudinal and financial outcomes: A field experiment. Journal of Applied Psychology, 81(6),

827-832. doi: 10.1037/0021-9010.81.6.827

18 Wang, X. H. F., & Howell, J. M. (2010). Exploring the dual-level effects of transformational leader-

ship on followers. Journal of Applied Psychology, 95(6), 1134-1144. doi: 10.1037/a0020754

http://psycnet.apa.org/doi/10.1037/a0020754


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Contact

Vanessa Böcker

15 Whitaker Place

Apartment 11A

Grafton

Auckland 1010

New Zealand

E-mail: [email protected]

The University of Auckland

School of Psychology

Human Science Building

10 Symonds Street

Auckland 1142

Website: www.psych.auckland.ac.nz

mailto:[email protected]

http://www.psych.auckland.ac.nz/

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