How transformative leadership can improve performance and drive business reinvention

We’ve all been part of transformation initiatives that took longer than expected, were more painful than anticipated or outright failed to deliver the expected value. In our experience, one of the main reasons isn’t technology or hard skill deficiencies. It’s an inability of many leaders to quickly make hard decisions, be willing to experiment and, yes, maybe even fail — in other words, to constructively lead their organizations through these transformations. Many companies may spend lavishly on large-scale transformations, but they balk at the (comparatively small) investments needed to equip their leaders to guide massive, tech-led transformation — what we call transformative leadership.

Not every leader in your company needs to be a transformative one. Look at the business units, regions or functions that can be important to successful delivery of your strategy and prioritize those leaders to build transformative skills and acumen. In a rapidly changing business environment where 40% of CEOs believe their businesses won’t be economically viable in ten years, organizations need leaders who can adapt and innovate to stay competitive and help drive business outcomes in the critical areas. CHROs can play a key role in setting and implementing the vision for building transformative leadership, and they should consider including these core skills in their leadership development initiatives.

What is transformative leadership?

Transformative leadership is about creating a vision, inspiring others to follow that vision and empowering them to achieve it — and doing so in the context of your company’s transformation agenda. We believe that most transformative leaders share five characteristics.

• Making sense of the world. They understand today’s megatrends and societal and business dynamics to put transformation in context.
• Maintaining radical ambition. They possess a finely honed skill of knowing just how far to push organizations to strike a successful balance between extracting maximum performance and breaking them.
• Achieving promised outcomes. They’re practical, they help deliver, they understand the risks of inaction and they get personally involved in execution.
• Acting as a catalyst. They win followers and foster an environment where everyone can contribute their utmost, building trust across the entire organization.
• Powering the engines. They find (and often create) the energy to keep things moving while making hard choices, as well as taking care of themselves and their teams.

These five characteristics describe a system, and all five should be present for a transformative leader to be more effective. In fact, some of the most successful transformative leaders focus on making these part of their regular routines.

How to promote transformative leadership

Are you ready to foster a culture of transformative leaders? Get your teams obsessed with these critical areas.

• Understanding disruptive forces and how to turn them to your advantage: Concrete knowledge can help transformative leaders better recognize societal and market trends, innovative technologies and agile ways of working. It can also help them determine how to respond to industry disruption with greater resiliency and impact, including implications for talent and upskilling agendas. Key to helping drive outcomes is understanding how the change you are leading lives in the ecosystem of the company and the sector.
• Developing leadership capabilities: First, gain insight into the makeup of your leaders through data collection and behavioral interviews against a consistent framework. This can help a CEO or CHRO understand gaps in team capabilities and provide direction for skill building, both as teams and as individuals. Next, start a deliberate upskilling effort that mixes individual, self-paced learning with immersive, high-energy and high-impact in-person sessions, creating opportunities for leaders to apply their new skills. Third, create sustainability through ongoing coaching as individuals or in small groups to help keep the learning and development going. Being obsessed with outcomes can mean starting every transformation by developing the key program leaders.
• Assessing digital innovations: Understanding the latest technologies and their impacts on the business and market — from cloud migration to how generative AI can complement (but not replace) an organization’s skills — can enable leaders to more firmly grasp the change they’re helping drive, as well as pinpoint the gaps in their knowledge and that of their teams. Even if leaders ultimately decide to not pursue certain technologies, they have an obligation to assess options rather than reject them out of ignorance.
• Making time, focus and wellness your friends: Capability can seem limitless, but your bandwidth isn’t. Transformative leaders know it’s better to learn and grow from missteps than waste time and resources trying to be perfect. Learning to “get it out” instead of “get it right” can be especially challenging for those leaders who built their career on a binary of success versus failure. It’s critical that transformative leaders take care of their own wellness across all dimensions — physical, mental, spiritual — to be in peak shape. Building these habits into the normal routines of your leaders can help enable them to stay fresh, energized and ready to make agile decisions.