By Nguyen Thi Thuong

DEFINITION OF TRANSFORMATIONAL AND CHARISMATIC LEADERSHIP

With the fast-paced tech industry being a significant economic force in the last two decades, the concepts of transformational and charismatic leadership have gained in importance again. Especially in Tech startups where Leadership styles can quickly decide on the fate of a business, transformational Leadership seems well suited. Transformational leadership refers to a style where the leader positively inspires change and uses his employees to drive that change. A transformational leader is generally passionate, enthusiastic and energetic and focuses on helping individual members to succeed (Hannum et al., 2007).

 With charismatic leadership on the other hand, the leader uses his/her persuasiveness, communication skills and charm to impact others. He/she connects with people creating a deep intimacy with members of the organization. Charismatic leaders are often most effective when an organization is experiencing a crisis. (Paulsen et al., 2009). Transformational and charismatic leadership styles share many traits; however, the transformational leader relies on his/her employees to achieve the desired change.

For example, Steve Jobs of Apple was not only a charismatic leader but a transformational leader as well. His charismatic style helped transform a failing company into the Apple Company we know today. With his charisma he was able to communicate and even charm those who did not like him into liking and working for him (Luenendonk, 2020)

TRANSFORMATIONAL AND CHARISMATIC LEADERS AND THEIR EMPLOYEES

Transformational and charismatic leadership, through fostering of employee confidence, can enable teams to produce remarkable, creative outcomes and sustain a company’s competitive edge (Karim 2016). By building trust, loyalty and employee motivation, transformational leaders are able to drive their companies forward. When employees feel like they are being valued and they have something to offer towards the growth of the company, they are motivated to bring forth their ideas and best efforts, further creating loyalty between leaders and the employees. Through transformational leadership, members feel motivated to achieve their organizations objectives as they are mentored and given room for growth and improvement (Bonsu, & Twum-Danso, 2018).

 For example, Google leadership focuses on ensuring that employees know the vision of the company. Beyond this, employees are encouraged to come up with innovative ideas to achieve the vision. This has created trust and loyalty between employees and their managers (Bayram, 2016).

Another example of transformational leadership is Jack Welch, who was General Electric’s youngest CEO for 2 decades: Through his tenure he focused on developing and empowering employees. Welch was relentless in ensuring that his workforce was passionate about their work and lead by energizing employees to be creative and innovative and have a sense of pride and value in their work (Shamir & Howell, 1999). Welch’s proactive leadership style removed the fear of change within GE: He ensured employees that change was good, necessary and beneficial to opening up new opportunities for GE and thus created a culture that was no longer afraid to try out new business ideas, adjust its own organizational structure to achieve goals, fostered innovation and motivated employees to achieve more to ensure GE’s customers were satisfied with the products. ( Ródenas Cobo, 2017)

One cannot talk about transformational leaders without mentioning Elon Musk. Musk has proven that by surrounding himself with employees who agree on his vision and want to change the world massive innovation and business success is possible. Musk’s Tesla and SpaceX companies are proof that when leaders empower their employees “the impossible” can be achieved. Inspiration, challenging the status quo and embracing failure as part of the process are all transformational leadership elements. (Maida, 2020)

REFLECTION

An effective leadership style can make the difference between failure and success in today’s fast-paced, competitive business environment. Success is rarely the result of an individual, one needs a team to accomplish big goals and transformational leadership is an effective way to get that team to work to its maximum potential.

Additionally, I believe that charismatic qualities help a leader to convince others, I feel strongly that transformational leadership qualities require a level of charisma and that empowering and motivating one’s workforce to achieve new heights on their own is harder without it. That said, I also believe charisma is not given at birth and can be trained. With charisma comes the importance of values which are an integral part of company culture. When Jack Welch led his employees to be open to new ideas, have a focus on customer satisfaction and to think globally, he created the foundations of a culture that made GE more resilient to economic challenges (Ródenas Cobo, 2017).

One may not be able to change its own character but understanding the importance of values and impact on leadership styles is important to understand.

References

Bahram, K., 2016. Larry Page and His Leadership Style. 1st ed. Ankara: Yildrim Beyazit University Business School, pp.2-5.

Bonsu, S. and Twum-Danso, E., 2018. Leadership style in the global economy: A focus on cross-cultural and transformational leadership. Journal of Marketing and Management, 9(2), pp.37-52.

Hannum, K.M., Martineau, J.W. and Reinelt, C., 2007. The Handbook of Leadership Development Evaluation. Center for Creative Leadership. One Leadership Place, PO Box 26300, Greensboro, NC 27438.

Segall, K. (2016, June 6). These traits made Steve Jobs a smart leader, according to his right-hand man. [online] Available at: < https://www.businessinsider.com/why-steve-jobs-was-such-a-smart-leader-2016-6> (n.d.). [Accessed 7 April 2021].

Idris, F. and Mohd Ali, K.A., 2008. The impacts of leadership style and best practices on company performances: Empirical evidence from business firms in Malaysia. Total Quality Management, 19(1-2), pp.165-173.

Karim, A.J., 2016. The indispensable styles, characteristics and skills for charismatic leadership in times of crisis. International Journal of advanced engineering, management and science, 2(5), p.239445.

Luenendonk, M., 2020. Charismatic Leadership Guide: Definition, Qualities, Pros & Cons, Examples. [online] Cleverism. Available at: <https://www.cleverism.com/charismatic-leadership-guide/> [Accessed 14 April 2021].

Paulsen, N., Maldonado, D., Callan, V.J. and Ayoko, O., 2009. Charismatic leadership change and innovation in an R&D organization. Journal of Organizational Change Management.

Shamir, B. and Howell, J.M., 1999. Organizational and contextual influences on the emergence and effectiveness of charismatic leadership. The Leadership Quarterly, 10(2), pp.257-283.

Wang, E., Chou, H.W. and Jiang, J., 2005. The impacts of charismatic leadership style on team cohesiveness and overall performance during ERP implementation. International Journal of Project Management, 23(3), pp.173-180.

Maida, Stephanie: 2020 Elon Musk’s Leadership Style: 10 Strategies That He Uses Daily. [online] Available at: <https://www.one37pm.com/grind/entrepreneurs/elon-musk-leadership-style/> [Accessed 17 April 2021].

Ródenas Cobo, Sergio: 2017 Jack Welch: the master of transformational leadership theory. [online] Available at: < https://www.linkedin.com/pulse/jack-welch-master-transformational-leadership-theory-ródenas-cobo/> [Accessed 17 April 2021].