Innovation and the Art of Transformational Leadership

By Mostafa Sayyadi

Executives willing to succeed in the knowledge-based economy will need to adopt transformational leadership at the highest organizational levels in order to develop innovation. This article adopts a holistic approach to address the following research question: how can transformational leaders meet the need for innovative products and services?

Transformational leaders solve problems and people across industries members frequently solve technical problems and share their ideas and knowledge together – especially when it comes to charitable and disaster-type events. This frequent contact and keenness to share existing practice and knowledge in solving daily technical problems can in turn enhance a shared understanding among organizations that make up certain industries and it does not even matter if they are in the same industry.

Frequent contact and keenness to share existing practice and knowledge in solving daily technical problems can in turn enhance a shared understanding among organizations.

To provide an array of leadership theories and models, the next section examines some theories and models that are directed at developing a better understanding of the concept and evolution of leadership thought. There have been several shifts in the study of leadership, and subsequently newer approaches to leadership emerged leading up to the emergence of transformational leadership as a key enabler for organizational innovation.

A Look at Leadership Theories and Models from a Critical Perspective

Behavioral Theory

Behavioral theory could have been the impetus for a change in the focus of leadership studies, and encouraged researchers instead to embark on empirical studies to identify leader behaviors and accompanying categorization schemes.1&2 Ralph Stogdill, Alvin Coons and Rensis Likert investigated the behaviors of leaders at both Ohio and Michigan Universities.3&4 These authors classified leadership styles resulting in two aspects of task and people. These studies aimed to portray the best leadership style when delegating task to people, and also illustrate the behaviors of effective versus ineffective leaders. Task behavior tended to be elaborate and tenuous, leaving leaders exhausted at the end of the day while people behavior, sometimes referred to as relationship behavior, led to leaders spending and inordinate time with followers also leading to exhaustion and, in some cases, frustration do the hand-holding and continuous feedback necessary to complete the work in question.


Ohio State Studies

To investigate effective behaviors in leaders, Ralph Stogdill and Alvin Coons conducted an empirical study in which they employed a Leader Behavior Description Questionnaire (LBDQ) for subordinates to evaluate the behaviors of their leaders, using 150 items that reflect important functions of a leader.3 More importantly, Ralph Stogdill and Alvin Coons rated these behaviors using a range between two aspects – initiating structure and consideration. Leaders can score high or low on each of these aspects.3

Initiating structure refers to the behavior that organizes and defines relationships or roles, and establishes well-defined patterns of organization, channels of communication, and ways of getting the job done, consideration, on the other hand, has been highlighted as the behavior indicative of friendship, mutual trust, respect, and warmth.5

In Ralph Stogdill and Alvin Coons’ view, there can be four types of leadership styles.3 These are classified as low initiating structure and low consideration, low initiating structure and high consideration, high initiating structure and low consideration, and high initiating structure and high consideration. Conceptually, these four leadership styles resulted from a combination of initiating structure and consideration which ware on an X/Y chart with initiating structure on the left and consideration along the bottom. Based on this chart, transformation of leadership approaches from a set of universal traits to some context-dependent styles left the behavioral model lacking the necessary application to be useful in large corporations. However, the two dimensions were considered important when leaders determined how to utilize human resources, train people, and guide them.


Michigan University Studies

Rensis Likert conducted another empirical study at the University of Michigan, which aimed to define the relationship between leadership behavior, group performance and processes within a group.4 This research adopted a mixed method approach, and used both survey questionnaire and qualitative interviews to classify effective versus ineffective leaders. This classification highlights several interesting differences in the behaviors of these leaders, and reveals three styles of leadership which emerge differently with respect to effective or ineffective leaders. Accordingly, Rensis Likert suggested the three leadership styles as: 4

task-oriented, which focuses on planning the work, organizing employees and technically supporting them to achieve their business goals. These are similar functions to initiating structure as identified by the Ohio State Studies;

relationship-oriented behavior that reflects supportive behaviors for subordinates, and is consequently equivalent to consideration as described by the Ohio State studies, and;

participative behavior which is reflected by paying attention to both task-oriented and relationship-oriented behaviors, and demonstrating some behavioral aspects such as being supportive, collaborative, cooperative, and highly oriented towards accomplishing high performance, solving problems, and facilitating conflict resolution.

It is number three above that began the new leadership research that large corporations needed to better apply leadership theory and models. Without a framework, the Ohio State studies and Michigan State studies did not provide closure for leaders attempting to run corporations in a hypercompetitive global environment. For example, Peter Northouse posits that a leader who practices participative leadership is one who invites others to share in the ways and means of getting things done.6 They work to establish a climate that is open to new and diverse opinions. This type of leader consults with others, obtains their ideas and opinions, and integrates their suggestions into the decisions regarding how the group or organization will proceed. In Rensis Likerts view, most effective leaders have a dual concern for task-orientation and relationship-orientation, and undertake a participative leadership style to enhance a climate of openness within organizations.4 Leaders in large organizations began to apply this knowledge and managerial implications where beginning to surface as beneficial and worthwhile.

In the corridors of universities, scholars challenged these two studies, because of the failure to account for situational variables in order to recommend the best leadership style, and also the methodological limitations of these studies.7&8 Gary Yukl explains these limitations in that the selection of behavioral items for a questionnaire is usually influenced by preconceptions about effective leadership or the desire to develop a measure of key behaviors in a leadership theory.9 He also expressed that the sample of respondents is seldom systematic, and the accuracy of most behavior questionnaires is seriously reduced by respondent biases and attributions. He criticized this construct of the theory for applying the fundamental assumption of factor analysis, which searches for high association among variables in terms of a similar category. Furthermore, he argues that this basic assumption could be effective for leaders when they only need to take one alternative way among a category of various behaviors – sort of satisficing to end the search for the optimal choice of action necessary for high performance and productivity. While the behavioral perspective adopts a new approach to overcome the problems of trait theory, the empirical studies themselves suffer from several limitations leaving leaders in large companies salivating for a more congruent and applicable theory or model.


Situational Leadership Model 

Situational Leadership is a model. Unlike theories, it has its good attributes but has not empirically been tested. Therefore, scholars look at it as a passing fancy, a myth, or a schematic diagram that has not been tried and true. Unfortunately for scholars, this is not true. Millions of managers were trained in situational leadership and it has advanced into law-enforcement, parenting, and customer service. Basically, situational leadership was developed to highlight the importance of situational factors and how they impact the effectiveness of leadership. Albert Murphy argues that leadership is naturally situational, and that leadership study calls for a situational approach; this is a fundamentally sociological viewpoint, not a psychological one.10

According to this model, leadership does not reside in a person. It is a function of the whole situation or a particular situation. Henry Sims, Samer Faraj and Seokhwa Yun also explain the fundamental idea of situational leadership, and highly recommend that one type of leadership will be effective in one situation while but may be ineffective in other situations.11 Consequently, this model, unlike behavioral and trait theories, highlights that there is no best single leadership style for all the situations, and conversely encourages leaders to consider the impact that situational variables can have on the effectiveness of a behavior.

Peter Northouse is one scholar that critiqued this theory and provides its strengths and weaknesses.6 In his book titled “Leadership: Theory and Practice,” he identified the limitations of situational theory. He asserts that situational theory suffers from several weaknesses. First, this theory has been challenged based on the lack of empirical studies to test its hypotheses. Secondly, there exists a high degree of ambiguity that is highly reflected in a failure to theoretically justify the relationships between the variables presented in the models. The third criticism relates to the fact that even these models themselves lack a theoretical rationale by which these relationships can be justified. Moreover, the studies replicated by other researchers could not have actually supported the fundamental prescriptions of this theory. In addition, this theory has been criticized because of the failure to account for the critical role of demographics in its prescriptions. Furthermore, situational leadership failed to sufficiently differentiate between group and one-to-one leadership within organizations, and consequently could not have adequately addressed these concepts. Finally, the methods of data gathering generally suffer from bias, particularly in those questionnaires that have been constructed to force respondents to describe leadership style in terms of the specific parameters of situational leadership…rather than in terms of other leadership behaviors.6 Therefore, this finding supports Claude Graeff’s argument that the situational approach cannot even represent a theory or a practical model to study leadership.12 Barring this sporadic but relevant criticism, situational leadership provides prescriptive and anecdotal applications that leaders and supervisors can grasp. It is straightforward and uses a variety of guidelines for both leaders and followers alike.


Transformational Leadership: The Focal Point of Innovation

Executives around the globe realize that they play a critical role to achieve the best climate and for creating innovation and growing the organization. Engaging followers and getting them to participate in leadership activities is an important part of organizational innovation.13 Success is dependent upon how executives formulated their organization’s mission and vision. The key is for executives to inculcate a culture of trust and transparency of knowledge sharing within organizations so that information can be found and used instantaneously.

Two prominent scholars on organizational innovation are Ikujiro Nonaka and Dave Ulrich who suggest that executives build a climate of trust for individuals to exchange ideas.14&15 Like tacit knowledge, individual knowledge can become a valuable resource by developing an organizational climate of trust for members to exchange their ideas and insights. A climate of trust is a big part of organizational innovation and can inspire organizational members to share their individual knowledge to generate new ideas within companies. This is where the transformational leader can attempt to achieve the best corporate climate and inspire followers to achieve business goals–stemming from a shared or distributed form of leadership across pivotal areas on the organization.

Organizations today require a form of leadership in which “the freedom to explore new ideas and set its own agenda” in an empowering way which frees followers from the shackles of organizational missives.

It is apparent that transformational leadership theory is associated with trust-based relationships for centuries that go back to Sun Tzu. An example of this comes from the work of Jon Pemberton, Sharon Mavin and Brenda Stalker, who posit that communities that work in tangent with each other as a group of like-minded people whose interconnectedness brings richer and more comprehensive knowledge and experience.16 Organizations today require a form of leadership in which “the freedom to explore new ideas and set its own agenda” in an empowering way which frees followers from the shackles of organizational missives.16 The outcome is success which narrows the gap between success and failure and this can be achieved by the commitment of its members and facilitated by an executive acting as a transformational leader for the purposes of organizing meetings and communication. Thus, transformational leadership theory is a necessary precursor to create new knowledge in organizations. And transformational leaders enhance competitive advantage by creating new ideas and storing knowledge that can be tapped into at the right place and time.


In Conclusion

By facilitating and fostering a culture that enables followers, transformational leaders are effective trust builders who develop innovation and provide a flow of knowledge and ideas. Clearly, transformational leaders unfold results in organizations, influencing employee individual interests to align with institutional interests, and through inspiring employees to develop trust-based relationships and create new ideas and innovations for effective business outcomes. The key is to see the practices, consider implementing them for followers and anticipate a large change in the leadership gaps that exist in the organization.

About the Author

Mostafa Sayyadi, CAHRI, AFAIM, CPMgr, works with senior business leaders to effectively develop innovation in companies, and helps companies – from start-ups to the Fortune 100 – succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to and Consulting Magazine and his work has been featured in these top-flight business publications.

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The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.