What is transformational leadership?

Transformational management is about how managers together with employees identify what change is needed, create a vision to guide the change and execute the change together with committed team members. Transformational leadership differs from transactional leadership, which achieves results through reward and punishment. Transformative leaders, on the other hand, achieve results by increasing engagement, motivation and performance by, among other things, to be a role model and inspire and instill ownership in the project

To find out what the best transformational leaders and companies do differently, the researchers started by identifying the top ten. Or “Transformation 10”, as they call them.

Transformation 10

According to Scott D. Anthony and Evan I. Schwartz.

1. Amazon, Jeff Bezos
2. Netflix, Reed Hastings
3. Priceline, Jeff Boyd/Glenn Fogel
4. Apple, Steve Jobs/Tim Cook
5. Aetna, Mark Bertolini
6. Adobe, Shantanu Narayen
7. DaVita, Kent Thiry
8. Microsoft, Satya Nadella
9. Danone, Emmanuel Faber
10. ThyssenKrupp, Heinrich Hiesinger

To find the ten finalists, the researchers selected 57 companies. They were judged based on three "metrics":

1. New growth
2. Repositioning of the core business
3. Financial performance

18 finalists from here, they asked a team of expert judges to narrow down to the top ten. (See top 10 above).

What makes these 10 particularly good?

The interesting thing is not so much which companies "won", but what made them good. They had five things in common.

Characteristics transformational leaders share:

1. They are typically "Insider Outsiders". Several of the ten top managers have no experience from the industry before they join the company. Eg. Jeff Bezos and Reed Hastings. It made it easier for them to investigate/explore new avenues for growth, without being limited by past successes.
2. They follow two different strategies at the same time"Success requires repositioning the core business while actively investing in the new growth business", write Anthony and Schwartz in the Harvard Business Review. Eg. Apple, who developed iMac and iBook at the same time as they developed i.a. iPod and iTunes.
3. They use culture to drive engagement. Eg. at Microsoft, where CEO Satya Nadella has transformed Microsoft's cautious closed-about-itself culture into an investigative culture where you dare to take chances.
4. They tell stories about the future. And that is the Adm. You who must go in front. "[…] the CEO needs to become "the storyteller in chief"".
5. They make a plan before the company is disrupted. The only way to ensure that you are not disrupted is to have a plan B.
   Transformational management is indispensable today, where development is lightning fast and everyone risks being disrupted.
   How good are the leaders in your company at leading transformations?

You can read more about the study in the Harvard Business Review or at innosight.com.