A GLOBAL revolution has been taking place over the past few decades. Rapid technological change, heightened levels of competition, volatility in oil pricing and changing demographic structures have created a turbulent, unstable and highly competitive environment in which significant organisational change is imperative.

Retrenchment, downsizing and new organisational arrangements have taken their toll on the old social contract of long-term employment in return for employee loyalty.

New approaches to leadership are needed to resolve the apparently contradictory challenge of finding new ways of implementing and managing change, while simultaneously building employee morale and motivation.

Two basic categories of leadership have evolved: the old-style transactional leadership has quietly been challenged by the newer concept of transformational leadership. The distinction was first made in the early 1970s but the idea gained little currency until award-winning writer James McGregor Burns’ work on political leaders was published in 1978.

Mr Burns distinguished between ordinary (transactional) leaders who exchanged tangible rewards for the work and loyalty of followers, and extraordinary (transformational) leaders who engaged their followers by focusing on higher-order intrinsic needs, and raised consciousness about the significance of specific outcomes and new ways in which those outcomes might be achieved.

Transformational leaders seek to alter existing structures and influence people to buy into a new vision and new possibilities. They use their authority and power to inspire and motivate people to trust and follow their example.

Ultimately, transformational leadership is a process that motivates people by appealing to higher ideals, defining and articulating a vision of the future and forming a base of credibility. Conversely, transactional leadership is based on bureaucracy and organisational standards.

One could argue that it is ultimately a distinction between traditional management and the new ideas of managerial leadership. The differences between transformational and transactional leadership styles can be defined by denoting the transformational style as a leader of innovation and the transactional style as a manager of planning and policy.

Much has been written about the qualities of transformational leaders but for simplicity, the classification given by authors B.M Bass and B.J Avolio has been used here. They described four key qualities:


The ability of the leader to establish confidence and appreciation among followers forms the basis for accepting radical change. These followers perform their jobs well and demonstrate that to lead people, you must first make them ready to follow you.

The leaders with idealised influence are honoured and appreciated, and their followers admire and identify with them. They do “the right things”, demonstrating high moral and ethical behaviour.


This is the ability of transformational leaders to inspire and motivate followers to appropriate behaviour. They show enthusiasm and optimism, stimulate teamwork, point out positive results and advantages, give praise and show appreciation.


Transformational leaders encourage followers to be innovative and creative, to question existing assumptions and change the accepted way of thinking about problems. These leaders do not seek to impose their own ideas at any cost.


This phrase refers to the ability of the transformational leader to consider the needs of his followers. Including them in the transformational process of the organisation shows willingness to diagnose their wishes, needs, values and abilities in the right way.

A transformational leader must know what motivates his followers as individuals. Some want certainty, some want excitement and change, some prefer money and others, more free time.

A transformational leader:

* makes a convincing case for change;

* inspires a shared vision, seeks broad input and encourages everyone to think of a new and better future;

* leads change by instilling a sense of urgency. He encourages collaboration and boosts the self-confidence of his followers; and

* embeds change by monitoring progress, changing appraisal and reward systems and hiring staff with a commitment to empowerment and collaboration.