Transformational leadership, advantages and challenges
In times of heightened economic instability, leaders are often challenged to navigate an uncertain and volatile environment. In this context, transformational leadership style becomes crucial for the success of an organization. This article explores how transformational leadership is best suited to such times, highlighting the associated advantages and challenges.
What is different about transformational leadership?
Transformational leadership is a management philosophy that encourages and inspires employees to innovate and develop new ways of growth, thereby improving the path to a company’s future success. Through this method, executive leaders give trusted employees the independence to make decisions and support new approaches to problem solving.
Transformational leaders are passionate about their work and the company’s mission, while helping all employees succeed. Another key trait is their ability to identify business processes that are no longer working and focus on streamlining or changing them as appropriate.
Although transformational leaders are often admired, they do not seek praise or adulation because their focus is on doing what is best for their organization. Risk-taking is calculated – based on gathering information from team members, instincts and the experience of the leader. Decisions are made with the organization’s values, vision and goals in mind.
What are the advantages of transformational leadership?
Flexibility and adaptability
Transformational leadership is distinguished by its ability to address changes and quickly adapt to new economic conditions. Transformational leaders are agile and open to innovation, giving the organization the ability to quickly adapt to environmental changes.
Keeping employees motivated
In times of economic uncertainty, employees may feel a lack of security and encouragement. Transformational leaders inspire and motivate the team, emphasizing the long-term vision of the organization and involving employees in the decision-making process.
Innovation and strategic thinking
By encouraging innovation and strategic thinking, transformational leaders help the organization identify opportunities in the midst of crises. They promote positive change and guide their team towards creative and sustainable solutions.
Cooperation and open communication
In difficult times, open and transparent communication is essential. Transformational leaders cultivate an environment where team members feel comfortable expressing their thoughts and offering solutions. This encourages collaboration and building a cohesive team.
What are the challenges of transformational leadership?
Resistance to change
One of the main obstacles to transformational leadership in times of instability is resistance to change on the part of some team members. Employees may perceive changes as too fast or too radical, which can affect adherence to new strategies.
Sustainability pressure
Transformational leadership can put pressure on the team to constantly strive to innovate and achieve ambitious goals. Maintaining a balance between high aspirations and the realities of available resources can become a challenge.
The need for effective communication
Effective communication is essential in a volatile environment, and transformational leaders may find it difficult to maintain a consistent and coherent flow of information to the team. Poor communication can lead to confusion and worry among employees.
Avoiding burnout
Employees who are actively involved in the transformation process may feel additional pressures, which increases the risk of burnout. Transformational leaders must monitor the team’s well-being and provide support to avoid resource depletion.
In conclusion
Despite the associated challenges, transformational leadership remains an effective choice in times of economic instability. The ability to adapt, motivate and inspire is critical to successfully navigating rapid economic change.
However, leaders must be aware of resistance to change, prioritize effective communication, and carefully manage pressure on sustainability to ensure an optimal balance between innovation and stability. By carefully addressing these challenges, transformational leadership can become the engine of success in the difficult times of an uncertain economy.
Alina Făniță este CEO și Partener al PKF Finconta. A lucrat cu companii multinaționale sau firme antreprenoriale din domenii diverse de activitate, pentru a le oferi servicii de audit financiar, due diligence, restructurări de grupuri, audit intern și alte servicii conexe activității de control intern. Este membră a celor mai prestigioase asociații profesionale din domeniu: ACCA (Association of Chartered Certified Accountants), CECCAR (Corpul Experților Contabili și Contabililior Autorizați din România), CAFR (Camera Auditorilor Financiari) și IIA (Institute of Internal Auditors). A absolvit EMBA Asebuss la Kennesaw State University, a fost trainer pentru cursuri IFRS și este invitată ca expert la numeroase conferințe de business. alina.fanita@pkffinconta.ro
