The transformational leadership style shares some characteristics with the charismatic style. Those shared characteristics include:
Transformational leaders add a dimension in that they are both vision and follower-oriented. Not only does the transformational leader want to achieve the vision, they want followers to become better, happier people on the journey toward the vision.
The concept of transformational leadership style was developed by James MacGregor Burns in the late 1970s and expanded on by Bernard Bass in the mid-80s. Placed in that historic context, transformational leadership was a way to move into a theory of leadership that included the human relationship in the equation. Transformational leadership recognized that transactional leadership alone was not the entire picture of leadership.
The extent to which a leader is transformational, is first in terms of influence on the followers. The followers of such a leader feel trust, admiration, loyalty and respect for the leader. The transformational leader offers followers something more than just working for self-gain; they provide followers with an inspiring mission and vision and give them and identity. The leader transforms and motivates followers through his or her idealized influence, intellectual stimulation and individual consideration.
Transactional leadership is exactly what it says. It is a business give and take. At the simplest level, the leader gives a paycheck and the worker gives hours of labor. This type of leadership is best suited to the old industrial model of work--8 hours of work for 8 hours of pay.
There is no assumption by either the leader or the worker that they have or want any relationship beyond the transaction. While this type of leadership arrangement worked for some, relationships, good and bad, formed between worker and leader. Those relationship over time were recognized and became a more prominent focus for leadership.
Transformational leaders are most effective when the vision is clear. In uncertain or chaotic times, when the vision is murky, the transformational leader may need to bide time until a vision emerges from the chaos.
Transformational leaders are expected by followers to model the vision and to be passionate and work hard to achieve it.
Transformational leaders who appreciate and enlist contextual leaders to help put systems and processes in place will have greater success in building a lasting organization.