Transformational leadership is a theory based on leaders with a set of skills that inspire followers (typically employees) to value their contribution and therefore work harder. It seems like the perfect answer to increasingly competitive nature of business in a global community. But does it work out as well as it seems to in theory?
The characteristics of a transformational leader is a wish list with a heavy emphasis on those traits which resemble a charismatic leader:
- Expresses optimism and enthusiasm about the future
- Exhibits attributes that make others proud to associated with them
- Creates a shared vision or sense of mission
- Able to explain the importance of that vision
- Communicates a sense of ethics or values
In additional there are some traits to round out this emotionally expressive, inspirational person. Some of them are characteristics of people who are harder to get along with because they tend not to hide their egotism:
- Finds solutions to problems
- Uncovers new ways to complete tasks
The final and perhaps the most difficult characteristic for an influential person is:
- Mentors and develops followers. 
This is not using their influence to help a person move up the corporate ladder. According to the transformational leadership theory, this kind of leader will result in employees who are more engaged. In other words willing to put time, effort and innovative thinking into their daily work simply for the sake of doing it. No extra remuneration or reward is involved. The leader is supposed to be spending personal time helping to develop the employee, simply for the sake of doing, no reward on the leader’s part either.
So the end result would be employees who produces more while making the same amount of money. Does that seem lopsided to anyone else?
Well actually it does. Some leadership theorists see a risk of burn out in the emotionally intense atmosphere in which employees are inspired to increasingly perform better. Other argue that theories emphasizing the role of increased motivation and performance is benefits towards stake holders, owners and top management while the cost is born by most of the other employees.
So what are the downsides to the prospect of employing charismatic leadership within a company? Inspirational leaders are good at encouragement and painting a vision of the big picture, but not as good as plugging through the details to determine how they fit together. Once employees become disenchanted with a leader or feel their effort is being ignored, they have no loyalty to the company which does not providing extra benefits for their increased engagement. Either the company will lose talented employees or they will become content to coast by. This is much the same as the disengagement that companies are noting now.