The term transformational leadership was first coined by J.V. Downton in Rebel Leadership: Commitment and Charisma in a Revolutionary Process (1973).
James MacGregor Burns first introduced the concept of transformational leadership in his book Leadership (1978), during his study of political leadership, but this term is now used in organizational psychology as well. He described it not as a set of specific behaviors, but rather an ongoing process by which "leaders and followers raise one another to higher levels of morality and motivation" (Leadership, p20). Transformational leaders offer a purpose that transcends short-term goals and focuses on higher order intrinsic needs.
It’s about values, purpose and meaning...
"Essentially the leader’s task is consciousness-raising on a wide plane. The leader’s fundamental act is to induce people to be aware or conscious of what they feel -- to feel their true needs so strongly, to define their values so meaningfully, that they can be moved to purposeful action." (Leadership, pp 43-44)
Transformational Leadership has evolved from and contains elements of preceding leadership types, such as trait and behaviour theories, charismatic, situational and transactional leadership.
There are four components of transformational leadership, which are...
Charisma or idealized influence
This is the degree to which the leader behaves in admirable ways that cause followers to identify with the leader. Charismatic leaders display convictions, take stands and appeal to followers on an emotional level. This is about the leader having a clear set of values and demonstrating them in every action, providing a role model for their followers. Genuine trust must be built between leaders and followers. Trust for both leader and follower is built on a solid moral and ethical foundation.
The degree to which the leader articulates a vision that is appealing and inspiring to followers. Leaders with inspirational motivation challenge followers with high standards, communicate optimism about future goals, and provide meaning for the task at hand. Followers need to have a strong sense of purpose if they are to be motivated to act. It is also important that this visionary aspect of leadership be supported by communication skills that allow the leader to articulate his or her vision with precision and power in a compelling and persuasive way.
The degree to which the leader challenges assumptions, takes risks and solicits followers' ideas. Leaders with this trait stimulate and encourage creativity in their followers. The leader’s vision provides the framework for followers to see how they connect to the leader, the organization, each other, and the goal. Once they have this big picture view and are allowed freedom from convention they can creatively overcome any obstacles in the way of the mission.
Individualized consideration or individualized attention
The degree to which the leader attends to each follower's needs, acts as a mentor or coach to the follower and listens to the follower's concerns and needs. This also encompasses the need to respect and celebrate the individual contribution that each follower can make to the team (it is the diversity of the team that gives it its true strength). This approach not only educates the next generation of leaders, but also fulfils the individuals need for self-actualization, self-fulfilment, and self-worth. It also naturally propels followers to further achievement and growth.