According to reports, “90% of Indian startups fail within the first 5 years, and 77% of failures happen due to a lack of innovation.” (source)
Transformational leadership is an important quality all startup leaders need for promoting innovation. What exactly is it? It’s a leadership style that creates a positive and motivating work environment. Why? To make everyone in the organisation feel trusted, motivated, and respected.
Such leaders don’t just tell employees what to do; rather, they lead by example, showing how things have to be done. This style helps teams bring new ideas, take initiative, and stay confident when facing challenges.
Read this blog to learn why transformational leadership is important for startups. Also see real-life examples of how it promotes innovation.
Importance of Transformational Leadership in Startup Growth
1. Transformational Leaders are Empathic, Adaptable, & Excellent Communicators
Transformational leaders know exactly what motivates each team member. It’s their empathic quality that keeps employees motivated, engaged, and always committed. They are highly adaptable. Yes, they can adjust easily to new situations, try innovative solutions, and guide their team through change.
They are great communicators and good listeners at the same time. They ensure everyone in the company understands the company’s goals and also listens to the team’s suggestions. In this way, leaders create an innovative work culture for employees to contribute their best ideas for better startup growth.
2. Transformational Leaders Attract the Best Talent & Ensure They Stay Committed to the Team
Did you know that transactional leadership focuses mostly on money and rewards? In this approach, every employee finds a job as just a way to earn. They also leave when a better opportunity comes along the way.
Transformational leadership is just the opposite of transactional leadership. Yes, under this approach, leaders create meaning to work through inspiration. Their approach teaches employees that work isn’t just about money. As a result, leaders can easily attract skilled and passionate candidates to the company.
How do leaders encourage loyalty and inspire teams to work towards long-term company success? They do this by making employees feel a part of a bigger mission.
3. Transformational Leaders Encourage New Ideas & Promote Innovation
Transformational leadership supports continuous improvement for both the leader and their team. This mindset is what makes a startup innovative. How? Such leaders encourage creativity and new ideas, the most valuable things a leader can do for startup success.
They have a growth-orientated and progressive mindset too. This allows them to adapt to changes and research the latest technologies and innovative approaches.
How does this approach help the team in a startup? The team will work with the aim to achieve the best solutions. They also ensure better growth by staying ahead in the fast-changing competitive market.
4. Transformational Leaders are Guided by Clear Morals & Values.
Do you know what guides a transformational leader? It’s mainly ethics, honesty, integrity, and morale. These qualities make leaders take only fair and practical decisions, thinking beyond profits.
The leaders with such traits also helps startups earn trust easily How? By prioritising people, the environment, and social causes such as health and sustainability.
Startups run by such leaders will also experience the following benefits in the future:
- Increased loyalty
- Better brand image
- Positive & Healthier work culture
- Advanced growth
- Advanced innovation
The 5 Systems Every Scalable Business Has — And Most New Founders Ignore
Real-Life Examples: How Transformational Leadership Promotes Innovation
1. Jeff Bezos (Amazon)
Do you know how Jeff Bezos became a transformational leader? It started when he brought a fresh idea to his e-commerce business. Coming from a finance background, he lacked knowledge of running traditional online stores. He was a total outsider. This view really helped him to think differently. It resulted in innovation and the creation of new systems, changing the way people shop online.
2. Reed Hastings (Netflix)
Reed Hastings brought heavy innovation to the television industry. Yes, he comes from a software background and was unfamiliar with traditional TV processes. His fresh perspective led to the shift from DVDs to streaming online, changing the way people watch entertainment.
3. Steve Jobs & Tim Cook (Apple)
Apple is an excellent example of ‘Dual Transformation’ in action. Steve Jobs didn’t just introduce next-generation products. He also built a full digital system that encourages innovation both in hardware and software.
Tim Cook continued Jobs’ vision by constantly focusing on the following factors:
- Innovation
- Improving software
- boosting brand loyalty
Isn’t it the perfect example of how transformational leadership supports long-term innovation?
4. Emanuel Faber (Danone)
Faber started his career as an architect at Danone and later became its CEO. He promoted innovation in the company’s products, focusing on sustainable health and nutrition. As a leader, he changed the way businesses are run. His innovation clearly shows how a clear vision leads to meaningful change.
6 Inspirational TEDx Talks That Will Change Your Mind For The Better
Conclusion
Startups can become more creative and achieve better growth easily with transformational leadership. Leaders who care about their team and give inspiration help bring out the best performance for the company.
Read the real examples of successful entrepreneurs explained in this blog. They clearly show how this leadership style encourages new ideas and business success.
Running a startup and aiming for long-term success? Follow the transformational leadership style and make a long-lasting positive impact.
EntrepreneursLeague is an initiative to support startups and leading entrepreneurs with more visibility, resources, and community for growth and networking.
