Time for Transformational Leadership to Effectively Lead Organizational Knowledge

The key to transformational leadership is based upon satisfying basic needs and meeting higher desires though inspiring followers to provide newer solutions and create a better workplace.

Transformational leadership can help companies achieve greatness in knowledge management. In the absence of effective transformational leadership, companies lose the required direction to achieve a high degree of competitiveness, and cannot implement successful change in order to adapt to today’s uncertain business environment—they simply resort to managing the status quo. Transformational leadership is easy to understand and implement, and to inspire followers to be one voice and vocal throughout the organization. Transformational leadership is more realistic than some of the other leadership forms and a style that should be embraced at the senior level of organizations to enhance knowledge management effectiveness through implementing organizational change and developing a shared vision for future expansion into a global business environment. 

The Top Practices that Separate Transformational Leaders

Where did this transformational leadership style originate? J.M. Burns initially developed the style of transformational leadership. While this style has a catchy name and is easy to digest, there is much more to it than that. I designed an approach for leaders in companies to use this leadership style so that the managerial implication is sound, justified, and operational to eliminate the gaps and serve the followers and various leaders in the organization that exist in the spaces between the lines of the organization. In my approach, the basis of transformational leadership is one leaders in corporations can apply naturally and comfortably without having to digest and analyze academic data and findings. Leaders do not know need to know how to use leadership style; they just need to lead. Leading comes from knowing some tools, a cocktail of models and concepts, and using them to get things done. Managers may be doing things right, but leaders are doing the right things, and that is what this article is all about.

The key to transformational leadership is based upon satisfying basic needs and meeting higher desires though inspiring followers to provide newer solutions and create a better workplace. Transformational leaders employ charismatic behaviors and motivate subordinates to provide better outcomes, more profitability, and satisfying careers. Transformational leaders focus on the critical human assets such as commitment and, thus, help followers to effectively implement organizational changes both efficiently and effectively. This leadership style sheds light on the strategic role of follower attitudes and values to accomplish a higher degree of effectiveness, and highlights the importance of employees in implementing changes at the organizational level. Today’s global business environments involve a high level of uncertainty, so organizations increasingly will need more transformational leaders to be more innovative and creative. Transformational leadership style unfolds results in organizations, influencing employee individual interests to align with institutional interests, and through inspiring followers to create new ideas and innovations for effective business outcomes. One of the earlier scholars, B.M. Bass, uncovered four dimensions of transformational leadership, including:

  • Idealized influence
  • Individualized consideration
  • Intellectual stimulation
  • Inspirational motivation

Executives can use idealized influence when aiming to develop a shared vision and improve relationships with followers; executives can use individualized consideration when they would like to concentrate on identifying employees’ individual needs and empowering followers in order to build a learning climate and mobilize follower support toward the goals and objectives at the senior organizational level. Executives also can use intellectual stimulation to propel knowledge sharing in the company to generate more innovative ideas and solutions for new and demanding issues that arise constantly in our hypercompetitive economic environment. Furthermore, executives can use inspirational motivation to focus on inspiring people and not just treat them as human assets. This sets a higher level of desired expectations for them. These four dimensions of transformational leadership represent how an effective leader working in today’s knowledge-based economy can develop and manage intellectual capital in corporations. Therefore, when looking at leadership from a new perspective, leaders should understand the evolution of leadership theories and models but place more emphasis on applying what works best for them in their current work environment. 

How Knowledge Management Works 

Executives today are more focused on strategic management decision making due to the hypercompetitive global environment and public- and private-sector evaluation and opinion. Public organizations are attempting to function as private profit-wise, while public companies have Wall Street analysts continuously evaluating their every strategic move. Lee and Kim’s model for managing knowledge takes a strategic process-oriented approach that is relevant to executive leadership. Knowledge management scholar I. Nonaka suggests that executives build a climate of openness for individuals to exchange ideas. Knowledge is accumulated by creating a new approach to gathering, evaluating, and disseminating information throughout the organization. Executives inspire people to create new ideas and develop effective mechanisms to acquire knowledge from various sources such as suppliers, customers, business partners, and competitors. This is similar to a value-chain approach. Executives need to first support this approach for the model to work because they play a strategic role in expanding knowledge accumulation through applying incentives as mechanisms to develop a more innovative climate and managing effective tools to acquire knowledge from external sources.  

Executives then integrate knowledge internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes. Accumulated knowledge is synthesized to produce higher-quality outcomes. Thus, knowledge integration focuses on monitoring and controlling knowledge management practices, evaluating the effectiveness of current knowledge, defining and recognizing core knowledge areas, coordinating expert opinions, sharing organizational knowledge, and scanning for new knowledge to keep the quality of their product or services continuously improving. 

Executives can promote knowledge integration by creating expert groups or steering committees to enhance knowledge quality and evaluate knowledge assets. Followers’ diversity of skills and interpersonal relations based on trust and reciprocity can improve the performance of group cohesiveness. Therefore, in the process of knowledge integration, knowledge enters organizational processes and provides valuable contributions to products and services. Executives as leaders steering the organizational strategy facilitate this process by undertaking initiatives that improve knowledge transfer, thus enhancing the performance of employees and the implementation of effective changes to maintain the quality of products and services. The burden of success when effective implementation of knowledge integration is concerned depends on the capabilities of the organization’s leaders.   

Executives also must curtail the knowledge within organizations. This knowledge needs to be reconfigured to meet environmental changes and new challenges, and, at the same time, should not be leaked to the competition in any shape or form unless agreed upon by senior executives. 

When executives agree to share knowledge with other organizations, studies have shown that such knowledge is often difficult to share externally. One reason is that other organizations have too much pride to accept knowledge or are apprehensive to expose themselves to the competition. Therefore, executives may lack the required capabilities to interact with other organizations , or distrust sharing their knowledge. In addition, just the notion of creating an expert group or steering committee may be shortsighted because such groups may not have sufficient diversity to comprehend knowledge acquired from external sources .

On the other hand, executives are aware networking with business partners is a key activity for organizations to enhance knowledge exchange. Networking is a critical concern for leaders in this process of developing alliances with partners in external environments. Executives and their expert groups and/or steering committees are the ones who can make final decisions about developing alliances with business partners.  

Combining Transformational Leadership and Knowledge Management    

 The role transformational leaders play in developing new ideas is essential in strategic development and formulation. In doing so, executives act as social architects who instill trust in organizations through clarifying and communicating both their own roles and those of their followers. This way, executives can enhance knowledge acquisition and transfer. Similarly, scholars J.D. Politis and L.A. Nemanich and R.T. Keller report that transformational leaders facilitate the process of knowledge acquisition from external sources. This is known as compiling data from rivals and comparing ROI and other pertinent information and then disseminating this information to employees. Executives who act as transformational leaders enhance knowledge acquisition through intellectual stimulation that facilitates knowledge transfer and simultaneously explores more innovative solutions for organizational problems. Executives that embrace transformational leadership have a positive impact on knowledge accumulation.  

Transformational leaders also have found knowledge integration improves through facilitating knowledge sharing throughout all levels of the organization. Transformational leaders also positively impact knowledge integration through enhancing the dynamic relationships among employees and departments, but most importantly, through satisfying customer needs and adding to financial success. Executives use transformational leadership to develop trust and foster employees’ ability to develop higher-functioning relationships not at the higher echelons of the organization but between the lines of the organizational chart. Scholars Y. Liu and J.S. Phillips explored the impact of transformational leadership on knowledge sharing, and argue that having a transformational leader enhances knowledge sharing.  Each level of the organization has the tools and techniques necessary to manage knowledge as it constantly changes and executives incorporate this knowledge into communication and change instantaneously.

Furthermore, transformational leaders improve networking with external sources through focusing on developing relationships and leading between the lines of the organizational chart to better meet shareholder needs. Furthermore, executives inspire organizational members to network with more successful competitors by sharing successes to build alliances and not only enhance competition but communicate best practices as a way of keeping the highest standard of operation in the industry and being the go-to organization for successful modeling of profitability, customer service, and employee satisfaction. In doing this, executives create an inspiring view of the future and motivate employees to develop relationships with external environments to identify new opportunities that occur in an ever-changing hypercompetitive marketplace.          

Conclusion 

Many organizations still implement knowledge management initiatives without sufficient consideration of their organizational leadership. When executives ensure the effectiveness of knowledge management projects, they increase control and lesson operational risk. 

References 

  • Bass, B.M. (1999). Two Decades of Research and Development in Transformational Leadership. European Journal of Work and Organization, 8(1), 9-32.
  • Burns, J.M. (1978). Leadership, New York: Harper & Row.
  • Lee, J.H., & Kim, Y.G. (2001). A stage model of organizational knowledge management: a latent content analysis. Expert Systems with Applications, 20(4), 299-311.
  • Liu, Y., & Phillips, J.S. (2011). Examining the antecedents of knowledge sharing in facilitating team innovativeness from a multilevel perspective. International Journal of Information Management, 31(1), 44-52.
  • Marturano, A., & Gosling, J. (2008). Leadership, London: Routledge.
  • Nonaka, I. (1994). A Dynamic Theory of Organizational Knowledge Creation. Organization Science, 5(1), 14-37.
  • Nemanich, L.A., & Keller, R.T. (2007). Transformational leadership in an acquisition: A field study of employees. The Leadership Quarterly, 8(1), 49–68.
  • Politis, J.D. (2002). Transformational and transactional leadership enabling (disabling) knowledge acquisition of self-managed teams: The consequence for performance. Leadership & Organizational Development Journal,23(3-4), 186-198.

Mostafa Sayyadi, CAHRI, AFAIM, CPMgr, works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to HR.com and Consulting Magazine.  

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