TRANSFORMATIVE LEADERSHIP:
What it is—and why it matters more than ever
Forces of disruption are transforming every aspect of business—and of life. To manage disruption’s challenges and capitalize on its opportunities, organizations need a decidedly new type of leader. This new leader will bring a potent—and rare—combination of capabilities to the role. While those capabilities may seem counterintuitive to some, they’ll prove vital for unlocking an organization’s power to emerge stronger from disruption.
The Great Resignation. Supply chain woes. Radical new business models. Climate crises. Pandemic aftershocks. Geopolitical upheaval. For business leaders today, responding effectively to these and other disruptions to business constitutes their primary strategic challenge. Disruptive forces have gathered so much momentum that they’re poised to transform the world economy—through their sheer number and magnitude as well as the complexities of their interconnected global impacts.
And it’s not just the world economy that’s undergoing disruption; the concept of leadership itself is being upended. In times of crisis, people look to their leaders for the comfort and calm that come with knowing that leadership has a sound plan. Old ways of leading during difficult times—like command and control—aren’t going to provide this comfort and calm nor will they help companies surmount the challenges and seize the opportunities that disruption delivers. To emerge even stronger from multiple and simultaneous disruptions, organizations in every sector and industry need a new kind of leader—one who determines the direction in which their organization must head, amid the chaos, and one who inspires everyone in the organization to head toward that direction.
Enter the transformative leader
The word transformative describes this new type of leader. Such leaders understand what the organization must transform into so that it may successfully navigate a disrupted landscape. To drive the needed transformation, these leaders take ownership of and effectively communicate crucial elements that form their organization’s desired direction.
Photo by charlesdeluvio on Unsplash
WHY?
Why does the organization exist? A compelling purpose—such as battling climate change, addressing major social injustice, or helping people achieve their full potential—is the organization’s true north. That purpose remains constant no matter how the environment is changing, and its pursuit constitutes a lifelong journey for the organization because great purposes are never fully achieved. Their real powers are that they excite and inspire and make people want to join in the pursuit.
WHERE?
The organization’s mission is its most ambitious goal. Unlike the purpose, the mission is achievable—though it is so huge and audacious that not only does it feel exciting to employees but also a bit frightening.
WHERE?
The organization’s mission is its most ambitious goal. Unlike the purpose, the mission is achievable—though it is so huge and audacious that not only does it feel exciting to employees but also a bit frightening.
WHAT WILL THE JOURNEY LOOK LIKE?
Values represent the choices made about how members of an organization are expected to behave with one another. Values thus strongly influence what it is like when employees interact with each other and their leaders in pursuit of the mission.
HOW?
The strategy spells out how the organization intends to achieve its mission. Every mission has many possible ways to achieve it, so transformative leaders make choices and weigh trade-offs among the many options.
HOW?
The strategy spells out how the organization intends to achieve its mission. Every mission has many possible ways to achieve it, so transformative leaders make choices and weigh trade-offs among the many options.
When transformative leaders own and communicate these elements of their organization’s direction, they foster a culture within the enterprise that empowers everyone in it to pull together in that same direction. Indeed, we often cite organizational expert Edgar Schein, of Massachusetts Institute of Technology, who teaches that leadership and culture are two sides of the same coin. Leaders’ values and behaviors, exemplified by CEOs, powerfully shape their organization’s culture. And at the same time, culture strengthens and sustains the organization and its leadership through the proliferation of those same shared values and behaviors.
Transformative Leadership starts with the CEO
In light of the many and simultaneous disruptions we are and will be living through, what capabilities must leaders possess to provide the comfort and calm that their followers need?
Drawing on decades of work with clients, on our proprietary research, and on our analysis of disruptive forces, we have identified three core capabilities that define the transformative leader: resilience, adaptability, and emotional intelligence, abbreviated as EQ.
Blended within one individual, these traits and skills create what’s called a transformative leader—someone who knows how to set the direction for the organization, who makes people want to follow, and who wins people’s commitment to the purpose, mission, values, and strategy that the leader has laid out.
Achieving mastery of all three skills must start with CEOs— how they lead, what types of leaders they, in turn, hire and promote, and which behaviors and results they reward. The mastery needs to cascade to the executive team as well as to leaders and managers at every level in the organization. Indeed, the transformative leadership model we’ve defined isn’t just for those in the C-suite to follow; it’s for the development of executive talent throughout the organization. The result? A strong and nimble talent bench that’s vital for robust succession planning, which in turn is a crucial ingredient in strategic talent management and culture building.
Photo by Christophe Laurenceau on Unsplash
ALIXPARTNERS TRANSFORMATIVE LEADER MODEL
RESILIENCE
Standing firm and maintaining calm in the face of adversity
Resilient leaders excel at handling adversity.
Resilient leaders respond constructively and decisively to adversity’s numerous forms, including ambiguity, uncertainty, and failure. They possess the fortitude needed to focus on a few key priorities, and they sustain that focus despite the many distractions inherent in running a complex organization. They have the confidence and know-how to recover from setbacks; to remain calm, composed, and rational; and to shift course as needed, and with optimism, because they know that those around them are watching closely.
Resilience is a mental quality. To acquire or strengthen it, leaders must cultivate a mindset characterized by clarity, equanimity, and immovable resolve in a business environment that’s constantly in flux. Like Olympic athletes, resilient leaders not only bounce back from failure and adversity but also are eager to try again. What’s more, they coach those around them to build their own resilience by rallying dispirited colleagues and modeling resolve.
ADAPTABILITY
Flexing to meet dynamic circumstances
Leaders who embody adaptability have a clear and unwavering understanding of their organization’s goals but are not rigidly held hostage to only one way of achieving them.
They flexibly shift tactics as needed to attain the goals, such as reconfiguring their organization’s corporate strategy, executive team, or rewards and compensation practices to elicit the right mindset and behaviors in others.
A learning mindset and a long-term, systemic perspective are essential ingredients for adaptability. Adaptive leaders know that linear solutions are too simplistic to solve the complex, systemic problems presented by disruption and that such solutions can spawn unintended consequences. So, instead of designing linear solutions, adaptive leaders engage in systems thinking to arrive at more-effective, more-enduring solutions. Here’s an example: A leader who’s a linear thinker decides to establish race- and gender-based hiring quotas for managers after concluding that the organization lacks sufficient diversity in its workforce. But the move has predictable downside risks. A leader with a systems-thinking mindset digs deeper to arrive at a better solution. A systems-thinking leader suggests first interviewing a cross-section of employees, managers, and executives with a view to grasp what has led to the lack of diversity. This investigation reveals that even when teams comprise employees of diverse backgrounds, those employees have been made to feel unwelcome in the organization. The resulting solution centers on ways to foster a more inclusive organizational culture, and, informed by the problem’s root cause, it proves far more effective than hiring quotas.
EMOTIONAL INTELLIGENCE (EQ)
Understanding and effectively managing yourself and others
The skills that get aspiring leaders to the top jobs—such as strong individual achievement or strategic thinking—are no longer the skills that will make them superb leaders.
Organizations that are going to win at disruption need leaders with a different set of capabilities. Perhaps most important, leaders must possess EQ: the ability to understand and manage their own emotions and behaviors while also understanding the experiences and emotions of key stakeholder groups both within and outside their organizations, including employees and customers.
Increasingly, leaders have needed EQ to answer to a growing list of stakeholder groups, each of which has ever-more-stringent expectations and is making ever-more-stringent demands. Yet EQ is still in short supply—possibly because for many people, it’s more difficult to master than resilience and adaptability. Leaders who possess EQ together with resilience and adaptability will stand out clearly from the crowd. And with CEOs becoming increasingly anxious about losing their jobs because of disruption—a key finding 2022 AlixPartners Disruption Index—those who can become transformative leaders may well enhance their job security.
AlixPartners Transformative Leader Model: EQ
- Maintains self-awareness and self-control with integrity
- Communicates effectively
- Assembles, aligns, and inspires high-performance teams
- Cultivates positive relationships
- Demonstrates strong social intelligence
- Champions diversity, equity, and inclusion
- Leads through development and collaboration
ALIXPARTNERS TRANSFORMATIVE LEADER MODEL
RESILIENCE
Standing firm and maintaining calm in the face of adversity
Resilient leaders excel at handling adversity.
Resilient leaders respond constructively and decisively to adversity’s numerous forms, including ambiguity, uncertainty, and failure. They possess the fortitude needed to focus on a few key priorities, and they sustain that focus despite the many distractions inherent in running a complex organization. They have the confidence and know-how to recover from setbacks; to remain calm, composed, and rational; and to shift course as needed, and with optimism, because they know that those around them are watching closely.
Resilience is a mental quality. To acquire or strengthen it, leaders must cultivate a mindset characterized by clarity, equanimity, and immovable resolve in a business environment that’s constantly in flux. Like Olympic athletes, resilient leaders not only bounce back from failure and adversity but also are eager to try again. What’s more, they coach those around them to build their own resilience by rallying dispirited colleagues and modeling resolve.
ADAPTABILITY
Flexing to meet dynamic circumstances
Leaders who embody adaptability have a clear and unwavering understanding of their organization’s goals but are not rigidly held hostage to only one way of achieving them.
They flexibly shift tactics as needed to attain the goals, such as reconfiguring their organization’s corporate strategy, executive team, or rewards and compensation practices to elicit the right mindset and behaviors in others.
A learning mindset and a long-term, systemic perspective are essential ingredients for adaptability. Adaptive leaders know that linear solutions are too simplistic to solve the complex, systemic problems presented by disruption and that such solutions can spawn unintended consequences. So, instead of designing linear solutions, adaptive leaders engage in systems thinking to arrive at more-effective, more-enduring solutions. Here’s an example: A leader who’s a linear thinker decides to establish race- and gender-based hiring quotas for managers after concluding that the organization lacks sufficient diversity in its workforce. But the move has predictable downside risks. A leader with a systems-thinking mindset digs deeper to arrive at a better solution. A systems-thinking leader suggests first interviewing a cross-section of employees, managers, and executives with a view to grasp what has led to the lack of diversity. This investigation reveals that even when teams comprise employees of diverse backgrounds, those employees have been made to feel unwelcome in the organization. The resulting solution centers on ways to foster a more inclusive organizational culture, and, informed by the problem’s root cause, it proves far more effective than hiring quotas.
EMOTIONAL INTELLIGENCE (EQ)
Understanding and effectively managing yourself and others
The skills that get aspiring leaders to the top jobs—such as strong individual achievement or strategic thinking—are no longer the skills that will make them superb leaders.
Organizations that are going to win at disruption need leaders with a different set of capabilities. Perhaps most important, leaders must possess EQ: the ability to understand and manage their own emotions and behaviors while also understanding the experiences and emotions of key stakeholder groups both within and outside their organizations, including employees and customers.
Increasingly, leaders have needed EQ to answer to a growing list of stakeholder groups, each of which has ever-more-stringent expectations and is making ever-more-stringent demands. Yet EQ is still in short supply—possibly because for many people, it’s more difficult to master than resilience and adaptability. Leaders who possess EQ together with resilience and adaptability will stand out clearly from the crowd. And with CEOs becoming increasingly anxious about losing their jobs because of disruption—a key finding 2022 AlixPartners Disruption Index—those who can become transformative leaders may well enhance their job security.
AlixPartners Transformative Leader Model: EQ
- Maintains self-awareness and self-control with integrity
- Communicates effectively
- Assembles, aligns, and inspires high-performance teams
- Cultivates positive relationships
- Demonstrates strong social intelligence
- Champions diversity, equity, and inclusion
- Leads through development and collaboration
A potent catalyst for leading through disruption
In transformative leaders, the three capabilities of resilience, adaptability, and EQ coalesce to create a potent catalyst for positive change.
Together these capabilities operate as a system fueled by a set of powerful reinforcing loops. Within the system, each capability enables and enhances the others. The resulting dynamic of mutual reinforcement between the three creates a leadership engine that’s far greater than the sum of its parts.
For instance, to bounce back from and remain optimistic in the face of adversity, a leader draws on the ability to regulate personal emotions (a key ingredient in EQ) as well as the ability to adapt to shifting circumstances. Meanwhile, the leader’s success in adapting to changed circumstances fosters a sense of confidence that in turn is vital for building resilience. And the strong social intelligence and ability to cultivate positive relationships—which is important in EQ—enable the leader to bring people together in order to explore ideas for adapting to the new realities the organization faces.
The link between Transformative Leadership and trust
Transformative leaders exude authenticity because their behaviors reflect and align with their values, their mission, and their sense of personal and professional purpose. And because authenticity engenders trust, others become inspired to follow as well as emulate them. This notion of trust merits underscoring: according to findings from the 2022 Edelman Trust Barometer, distrust now constitutes society’s default emotion, and businesses must take the lead in breaking the cycle of distrust.
Transformative leaders are thus best suited to lead organizations through a disrupted landscape because they serve as strong role models while also fostering the inclusive, supportive environment that employees, especially younger ones, demand. Consequently, such leaders position their organizations to attract and retain the very best talent—arguably, the most important ability for organizations seeking to capitalize on disruption’s new opportunities and overcome its toughest challenges.
Photo by Jonas Jacobsson on Unsplash
Photo by Charles Forerunner on Unsplash
Transformative Leadership in action: a case in point
Stanley Bergman, 2017 winner of Chief Executive magazine’s CEO of the Year Award, has been chairman and CEO of Henry Schein since 1989, taking the lead at the family-run company as the first nonmember of the Schein family. The company, which distributes healthcare products and services, appears on Fortune magazine’s World’s Most Admired Companies list and is ranked by Fortune as number one in its industry for social responsibility. Henry Schein has also been often recognized by the Ethisphere Institute as a World’s Most Ethical Company.
Like so many other companies in goods-based industries, Henry Schein has experienced challenges such as supply chain disruptions and inflation caused by aftershocks of the COVID-19 pandemic, yet Bergman’s qualities as a transformative leader have long helped him foster an organizational culture that has proved essential for navigating through past and current disruptions.
RESILIENCE
Bergman demonstrates an impressive cognitive ability to function effectively in the face of ambiguity and setbacks. Even before taking the helm at Henry Schein, he modeled resilience by responding swiftly and effectively to crises. When a new computer system promptly failed after its installation, the company nearly went out of business. Bergman and the senior managers pitched in at the warehouse to fill orders.
ADAPTABILITY
Bergman understands what’s required in different situations; he seeks ongoing learning; and he can navigate complex information, relationships, and situations. David Francis, an analyst at RBC Capital Markets, said of Bergman, “He has set the tone and culture of a company that has become a model of execution in a competitive marketplace [and] has done a great job of keeping the company focused on the long term while knocking out the quarter.”
EMOTIONAL INTELLIGENCE
Bergman exhibits strong self-awareness; he has an accurate understanding of his own strengths and weaknesses; and he builds and maintains effective, collaborative relationships. As just one of many examples, he has been an ardent and vocal advocate for social justice, including co-chairing a group of leading Jewish and Muslim Americans formed to jointly advocate on issues of common concern.
With Bergman at the helm, Henry Schein has become the world’s largest provider of healthcare solutions and services for office-based animal health, dental, and medical practitioners. The 90-year-old company now has operations in more than 30 countries, employs 19,000 people, and recorded sales of $10.1 billion in 2020. (Sales have grown at a 12% compound annual growth rate since the company went public in 1995.)
Backed by the strong culture of trust that Bergman has built at Henry Schein through his transformative-leadership capabilities, the company is well-positioned both to withstand the forces of disruption that are reshaping its industry and to maintain its trajectory of success.
Even though Transformative Leadership matters more than ever, mastering its defining skills isn’t easy. For some executives, the attitudes and behaviors that characterize transformative leaders will seem difficult, if not downright impossible, to adopt depending on factors such as their personal history and the industries and geographies in which they work. To take just one example, studies of leadership repeatedly demonstrate that empathy and the pursuit of power are inversely related. Getting oneself into the corner office often comes at the expense of others. To transform themselves into the kind of leaders needed for the future, many executives will need to do some intense professional- and personal-growth work—beginning with a thorough self-assessment of their current capabilities.
But there’s good news: In our work with clients, we’ve seen that almost anyone can learn to become a transformative leader—if willing to experiment with new approaches, view the role from an informed perspective, and engage in honest self-examination. We’ve worked with leaders with markedly different personalities—introverts and extroverts alike—who operate in a diverse array of industries. And we’ve seen firsthand that the personal transformation essential to becoming a transformative leader is eminently doable. Does it take effort and commitment? Decidedly yes. But executives who shy away from the work risk depriving themselves—and their organizations—of a vital opportunity.
Meet the authors:
Ted Bililies, Ph.D.
Chief Talent Officer
Managing Director
Clark Perry, Ph.D.
Director
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