Business leaders have a plate full of responsibilities. Yet, while some leaders are still able to pull off incredible feats, others struggle to create momentum in their organization. Is it because of their leadership style or their personality? How are successful leaders able to greatly inspire their team to achieve a significant company vision?

The answers to those questions lie in the understanding of the difference between charismatic and transformational leadership. Both leadership approaches can lift team spirit at the leader’s will. They use a combination of their personality along with an ambitious company vision to spark quality work efforts from their team. 

Read on to discover a deeper, more detailed understanding of the complexities of these two leadership styles and how to decide which style is right for you and your organization.

What is Charismatic Leadership?

Charismatic leadership is defined by a leader who primarily leverages their charisma to motivate people towards a common goal. Their followers are attracted to them because of their infectious and admirable personality rather than their power and authority.

Mahatma Gandhi is a prime example of an effective charismatic leader. Gandhi started his career in law as a shy, introverted young man. After being forcibly removed from a “whites-only” train in 1839, Gandhi had an epiphany that would send his life on a course toward battling racial inequality. His passion and determination led to India gaining its independence from British rule in 1947. 

The incident on the train empowered Gandhi to speak out against discrimination and rally crowds to follow in his footsteps. In 1930, Gandhi gathered thousands of people to march towards India’s coastal sea to peacefully revolt against their British colonizers, which is now referred to as the Great Salt March. 

Gandhi’s charisma was best exemplified during his speeches. On the brink of India’s independence, Gandhi gave a final speech to set the tone for the revolution. During a Congress meeting in 1942, Gandhi stated, “The mantra is ‘Do or Die.’ We shall either free India or die in the attempt; we shall not live to see the perpetuation of our slavery.” 

Gandhi shows that the foundation of charismatic leadership depends on the personality and actions of the leader. It’s not just about the message they convey, but how they convey it that inspires their followers. Charismatic leaders exhibit exceptional expertise in their field and have a clear vision with the ability to engage with a large audience. 

What is Transformational Leadership?

Transformational leadership is an approach where leaders focus on their followers’ ability to become successful individuals. This perspective allows leaders and their followers to inspire change in social systems. 

There’s no question that Best Buy’s former chairman and CEO, Hubert Joly, is one of the most transformational leaders the electronic retailer has ever seen. During an interview with McKinsey and Company, Joly stated, “My individual, personal purpose is to try to make a positive difference for people around me and then to use the platform I have to make a positive difference in the world.” 

From Joly’s perspective, his primary role at Best Buy was to ensure his team’s success. He accomplished this by listening to his employees and identifying their strengths and weaknesses. In return, this built an environment that helped his team reach and exceed targets. 

Being a transformational leader is no easy feat. Joly also mentions in his interview that, “We need leaders who lead with all their body parts: their brain, their heart, their soul, and their gut.” Transformational leaders should dedicate all their effort to act as role models and inspiration for their team to do the same.

Qualities of a Transformational Leader

A critical difference between charismatic and transformational leadership revolves around the way that its people see the leader. 

Often, charismatic leaders are seen as the source of hope for a better future. The charismatic leaders’ status is often heightened and emphasized. On the other hand, transformational leadership envisions an approach where both the leader and its followers empower each other to achieve higher levels of performance, motivation, and creativity. 

Just as charismatic leaders, transformational leaders excel at creating a vision for the future and creating a powerful, trusting relationship with their followers. Yet, the following traits set transformational leaders apart:

Have an exemplary notion of integrity

Often, there is too much power handed towards charismatic leaders. Organizations’ entire survival tends to depend on them. Why? Because charismatic leaders are often the source of all truth. 

Consider Adolf Hitler, for instance. He is considered one of the world’s most outstanding charismatic leaders. He had way too much power and influence over Germany and… it got out of control. While Hitler’s example is a bit extreme, his reign over Nazi Germany perfectly embodies one of the pitfalls of charismatic leadership. 

Transformational leaders, on the other hand, lead with integrity. Rather than their power being centered around their persona, their power is directed towards the good of their organization. Their attention is centered around how the people in the organization can best pursue the company’s vision. 

Provides recognition and support

Transformational leaders often avoid being in the spotlight. They would rather have the team rather than themselves take the credit for what has been accomplished. 

This is certainly not the case when it comes to charismatic leaders. Charismatic leaders enjoy being the center of attention and would take all the credit for what the organization has achieved. While they often do deserve the credit for it, doing so can undoubtedly damage the team’s morale. 

Transformational leaders would rather encourage their team members to explore the boundaries of what’s possible. They’ll inspire them to try new things, better themselves, and explore their creative ideas. Transformational leaders understand that without their team, the organization would collapse. 

Deciding Between Charismatic vs Transformational Leadership as Your Leadership Style

If you’re choosing between charismatic and transformational leadership styles, it’s important to understand the consequences of each approach in practice. 

Even though strong and passionate charismatic leaders can lead an organization to great success, they can also create challenges during the journey. The challenge for these leaders lies in turning over control to someone else. 

Charismatic leaders tend to believe that nobody else can handle the duties the way they can handle them. And if that organization fails to provide a successor to a charismatic leader, keeping operations running smoothly may prove difficult.

Transformational leaders tend to be people-first leaders. This outlook ignites ample motivation for a team, but can also trigger a sense of constant pressure in the leader’s presence. Because transformational leaders have a ceaseless drive to achieve the grand vision of an organization, they might lead employees to burnout. Employee burnouts can result in missing deadlines, low-quality work, and employees unmotivated to keep up productivity.

When choosing between charismatic and transformational leadership, the ultimate decision depends on the leader. A leader must be self-aware of what drives them and their purpose as a leader. Once that purpose is clear, the next objective is to see how it all connects with the mission and vision of the organization. 

Looking for more leadership insight? We invite you to subscribe to our newsletter to receive more leadership and management insights delivered to your inbox.