Transformational leadership
7 lessons from real-world innovators
Published on: January 6, 2025
Last update: January 6, 2025
There are two ways to talk about transformational leadership.
We can dive deep into the academic theory created by Bruce Avolio and Bernard Bass in 1991 and understand how it fits into the broader full range leadership model. Or, we can look at some real-world examples of organizations displaying transformational leadership and let their stories illustrate the principles of the theory.
The internet is saturated with theories, so, for a change, we’ll go with the second approach.
But first, let’s define transformational leadership.
What is transformational leadership?
Transformational leadership is a leadership theory where a leader uses a vision or a goal to energize, inspire, and develop their team. Such leaders don’t treat vision as a tool to pacify stakeholders but as an essential value to power their routine.
Transformational leadership puts change at the center of business strategy. After all, a vision or goal can only energize teams that are comfortable with change. Otherwise, they’ll advocate for the status quo.
For us, this might not seem to be a radical concept. But it’s important to note that the continuous need to grow and embrace change is a relatively recent phenomenon in management. For decades, most leadership styles alternated between the other two examples of the full range leadership model:
1. Transactional leadership: The leader encourages or discourages behaviors through rewards and punishments.
2. Laissez-faire leadership: The leader allows their team to make decisions on their own and avoids any responsibility.
Transformational leadership can only work if the employees have an aversion to stagnation. Traditionally, employees (just like most managers) carried an aversion to change. Leaving the comfort zone was the hallmark of exceptional outliers, not a basic expectation. Today, employees understand that stagnation can jeopardize their careers.
We now have a situation where both the organizations and the employees crave continuous growth, providing an ideal breeding ground for transformational leadership.
Examples of transformational leadership
It can be tempting to categorize leaders based on their personalities or reputations. However, the truth is always more nuanced. No one is a perfect transformational or laissez-faire leader. All leaders show traces of different leadership styles in different scenarios.
So, instead of focusing on people, let’s focus on specific instances that capture the essence of transformational leadership.
1. Microsoft embraces open source (Satya Nadella)
The story of how Microsoft CEO Satya Nadella revamped the company's culture is perhaps the most discussed example of transformational leadership in recent years. Satya's calm personality differed vastly from his aggressive predecessor Steve Ballmer, which made the transformation even more visible.
In the early 2010s, Microsoft acquired the reputation of a company past its prime. The record high of its stock prices was way back in 1999. Its foray into the smartphone market turned out to be uninspiring. Its Surface tablets failed to create a mark in the market.
Satya joined in 2014 and changed Microsoft’s mission to “empower every person and every organization on the planet to achieve more.” He transformed Microsoft’s culture from a closely guarded traditional IT organization to an empathic and collaborative company.
Nowhere is this shift more visible than in Microsoft’s approach to cloud technology and open source. Steve Ballmer had initially referred to the open source OS Linux as “communism” and “cancer that attaches itself in an intellectual property sense to everything it touches.”
On the other hand, Satya is an advocate for open source collaboration, and under his leadership, Microsoft joined the Linux Foundation as a Platinum Member.
Under Satya's leadership, Microsoft also made bold acquisitions, including LinkedIn, GitHub, and Activision Blizzard, cementing its dominance across professional networking, developer communities, and gaming. These moves exemplified Satya's ability to align acquisitions with long-term growth strategies while maintaining the collaborative culture he inspired.
Today, Microsoft’s stock prices are almost 10X from when Satya took over. It’s safe to say their best is yet to come, as Microsoft leads the way in generative AI through its strategic partnership with OpenAI and Copilot integrations across its product suite.
Key takeaway: Organizational culture is set right at the top. If you don’t embody the values you want to see in your team, no culture codes or polished presentations can make up for it.
2. Canva democratizes design (Melanie Perkins)
Melanie Perkins, Co-founder and CEO of Canva, leads one of the rare unicorn startups that are also profitable. Ranked 89th on Forbes' list of "World's 100 Most Powerful Women," Melanie is among the youngest female CEOs to helm a multi-billion-dollar company.
In 2024, Melanie launched Magic Studio on Canva, a suite of AI-powered tools designed to democratize graphic design. Canva has always had the reputation of an easy-to-use tool that even non-designers can use, but Magic Studio took it even a step further. It enabled users to create professional visuals for social media posts, presentations, and videos simply by describing their ideas in natural language.
Unlike many companies rushing to adopt generative AI, Canva's integration of Magic Studio was strategic and seamless. The new tools blended effortlessly with existing features, maintaining the platform's hallmark simplicity and minimizing the learning curve for users.
Within six months of the launch, Canva’s active monthly users surpassed 200 million, an increase of almost 20 million. Its AI tools have now been used over 10 billion times, demonstrating their role in enhancing user accessibility and experience. Recognizing its significance, TIME named Magic Studio one of the best new inventions of 2024.
With the launch of Magic Studio, Melanie reaffirmed her commitment to inclusivity and creativity, proving that technology, when thoughtfully deployed, can unlock possibilities for everyone. Her leadership continues to inspire as Canva sets a new standard for blending innovation with user-centric design.
Key takeaway: While adopting a major technology is key to avoiding disruption, true success comes from applying it in a way that puts your customers first.
3. NVIDIA bets on the AI revolution (Jensen Huang)
In 2024, as AI became the defining technology of the decade, one name stood out—Jensen Huang, Co-founder and CEO of NVIDIA. He has become synonymous with AI innovation, shaping the trajectory of AI globally.
What makes Jensen's story compelling is how he saw the future before anyone else did. Back in the early 2000s, NVIDIA was a niche graphics card company, catering primarily to gamers. But Jensen saw untapped potential in GPUs for parallel processing, a capability that could unlock the power of artificial intelligence. His gamble paid off in monumental ways.
By 2023, NVIDIA’s GPUs were at the heart of nearly every major AI model, from OpenAI’s ChatGPT to Google's Bard. The launch of the DGX Cloud in 2023 was another masterstroke. This platform offered companies on-demand access to NVIDIA’s high-performance GPUs, enabling them to train generative AI models at a scale previously unimaginable.
The service became a game-changer for industries like healthcare and life sciences, where NVIDIA’s AI-powered tools helped researchers simulate complex drug interactions, and automotive, where its DRIVE platform powered autonomous vehicles.
Jensen's vision catapulted NVIDIA’s market cap beyond $3 trillion in 2024, making it one of the most valuable companies in the world. More importantly, he transformed NVIDIA into the backbone of the AI era, powering advancements that touch nearly every aspect of modern life, from the apps we use to the medicines we develop.
Key takeaway: Bold, transformative bets must be reinforced by a culture that thrives on continuous improvement and challenges the status quo.
4. Google pushes for diversity and inclusion (Susan Wojcicki)
The late Susan Wojcicki, former CEO of YouTube, was often quoted as the most powerful woman in tech. She was the brains behind Google Ads (formerly AdWords) and the $1.65 billion acquisition of YouTube, which by some accounts is now valued at over $400 billion — more than 50% above Netflix’s market cap.
However, Susan's equally vital contribution was to the culture of Google. When she increased paid maternity leave at Google from 12 to 18 weeks, the rate at which new moms left the company fell by 50 percent. She was one of the driving forces behind encouraging the wider participation of women in tech.
Susan created a culture of knowledge sharing within the company to encourage innovation. She promoted active collaboration across smaller teams to develop new solutions. For example, the idea for language translation in Google Talk emerged from discussions between the Google Translate and Google Talk teams, showcasing how her emphasis on inter-team dialogue led to groundbreaking solutions.
Susan's transformational leadership not only drove financial growth but also reshaped Google’s workplace culture, making it more inclusive and innovative. She passed away in 2024 but her legacy continues to inspire the tech industry, emphasizing the critical role of culture in achieving long-term success.
Key takeaway: There is more than just a moral case for inclusive leadership. Nurturing a culture that encourages diverse opinions is the hallmark of innovative teams.
5. Slack’s redefinition of collaboration (Stewart Butterfield)
Slack has achieved one of the fabled goals of all product companies – create a brand synonymous with their business. You don’t message people at work. You slack them.
Stewart Butterfield, founder and former CEO of Slack, has a story with its share of ups and downs, but it does have one unifying thread – adaptability. Both Slack and Stewart's earlier successful product Flickr emerged from failed MMORPG games. He developed Slack as an internal collaboration tool while working on the game Glitch. While Glitch didn’t succeed, Slack became one of the greatest B2B SaaS success stories.
You can’t create such a successful collaboration solution unless your team has mastered the art itself.
A collaborative culture energizes the organization and helps it adapt to changing business requirements. What’s most striking about Stewart's approach to collaboration is that it isn’t limited to his own company. He realized that a successful collaboration software needs to offer options to people. He noticed that a lot of Slack users were using integrations with Atlassian solutions like Trello and Jira.
Therefore, Stewart worked closely with Atlassian even though they were directly competing with Atlassian’s HipChat. Soon, Atlassian realized that they were better off focusing on their core competencies and sold HipChat to Slack. Both companies benefited from their foresight and synergy.
Stewart's collaborative philosophy, rooted in adaptability and foresight, has redefined how teams work and set a new benchmark for how businesses can turn competition into opportunity.
Key takeaway: The best collaboration opportunities often arise from competitors. Win-win scenarios are more common than zero-sum games.
6. Pfizer’s strategic digital transformation saves lives (Lidia Fonseca)
Lidia Fonseca, Pfizer’s Chief Digital and Technology Officer, has been at the forefront of healthcare transformation. During the pandemic, her leadership was instrumental in accelerating the development of Pfizer’s COVID-19 vaccine. By leveraging automation, AI, and data analytics, she compressed timelines and streamlined processes, delivering life-saving treatments to millions.
In 2024, Lidia helped Pfizer introduce PfizerForAll, a groundbreaking platform that brings telehealth, prescription management, and affordability tools under one roof. Engaging over 500,000 users in its first week, PfizerForAll simplified access to essential healthcare services and solidified Pfizer’s role as a technology-driven leader in the industry.
Her vision extends to initiatives like the Digital Companion™ mobile apps, which have pushed the boundaries of AI-powered disease detection and shifted the industry’s focus toward preventive care.
Lidia revolutionized Pfizer’s operations by automating over 90% of its 100 million transactional processes. Through the Pfizer Learning Academy, she empowered employees to embrace innovation, embedding a culture of continuous growth.
Lidia's transformational leadership has modernized Pfizer and set a gold standard for how technology can revolutionize patient care.
Key takeaway: Digital transformation isn’t just about doing what you’re doing faster and cheaper. It requires you to reimagine your organization’s core services with the customer at the heart of every decision.
7. EVERSANA’s “future-back” AI transformation (Scott Snyder)
Scott Snyder, EVERSANA’s Chief Digital Officer, is driving digital transformation in life sciences. With over three decades of experience in technology and innovation, Scott has consistently pushed boundaries, most recently leading EVERSANA’s strategic pivot to AI-first solutions.
Scott's philosophy emphasizes looking "future-back" rather than merely experimenting with the latest trends. Recognizing the revolutionary potential of Generative AI, he spearheaded initiatives to overhaul EVERSANA's operations and services.
Under Scott's leadership, EVERSANA is strategically integrating AI across the company’s operations — from exploring AI's transformative capabilities in regulatory content approvals to creating tools that enhance efficiency and reduce errors.
In 2023, Scott took on the challenge of overhauling the cumbersome medical regulatory review process. Partnering with AWS, he spearheaded an AI-powered platform that leverages Generative AI and natural language processing to streamline content reviews.
Designed to reduce approval times by 40%, this innovation is set to accelerate drug launches and enhance the agility of pharmaceutical companies, redefining how the industry brings critical treatments to market.
As the industry braces for an AI-driven future, Scott's leadership highlights the importance of leveraging technology not as a tool, but as a foundation for innovation. His journey is a great example of balancing technological ambition with actionable strategy.
Key takeaways: AIl digital initiatives must start with a clear vision of the future. Use a "future-back" approach to reimagine core processes and drive meaningful, measurable innovation.
The four elements of transformational leadership
Now that we have explored seven real-world examples, let’s look at how they reflect the four essential elements of transformational leadership.
1. Idealized influence: Transformational leaders act. They embody the change that they want to drive in the organization. When Satya Nadella pushed for humility in Microsoft’s culture, it resonated with the team because they could see it in Nadella’s personality.
2. Intellectual stimulation: Transformational leaders create a culture that encourages knowledge-sharing and creative problem-solving. Jensen Huang bet on the AI revolution, but he couldn't have led NVIDIA to success without buy-in from team members.
3. Individualized consideration: Transformational leaders understand that their team consists of individuals with unique challenges and aspirations. They listen to grievances and take an active interest in furthering their team members’ careers. Susan Wojcicki’s advocacy of maternity leave at Google was a response to reduce the problems new mothers were facing in the company.
4. Inspirational motivation: Transformation can be exhausting. Thus, transformational leaders are experts at motivating their teams to drive incremental changes and accomplish their vision. EVERSANA’s transformation didn’t happen overnight. Scott Snyder and the leadership team had to continuously motivate their employees, run experiments, and learn from data to hit their goals.
The key to successful digital transformation
We often think of digital transformation as the adoption of new technologies. But simply deploying tools doesn’t lead to success in the digital age.
As Caroline Adams, VP and Digital Operations Practice Lead at Modus Create, explains, “Leaders who visibly engage with the digital transformation process, celebrate small wins, and empower their teams to take ownership create a lasting impact on organizational culture.”
Digital transformation is a culture transformation. At its helm are leaders who are motivated and not intimidated by change. Transformational leadership prepares leaders for the new reality of business, one where every company is a technology company susceptible to disruption.
