How Transformational Leadership Leads to Healthy Cultures

transformational leadership in business

In part 1 of this 2-part series, we began by introducing this working definition of transformational leadership:

Transformational Leadership is the relentless pursuit of the organizational vision through the practices of: self-awareness, self-management, boundary setting, and honest conversations.”

We then unpacked the differences between management and leadership (both of which are good and needed to successfully run an organization). We concluded with an in-depth look at the importance of and how-to steps for cultivating both self-awareness and self-management. Now let’s take a deeper look at what it means to set (and hold) healthy boundaries, and how that beautifully sets us up to have honest conversations.

Setting Company Core Values

In what is perhaps one of the best written books on the subject of boundaries (“Boundaries for Leaders”), Dr. Henry Cloud writes, “We get what we allow.” As leaders, we must be acutely aware that we set the tone for what is (and is not) allowed when it comes to behaviors within the organization. This means we must have well-articulated core values.

Further, those core values have to be deeply embedded in the organization. Finally, our actions (and inactions) and words – both in one-on-one conversations and publicly – have to reinforce the unwavering importance of these core values.

Many organizations of a certain size have taken the time to articulate their mission/just cause (why we exist as an organization) and vision (where we’re going). The next step in this journey is being very specific about how we get there. In other words, “how” do we do things around here – what is acceptable and what is not.

Another way to look at this is to examine the differences between you and your competitors. It stands to reason that your competitors’ mission/just cause and vision is likely to be very similar to yours, because you are in the same industry and doing very similar things (making products, delivering services, etc.). You all are probably trying to become the best in your space in doing what you do (vision) in order to grow and better fulfill a need in the world (mission/just cause).

So, what makes your organization unique? What does it look like, sound like, feel like to be within your organization? The answers to these questions are the building blocks to your core values.

A mentor and colleague of mine, Mark Freier of WhatIF Enterprises, utilizes an excellent tool developed by Jim Collins to help organizations walk through the process of discovering their true core values (some organizations have stated values that don’t feel to employees like they are well aligned to their actual core values).

The exercise asks employees to name the people they would send to represent the company on a rocket ship to Mars. The key in the exercise is asking each person, “What is it about each person that is most representative of who we are as an organization?” Therein lie the true core values of the organization.

Living Your Core Values

Defining the core values, and getting very clear about their meaning and importance, is the first step (and often the hardest). For many leaders, the next step is far more fun: embedding the core values within the organization. While it’s fine to print posters for the conference rooms and banners for larger workspaces – the real work is in bringing these core values to life in our personal interactions.

The leader should open every meeting (and I mean every meeting) with the core values. Whether it is an all-hands-on-deck employee meeting or a gathering of executive leadership, it should always begin with a review of what is most important to the organization about how it does things.

Leaders throughout the organization should be on the lookout to “catch” people exhibiting the core values, and should develop a system of recognition for these behaviors. Think simple and impactful – like a letter signed by the leadership team detailing the observed behavior that is delivered in person. Try to stay away from monetary rewards.

Performance reviews should be organized around employee performance within each of the core values. Employee discipline, when necessary, should be clear about the core values being violated. It should be eminently clear to everyone throughout the organization what is, and is not, expected when it comes to how things are done within the organization. We find that it is very important to define both the belief and the actions for each core value. The belief speaks to the intention of the core value, and the actions are how we see these core values at work.

Reinforcing Core Values through Honest Conversation

Clearly established and regularly reinforced boundaries set up the organization for what is, perhaps, the most important step in maintaining a healthy organization that is working together toward positive transformation: honest conversations.

It is truly staggering to meet the large percentage of high-ranking leaders who genuinely fear addressing destructive behaviors within their organizations. When you create time and space for these leaders to be honest about why they are not addressing certain behaviors, the answer almost always comes back to not having established clear, unambiguous boundaries about what is and is not acceptable. So unhealthy ways of doing things (“how”) are sometimes allowed to continue, because the near-term results (“what”) are good – due to the ability of the high performing (albeit, unhealthy) individual.

When we have clearly established boundaries on what is and is not acceptable within our core values, people from throughout the organization address unhealthy behaviors as they occur (instead of letting them fester).

Simple, straightforward conversations begin with things like, “I have noticed you saying/doing [identify the behavior], and that is not aligned with our core values [point out the specific value or values being violated]. Even though you might be getting results that are good right now, we have to act within our core values to have long-term success in continuing to become more fully who we are.”

If leaders (and others) continue to reward behaviors that are highly aligned to the organization’s core values, and quickly address behaviors that are not, the organization’s alignment and speed increase dramatically. Those who want to become more aligned to these values become more passionate about them – and those who do not wish to become more aligned to these values seek other opportunities.

This above behavior (addressing things even when they might be uncomfortable to talk about) is called telling the “kind truth.” The phrase “brutal honesty” is woefully outdated and wouldn’t align with any healthy organization’s core values. Instead, the organization insists that everyone is required to tell the whole truth (no one is allowed to hold back part of the entire truth) – and everyone is required to do it as professionally and kindly as possible. With healthy boundaries – and regular practice – the kind truth becomes easier to speak and helps organizations quickly surface and address behaviors that would otherwise become toxic to the environment.

So, I encourage and challenge you to begin to do the things for your team to establish, embed and reinforce healthy boundaries through the utilization of core values. Then, lead the charge in having honest conversations throughout the organization by speaking the kind truth. Be the courageous one to lead the change you want to see in your organization – you’ll be amazed how quickly others will join in.


Patrick Davidson is the Founder of CoStratEx. Patrick has spent two decades helping organizations to learn disciplined strategic planning & focus, how to develop a healthy culture led by a cohesive, high-functioning leadership team and brilliant execution and measurement systems. He’s held leadership positions at Beaver Aerospace & Defense, Orchid Orthopedic Solutions and Metalmite Corporation and assisted many other organizations as a trusted advisor through his company CoSratEx.

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