“The ultimate test of a transformational leader is the ability to raise up a new generation of leaders.” – Jim Louwsma

The monk who built his Ferrari. Ever heard of this tag? Well, this epithet was conferred by avid Indian netizens to Dr. Sridhar Vembu, a Padma awardee and the CEO of Zoho Corp. Born into a family of farmers, Dr. Vembu graduated from IIT Madras, got his Ph.D. at Princeton University, worked as a systems engineer at Qualcomm, before the transformational vision that changed lakhs of lives back in his village Tenkasi, India occurred to him. I personally am driven and inspired by his work I see him as one of the transformational leaders of the current times. Read on to know my thoughts on transformational leadership!

Today, his brainchild, Zoho, is the first Indian software services unicorn with over 50 million users across 180+ countries for its 40+ apps that digitize business processes ranging from customer acquisition to sales and support.

Apart from their marked business excellence, the founders instituted the Zoho Schools, to train rural folk with skill sets and abilities, most of them who are then employed with Zoho Corp. Zoho’s top employees have also spread their wings to start their own ventures too. The story of the security guard who went on to become an executive programmer too is one for posterity.

All said and done, what was the transformational leadership vision that encouraged a successful Silicon Valley enthusiast to return to his homeland? What drives Zoho to be on par with its global competitors and more importantly, why is Zoho successful? What is unique about Dr. Sridhar Vembu that has the world looking at him with both curiosity and respect? What is unique about his vision? His leadership?

The current environment worldwide is characterized by uncertainty, global turbulence, and organizational instability. To constantly excel in such times is a mammoth challenge and more so, doing it sustainably calls for two things, exceptional revolutionary vision and two, great leadership. Dr. Sridhar Vembu had a perfect blend of the two. And this lends us to terming his leadership- Transformational. What he has done via Zoho is indeed transformational and his exercise – transformational leadership.

What is Transformational Leadership?

According to Bass and Riggio in their seminal work Transformational Leadership, 1998, “Transformational leaders are those who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leaders help followers grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organization.” The core objectives here include a transformational leadership vision, communication of the vision, chalking the road map to the transformational state and finally, leading the transformation by example.

Transformational Leadership Model

Transformational leadership is best described by a four-component model proposed by Bass in 1998.

Idealized Influence: Transformational leaders are charismatic, deliver messages with tact and act as role models by adhering to high levels of ethical and moral conduct. They are the first to take responsibility when things go wrong and commit to complete trust and value to the members. Called a barefoot billionaire, Dr. Vembu was simple in thought but high on ideals. Simple living and high thinking have become the foundational pillars of Zoho because he epitomized them. “I live fairly simply. I hate wearing shoes. If I can avoid it, I do,”

Inspirational motivation: Transformational leaders articulate an appealing vision and inspire followers to commit to it by fostering a sense of purpose by showing optimism about followers’ abilities to perform beyond expectations. Christopher Lau, the founder of eCargo, vouches for the transformational vision of Mr. Vembu, ‘He certainly epitomizes all successful entrepreneurs. Every day there is a new business idea, a new initiative; His hit rate is very low but when he hits, he hits.” “To build this kind of company you almost have to be crazy or insanely ambitious,”

Individualized consideration: Transformational leaders recognize and value the motivations, desires, and needs of individual members. They act as a mentor or coach, provide support and empathy and encourage the followers to develop their innate abilities. Dr. Vembu never criticized the thoughts or opinions of his team. He heard them, believed them, and curated opportunities for them to prove themselves even if they did not have a formal degree. “Numbers are important, but you cannot reduce performance to a set of metrics–it’s counterproductive and inhuman.”

Intellectual stimulation: Transformational leadership is characterized by leaders who challenge assumptions and solicit stimulation by promoting critical thinking and problem-solving skills, creativity, and innovation by stepping outside the box. Curiosity, not intelligence, is the driving force behind the success of transformational leaders. Masterpieces like Zoho Desk, a customer service software, were built out of their Mathalamparai office, in line with the transformational vision that one didn’t have to be in the urban hubs to develop world-class products. “I want my employees to live in these villages because it brings cross-fertilization of ideas. The good stuff, like mentoring and coaching, is what the city folk can lend to the local youth, who Zoho can then recruit.”

The Ultimate Test of Transformational Leadership

We contest that Dr. Sridhar Vembu was a transformational leader but can we vindicate this effective stance? The true effect of transformational leadership is when followers turn into effective leaders themselves. Girish Matrubhootam, ex-vice president for Product Management at Zoho went on to set up the iconic Freshworks, yet another SaaS provider, headquartered in California with global offices in India, Australia, and the European Union. Valued at $13 billion, it has over 50,000 customers including Honda, Hugo Boss, Citizens Advice, Toshiba, and Cisco. “My philosophy of leadership is I identify good people and then get out of their way,”

Transformational Leadership Characteristics

Internal dependency

Transformational leaders have an internal locus of control. “I feel more connected to my roots and enjoy this kind of life, rid of your comparisons. You don’t have to worry about things like: Does my neighbour have a Ferrari; or does my neighbour take a vacation?” he says.

Decision-making while balancing risk and goals

Breaking away from the lure of the Silicon Valley to set up SaaS offerings in the Indian countryside needs an insane amount of courage and unbelievable faith in one’s vision. And to succeed sustainably at that: well, the numbers at Zoho speak for themselves.

Check on their ego

Dr. Vembu’s unassuming demeanour, simple clothes, and bare feet belie his personal wealth and success in building a tech giant competing against global giants like Salesforce, Microsoft, and Google.

Adaptability & embracing change

Transformational leadership demands cognizance of the external changing environment. “Sridhar is able to catch trends very early and then start convincing people about those things. We closed our office two weeks before the government announced the lockdown due to the pandemic. He wanted employees to reach their hometowns before trains, buses, and airports become crowded with sudden panic.” claims Shailesh Kumar, engineering head at Zoho.

Proactive inspiration

Zoho employees are extremely driven by the transformational vision and the inspiration Dr. Vembu inspires to commit to this vision by fuelling their inner spirits and inculcating a sense of purpose to genuinely grow in life. It isn’t easy toeing the transformational leadership line. Being vigorously in pursuit of goals, one could lose sight of people on their teams. Such a kind of leadership, when leaders motivate followers based on rewards or punishments and exercise power from their formal authority is called transactional leadership.

Transformational Leadership Characteristics

Why Should You Become a Transformational Leader?

Post a discussion on the nuances of transformational leadership, it is essential to discover reasons for you to adopt a transformational leadership style in your daily life.

⦿ Transformational leadership espouses a perfect balance of people and profit. It focuses on taking people along as the team works towards achieving organizational goals.

⦿ Transformational leaders’ personalized response empowers individuals and helps them to develop their potential to record higher levels of performance and satisfaction.

⦿ Members of a transformational leader’s team develop positive psychological states and subscribe to greater value to themselves and the tasks that they are meant to complete, resulting in decreased burnout and social loafing.

⦿ Transformational leadership helps tap into the unique talents of the people in their team and draw up a common goal that enhances the quality of relationships and creates a fair, respectful, and supportive environment.

How to Execute a Transformational Leadership Vision

All said and done, a direction towards execution of transformational leadership is imperative. In view of this, outlined below is a set of actionable focused on the execution of transformational leadership by aspiring leaders.

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Developing a challenging and transformational vision, together with the employees.

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Tying this transformational vision to a strategy for its achievement.

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Developing the specifications of the transformational vision and a roadmap for action.

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Expressing conviction and optimism about the transformational vision and its implementation.

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Realization of the desired transformational state through small, planned steps.

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Guide to Transformational Leadership