Is There a Perfect Leader in Change? : Transformational and Servant Leadership in Agile Transformation

Abstract: The current environment of the automotive industry is affected by new technologies, growing market dynamics, increasing demands from customers, and regulations such as sustainability requirements. To handle rapid changes many firms are leaning towards a more agile and flexible way of working. Such transformations have a tremendous effect on how organizations are managed and led. This leads to challenges for the leadership that should be able to lead the organization and the people through changing environments. Transformational and servant leadership have been explored in the context of change. However, previous studies show contradictory views on appropriate leadership approaches for companies that are facing change. Therefore this study seeks to evaluate servant and transformational leadership in situations of agile transformations. The purpose of this thesis is to develop recommendations for leaders within incumbent firms that are facing agile transformations. A qualitative case study was conducted and limited to an R&D department within the hardware development at an incumbent automotive firm. Department managers, section managers, project managers, and group managers were interviewed to deepen the understanding of the challenges that the company was facing. Findings indicate that it is important for leaders to consider challenges such as facing resistance to change, considering a new role as a leader, and ensuring psychological safety. This was elaborated on further and the two leadership models; transformational and servant leadership, were expected to contribute to a smoother change process. As psychological safety was seen as important in this change, the leaders had a mindset to encourage followers to take risks. This was done by promoting autonomy and encouraging followers to “test and try”. Servant leaders support agile principles and transformational leaders strive to encourage change initiative. These leadership approaches can therefore enhance and support organizational efforts in working more agile. However, there can not be drawn any conclusion of which leadership model is most suitable for change. Servant and transformational leadership show indications of which leadership attributes are desired for change. Leaders need to evaluate the change situation and the followers' needs to determine appropriate leadership approaches.