The adjective “transformational” is in vogue these days. The description applies to the pervasive overhauls of business models, best practices and technologies that have become table stakes given our accelerated business environment. In many ways, “transformational” characterizes the astounding speed and depth of change occurring in every corner of an organization, including – or especially – within the tax function.
So, I was intrigued by the title of a new paper by my colleagues Peggi Rockefeller and John Wilson: To Transform Tax Functions, Transformational Leaders Are Needed. I was even more interested to learn that despite the up-to-the-minute-sounding name, the theory of transformational leadership, which the paper explores from the chief tax officer’s point of view, has a long pedigree, dating back to groundbreaking leadership research conducted in the late 1970s.
The fact that the theory has retained its relevance while sustaining the interest of practitioners and researchers for more than thirty years speaks volumes for its value. And it’s not hard to see why it should appeal to tax leaders today.
Transformational leadership offers an attractive alternative to “command and control” leadership styles that rely on the distribution of rewards for clearly defined tasks within rigid departmental boundaries. In contrast, the transformational approach asserts that people are “most effectively influenced by leaders who deeply understand, believe in and effectively communicate organizational goals and how these objectives should be attained,” Rockefeller and Wilson explain. “Transformational leadership does not depend on positional authority, which means that these leaders motivate individuals and teams beyond their management purview.”
Tax leaders have never faced a greater need to extend their influence more broadly within the enterprise. Transformational leadership has much to recommend itself as a way to achieve that, and this paper is a great place for tax executives to learn more about that particular approach.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.