What makes a great supply chain leader? There’s extensive literature and plenty of educational programming about general leadership, but when it comes to supply chain specifically, the real key is having a transformational leadership style. This style has emerged as the most effective for today’s business environment because it’s focused on building and maintaining strong relationships with those you lead, improving organizational learning, creativity, innovation, and high performance.

With these essential aspects in mind, following are four strategies employed by transformational leaders:

1. Transformational leaders inspire others. Supply chains are composed of multiple different but related parts, which often have very different key performance objectives. A transformational leader can inspire these different parts to join in a shared vision that improves quality, service and the bottom line. By inspiring people and teams to follow the vision, the leader unifies them in working toward a common goal. For instance, transformational leader Alan Mullaly, former CEO of Ford Motor Co., saved the company from having to accept a government-issued bailout during the financial crisis of the late 2000s. He aligned the company around the unified One Ford vision. This removed siloed objectives and enabled the company to focus on the supply chain basics of ensuring that production and demand for Ford vehicles were in parity. The company’s financial results dramatically improved: By 2010, Ford's net income had gone from the brink of bankruptcy to $6.6 billion, and Mullaly’s approval rating was a staggering 97% — showing that transformational leadership can drive great results while improving culture.

2. Transformational leaders build trust. Transformational leaders understand the importance of cultivating trust at every touchpoint of the supply chain. Through open communication, consistent reliability and ethical conduct, they forge enduring partnerships with all stakeholders. In a globalized marketplace fraught with risks, trust-building becomes indispensable for mitigating uncertainties and ensuring the seamless flow of goods and information across the supply chain. Trust also increases the speed at which business is conducted and information is shared. When information is shared more promptly, different supply chain links can more effectively predict and react to disruptions. Honda stations its engineers in its U.S. supplier facilities, where they lead kaizen events to help improve efficiency. The company dedicates 13 weeks to this development program, which includes creating a model production line at the supplier’s manufacturing facility. And the engineers stay in touch with the suppliers after they leave the plant. The program has increased supplier productivity by 50%, boosted quality by 30% and cut costs by 7%. Plus, suppliers share 50% of the cost savings generated with Honda.

3. Transformational leaders motivate. The dynamic nature of supply chain demands resilient and motivated teams capable of navigating complexities and overcoming obstacles. Transformational leaders excel in inspiring individuals to perform at their best by recognizing and harnessing their unique strengths. Motivated teams become strategic assets in the face of supply chain disruptions, enabling organizations to adapt swiftly and maintain operational continuity. In 1914, Henry Ford instituted the eight-hour workday and 40-hour work week and doubled his employees’ wages from $2.34 to $5.00 per day. This was his contribution toward work-life balance. He gave his employees time off to rest so that they could come back to work motivated and as their best selves. His program worked. It boosted productivity and instilled a sense of pride and loyalty in Ford’s employees.

4. Transformational leaders innovate. Transformational leaders foster an environment conducive to innovation by promoting experimentation, embracing technological advancements and challenging conventional practices. They also facilitate cooperation among employees and stakeholders, thereby driving innovation. Amazon founder Jeff Bezos established a culture of innovation to grow Amazon into the e-commerce giant it is today. For example, its Relay app enables truckers to enter information prior to their arrival at a warehouse to make on-property times more efficient. Amazon also invested in its own air cargo delivery by spending $1.5 billion on a cargo hub in the Cincinnati-Northern Kentucky area. In addition, $1 billion was allocated to fund startups that develop innovation to make supply chains more efficient and resilient. The company’s advances have been made possible by a leader who was not afraid to take risks and innovate in pursuit of the overall vision.

Building more leaders

In the supply chain landscape, transformational leadership reigns supreme. Transformational leaders build trust and inspire collaboration while fostering a culture of innovation and high performance. By uniting teams around a shared vision and motivating individuals to excel, transformational leaders empower their organizations to navigate complexities and achieve lasting success.