The Impact of Exemplary Transformational Leadership on the Performance of Selected Water and Sewerage Companies in Kenya

Purpose: The study examines the impact of exemplary transformational leadership on the performance of selected water and sewerage companies in Kenya. It specifically assesses the effects of three exemplary transformational leadership practices modeling the way, challenging the process, and empowering followers on water company performance to enhance understanding of leadership performance dynamics and improve service delivery in the water sector.

Methodology: Guided by a positivist research philosophy, the study adopted a descriptive research design and quantitative approach. The target population was 4,655 employees from 13 water and sewerage companies under the Athi Water Works Development Agency. A sample of 368 respondents was selected using probability sampling techniques. Data were analyzed using descriptive and inferential statistics, with multiple regression analysis conducted in SPSS version 27. The study was grounded in Transformational Leadership Theory and the Balanced Scorecard framework.

Findings: The results indicate that exemplary transformational leadership practices have differentiated effects on organizational performance. Empowering followers was the strongest and most significant predictor (β = 0.391, p < 0.001), highlighting the importance of participation, collaboration, and recognition in enhancing performance. Challenging the process also had a significant positive effect (β = 0.192, p = 0.016), emphasizing innovation and continuous improvement. In contrast, modeling the way showed no significant direct effect (β = 0.022, p = 0.779), suggesting it primarily functions indirectly by building trust and strengthening other leadership practices.

Unique Contribution to Theory, Practice and Policy: The study extends Transformational Leadership Theory by demonstrating that leadership practices exert unequal effects on performance, with empowering followers as the dominant driver and challenging the process reinforcing innovation and intellectual stimulation. Modeling the way is shown to operate mainly as an enabling mechanism that supports other leadership behaviors through trust and credibility. In relation to the Balanced Scorecard framework, the findings empirically link leadership behaviors to learning and growth, internal processes, and overall performance, showing clear causal pathways to effectiveness. Practically, the study underscores the need for leadership development focused on empowerment and innovation competencies. From a policy perspective, it supports competency-based leadership frameworks and institutional systems that enhance empowerment, innovation, and continuous improvement in the water sector.