What are some crucial steps towards being a transformational CIO?

I think everyone has the right answers above, I would summarize as:

 - As CIO you’re a businessperson first.  Each transformation project must have a business justification and associated ROI.

- As CIO you’re part of a business team.  Communicate with your peers, align with the company’s strategic objectives. Share the wins.

-  As CIO you need to deliver business results.  Small repeated wins develop credibility and trust while also allowing for course correction. 

A transformational CIO has a vision of what could be.  Transformation by definition means that you move from where you are to where you need to be. 

You don't have to make up that vision yourself.  It's probably preferable if you do not.  You need to collaborate with your peers, understand the corporate strategy and vision and find a consensus of where you all need to go.  As an aside, we do a survey of CIOs every year and we found in one of them that there was a big corelation between the budget increase in IT and the perception of the CIO as a "collaborator".  

Leaders who can "co-create" with their peers and their employees will have a much better chance at succeeding.

Last, and I focus on this in my book Digital Transformation in the First Person, you have to "sweat the small stuff" and engage at every level, with determination and what I can only call "organizational courage".  Take some chances, make some mistakes, but always, always always come back to that vision and the path to get there.  When you act like a human, humans will follow you.  When act like a...    You can finish that yourself.

Being business oriented rather than technologically focused and really understanding the business problem and/or drivers of success is key. That said being close to the business through strong relationships will also give you the trust factor and latitude to deliver. And having a very good understanding of change management and the organization's dynamics eg: culture, adds to the likelihood of success. To wrap up knows the business, knows the management, knows the culture and finally can translate/innovate the delivery of IT solutions at speed.

Listen to the business, stay on top of industry trends, seek an opportunity to quickly deliver a business win. These "wins" are cumulative - they will give you the credibility to deliver more opportunities where IT can make a difference in the value chain. The business will see you as transformational when the perception of the IT department shifts from "IT is an overhead cost the we need to manage down" to "IT is a growth engine" . 

Be well read and well informed
Understand the business and where the organization fits in the larger ecosystem

Build a great team capable of delivering on promises