Although numerous studies point out that communication and effective leadership are measures of success of any organization, very often the lack of communication effectiveness hampers the organizational development of different organizations, companies, associations, including school as an organization. Studies also indicate that a large number of principals in the Republic of Croatia still use traditional forms of school management, which is not in line with modern forms of school management based on democratic access and participative leadership. Knowing that participative eleadership implies involvement of all stakeholders, distribution of power among teachers, allowing their independence and freedom, and taking personal responsibility, the goal of this paper is to examine the possibilities and effects of applying the principles of participative leadership in schools. Through several stages of research following the practical application of method called Appreciative Inquiry, concrete benefits of shifting from the problems and "what is" towards the affirmative questioning possibilities and "what could be" are analyzed and tested. The aim of this paper is to examine the extent to which the principles of participative leadership contribute to the harmonious collaborative relationships, effective defining and implementing change and finding new, creative solutions in the work of the modern school.