Perform a Grand Impact for the first time.
This is obtained by having performing a Grand Impact. In the bottom corner of your screen you will see a cone shaped meter called your Burning Gauge that fills when you deal or receive damage. To do a Grand Impact you need to have all four bars of the Burning Gauge full. When the Burning Gauge is full click the right thumbstick, this will "Awaken" your character. While your character is awakened you can then click the right thumbstick again to perform a Grand Impact.
Note: if the character that is awakened is knocked out, then all remaining bars on the Burning Gauge will disappear.