Transactional vs. Transformational Leaders

I once had a client I just couldn’t figure out. Call him Dominic. He was a friendly guy with a quick smile and a good reputation. In our work together I found him smart and ethical. Yet he was oddly detached.

Although he always recalled the details of our business conversations, he had little recollection of anything personal I’d shared with him during the time we spent travelling together or chatting over lunch. He was generous with his employees, yet displayed almost no interest in coaching them or providing helpful feedback.

He gave the impression that he didn’t care one way or the other whether he was liked by his staff or his customers, so long as the former did their work and the latter paid their bills.

I was baffled by Dominic’s behaviour until one day it hit me. He was almost wholly transactional. Having spent most of my career working with leaders who were transformational, or tried hard to be, I was blind to Dominic’s transactional leadership style.

As I observed him through this new, transactional frame of reference, I came to understand that it wasn’t personal when he ignored me or failed to ask how my vacation went. In fact, nothing at all was personal with him. He just wanted to do his job and go home.

Transactional vs Transformational Leaders

Transactional leaders focus on tasks. They prize getting things done and tend to treat their relationships with employees and customers as straightforward business dealings. When I performed a particular task to specifications, Dominic gave me a promised reward. Our relationship amounted to an exchange, a quid pro quo devoid of emotional content so long as each of us upheld our end of a contract. Now there is nothing inherently wrong with this approach, but I want something more from the people I spend half my life with. I want transformational leadership.

Transformational leaders operate at a deeper level. They engage people, rather than merely interacting with them. Emotional content is central to the relationships between a transformational leader and her followers. Transformational leaders inspire others to go above and beyond a task to achieve goals that benefit everyone, not just the person who makes the best deal. Shared values and intrinsic rewards suffuse the relationships among followers and the leader. Thus, in the process of working toward common goals, the people involved are changed. These changes take place not only within followers but within leaders as well. The whole is always greater than the sum of its parts when a transformational leader captains the ship.

Example of a Transactional Leader

Bill Gates is a good example of a transactional leader. He prides himself on getting things done and cutting advantageous business deals for himself. He said exactly this in his book and he brags publicly about getting over on those who work with him. Or think of any leader, whatever context they work in. Most prefer to sail along on the status quo breeze rather than inspire and manage the winds of change. Transformational leaders, on the other hand, are risk-takers. They go for the gold, and they do it for everybody.

Example of Transformational Leaders

Abraham Lincoln was a transformational leader. He struggled with his people through the American Civil War and put the good of his country ahead of his physical and emotional well-being. Standing on principle, Lincoln issued the Emancipation Proclamation, for which he was later shot dead. Or consider Margaret Thatcher, who inspired sweeping changes in the UK and “was not for turning” from her values in the face of considerable pressure. Whether you like the Iron Lady’s politics or not, she was a transformational figure at a time when she was almost always the only woman in the room. Not an easy thing to be. Transformational leadership is hard and its practitioners are often controversial.

Transformational leaders can be found at the top, middle, or in the bowels of an organization. They can be liberal or conservative, male or female, of any race or religion, and from a wide range of backgrounds. The one thing they all have in common is that they are rare. And they are certainly more rewarding to work with than are transactional leaders. So before you accept that next job, ask around about the organization’s leaders. Observe what happens in the office. Check out the reviews on Glassdoor or a similar website. And if you find a transformational leader, grab on and hold tight for the ride of your life.