Transformational Leadership versus Transactional Leadership What’s the Difference?
There is no denying that organizations are going through some chaotic times, and if you choose to work for any organization locally or globally you will encounter change within your organization.
As for employees in the 21st century, we’ve heard it countless times that for organizations to survive and thrive in turbulent times it is forcing leaders in all industries to take a fresh look at how they do business.
What we know is that change and transitions are inevitable in life and business, and are vitally important for growth. Granted, it’s never easy for leaders and followers to hear, much less comprehend, why their organization is going through a reorganization process. What they know is that their job may be in jeopardy, and they may be joining countless others looking for another job.
Corporate reorganizations bring a new set of challenges, such as: employee engagement issues, reduction in morale, motivation, trust issues, heightened stress and anxiety amongst employees.
Employee motivation is crucial in starting change because evidence indicates that people and organizations seek to preserve the status quo and are willing to change only when there are compelling reasons to do so.
So, what leadership type 1) transformational or 2) transactional would be the best choice to lead change efforts knowing that the success of the organization depends on its people navigating these hurdles?
A transformational leader is characterized by their ability to encourage, inspire, and motivate employees to innovate products or technologies and create change that will help grow and shape the future success of the company. This is accomplished by setting an example at the executive level through a strong culture, employee ownership and autonomy in the workplace.
Transformational leaders inspire and motivate their workforce without micromanaging and they give employees space to take authority over decisions in their assigned roles.
Transactional leadership, also known as managerial leadership, focuses on the present and keeps the organization running smoothly and efficiently. They are also good at planning, budgeting and analyzing. These leaders focus on specific tasks, lay out rules, issue directives and use rewards and punishment to motivate followers.
Transactional leaders are good at maintaining stability, setting expectations and providing feedback regarding follower performance, but they do not act as catalysts for growth and change.
In today’s business world, both of these leadership styles are needed. However, during organizational changes and shifts, it’s the transformational leader that will aid the follower in reaching their full potential, boost morale, minimize employee stress and anxiety, build trust and heighten employee engagement.
While the transactional leader has shown to be useful, it is considered insufficient in many cases and may prevent both leader and follower from achieving their full potential.
So what is the process used to become a thriving transformational leader?
Create and inspire the vision of the future
Motivate your team to buy into and deliver on that new vision
Manage the delivery of that vision
Build a stronger, trust-based relationship with your team
If you’re ready to take the steps to become a thriving transformational leader, let’s talk!