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The Difference Between Transactional and Transformational Leadership

Woman pointing to white board leading a meeting

Leadership takes many forms. No two leaders look exactly alike, and yet, radically different styles can produce equally impressive results.

While a wide variety of qualities set modern leaders apart, most ultimately fall under one of two main categories: transactional and transformational. Identified in James MacGregor Burns’s book entitled Leadership, these influential styles were initially regarded as mutually exclusive. Today, however, leaders are believed to exist on a spectrum. Hence, the importance of understanding their similarities and differences.

Aspiring leaders should be capable of identifying both concepts and how they can be integrated to produce the desired result. This understanding is vital to success while obtaining a Doctor of Education in Organizational Leadership—and in future professional pursuits.

Transactional Leadership

Strict by nature, transactional leadership builds on a dedicated structure in which specific protocols are closely adhered to in hopes of maintaining a high degree of control.

Traditionally, transactional leadership has dominated in both the corporate world and among government agencies. Increasingly, however, organizations are easing up on this approach.

What Defines a Transactional Leader?

Transactional leaders understand the importance of hierarchy and responsibility within the organization they serve and take comfort in knowing that every person holds a clear role. Typically possessing a strong personality, this individual is capable of making difficult decisions at a moment’s notice and drawing detailed workflows to help execute these complicated plans.

While control is typically thought of as a crucial element in transactional leadership, this type of leader is actually content to let processes play out with minimal interference—but only as long as everything goes as planned. If negative outcomes arise, however, transactional leaders are more likely to step in to restore order.

While transactional leadership is sometimes decried in today’s increasingly cooperation-oriented workforce, it can prove beneficial in many situations. This approach produces the best results in urgent settings or situations—especially if innovation is not necessary. Taken too far, however, it can produce a stagnant workforce.

Who Or What Exemplifies Transactional Leadership?

The concept of transactional leadership appears most consistently in the military, where each service member holds a clear title and specific responsibilities. The consequences for stepping out of bounds can be harsh. This extensive control, although seemingly oppressive to outsiders, allows for more effective management in crisis situations, when units must spring into action with little notice.

While their approach may not be purely transactional, these leaders are known for their adherence to strict processes and their strong desire for control:

  • Steve Jobs—As the visionary behind Apple’s most influential products and concepts, Jobs is said to have ruled with an iron fist. Still, there’s no denying his results. His desire for control remains evident in the very structure of top Apple products, which are designed to operate within a tightly bound framework.
  • Bill Belichick—Arguably the NFL’s most successful coach, Belichick bases his style on Sun Tzu’s The Art of War. His strict, top-down approach has produced numerous Lombardi trophies.

Transformational Leadership

Transactional leaders may be determined to maintain the status quo, but their transformational counterparts are eager to shake it up. This leadership style emphasizes innovation built on voluntary effort and a clear sense of trust.

Rather than relying on a system of extrinsic rewards, transformational leadership draws on the value of true passion. It rests on the assumption that team members will produce the best results when they feel genuinely motivated by broad concepts or philosophies. The leader regards his or her role as one of inspiration, not enforcement.

What Defines a Transformational Leader?

As their name implies, transformational leaders seek change. They do not, however, demand to direct said changes on their own. Instead, they desire constant input from stakeholders at all levels. They delegate instead of demand.

To succeed, transformational leaders must build the strong sense of motivation needed to ensure that goals can be accomplished without relying on rewards or punishments. This can prove surprisingly challenging.

 Often, transactional styles are easier to implement on a short-term basis, as rules and rewards can produce quick results. In the long-run, however, many organizations benefit most from implementing a culture of innovation that calls for inspired contributions at all levels.

 Who or What Exemplifies Transformational Leadership?

While transactional leadership continues to dominate in the corporate world, large organizations increasingly include elements of the transformational approach. This method is also common among small businesses and nonprofits where employees are more likely to feel that they have a real stake in their organizations’ pursuits.

Specific examples of transformational leaders include:

  • Bill Gates—Although several elements of transactional leadership can be seen in Gates’ unique approach, it is always evident that he seeks to inspire his employees through the power of intellectual stimulation. Through Microsoft and his foundation, he has consistently sought input from a variety of individuals.
  • John Gagliardi—Hall of fame college football coach, Gagliardi refused to yell at or intimidate players. His teams excelled without participating in grueling training camps. Perhaps most notably, he let the quarterback call the plays, revealing a sense of trust rarely seen in football.

Both transactional and transformational leadership styles can prove valuable. While intellectual curiosity and trusting relationships produce a harmonious workplace and greater possibilities for innovation, rules and rewards can also provide powerful motivation. Ultimately, the most successful leaders will discover and fully utilize the unique blend of qualities that best suits their purposes.

Want to expand your leadership skills and influence the culture within your organization? Consider our Doctor of Education in Organizational Leadership program. Wth tracks in Positive Leadership, Conflict Management, Learning with Emerging Technologies, and Higher Education, you will find a focus that fits your leadership style. For more information on how ACU Online can help you pursue your career goals, contact us at 855-219-7300 or acu.edu/online.

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