Transactional vs.Transformational Leadership

January 16, 2014

transformational leadership

There is a fundamental conflict in organizations: Focus on short-term, transactional numbers, or think and act for long-term transformation?

Transactional pressures include factors such as market expectations for quarterly numbers growth, the use of measures as the foundation for bonuses and other personal compensation, and the belief that “what gets measured gets done.”

These transactional pressures tend to dominate, often at the expense of an organization’s long-term health. Constant change in markets, technologies, worker expectations and values all drive the need for more transformational thinking. Organizations that stand still risk getting left behind.

Focusing intensely on being a great transactional leader impairs the ability to be transformational. Being transactional narrows attention to a few factors and reduces the value of broader thought capabilities. Intensely transactional leaders and organizations have a particularly hard time with change because they are so narrowly focused.

In sharp contrast, being able to use transformational leadership allows people to be successful at leading change while still making good numbers.

What is transformational leadership?

Not surprisingly, most of the star performers in an organization are transformational leaders. They are purpose-driven and have a clear notion of the greater good they want to achieve and know exactly how to achieve it. They are reflective, self-directed learners even while being pressured to “get stuff done.” They use short-term metrics not as a driver of performance, but as a measure of their progress toward their purpose.

How to Become a Transformational Leader

  • Create a table that compares the attributes of transformational vs. transactional leadership
  • List the things that make you more transactional and strategies for overcoming them
  • Schedule five minutes a day for reflection on being a leader
  • Create metrics that you believe reflect transformational leadership

Transformational leaders consistently outperform transactional leaders on transactional metrics—and they do a lot more good for the organization over the long haul.

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About The Author

William Seidman is the CEO of Cerebyte, Inc., a company focusing on creating high performing organizational cultures. He has worked as a manager or consultant with many large and small organizations including Hewlett-Packard, Jack in the Box, Intel, Tektronix, CVS Pharmacies, and Sears. As a recognized thought leader and expert on leadership in high-performing organizations, he contributes an in-depth understanding of the processes required to discover and use expert wisdom to create extraordinary organizational performance. Dr. Seidman earned his doctorate at Stanford University. He is co-founder and chief executive officer of Cerebyte, Inc., co-author of Strategy to Action in Ten Days and co-author (with Rick Grbavac) of The Star Factor, published by AMACOM in the Fall of 2013. The Star Factor presents Affirmative Leadership, a methodology for discovering what your top performers do differently - and inspiring a new level of greatness in all. Dr. Seidman lives in Lake Oswego, Oregon with his wife. He enjoys traveling, golf and spending time with his three kids.

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    […] In sharp contrast, being able to use transformational leadership allows people to be successful at leading change while still making good numbers. (Transactional vs.Transformational Leadership.  […]

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