Transactional or Transformational Leadership
Change has never been popular
“It should be borne in mind that there is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through than initiating changes in a state’s constitution. The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new.”
Nicolo Machiavelli 1469-1527
Much has been written about the subject of leadership. Leadership is critical to the achievement of high performance, no matter what your business or area of responsibility. It is also essential in helping others aspire to and attain high levels of performance for themselves and the organization. Leadership has not stood still in the last decade and is continually being crafted to ensure that modern theories and practice are meeting the new demands of the marketplace (currently there are 80 models to choose from but of these can be collated under 5 or 6 headings or approaches).
Modern leadership has its roots back in the works of such people as James McGregor Burns. In his book Leadership he introduces the notion of transactional and transformational leadership which have remained one of the most popular leadership models.
Transactional leadership is built on reciprocity, the idea that the relationship between leader and their followers develops from the exchange of some reward, such as performance ratings, pay, recognition, and praise. It involves leaders clarifying goals and objectives, communicating to organize tasks and activities with the co-operation of their employees to ensure that wider organizational goals are met. Such a relationship depends on hierarchy and the ability to work through this mode of exchange. It requires leadership skills such as the ability to obtain results, to control through structures and processes, to solve problems, to plan and organize, and work within the structures and boundaries of the organization.
Transformational leadership, on the other hand, is concerned with engaging the hearts and minds of others. It works to help all parties achieve greater motivation, satisfaction and a greater sense of achievement. It requires trust, concern and facilitation rather than direct control. The skills required are concerned with establishing a long-term vision, empowering people to control themselves, coaching, and developing others and challenging the culture to change. In transformational leadership, the power of the leader comes from creating understanding and trust. In contrast, in transactional leadership power is based much more on the notion of hierarchy and position.
While transformational leadership is popular, creating a high performance culture in your organization requires elements of transactional leadership to ensure a clear focus on the achievement and measurement of results. The secret to good leadership then, lies in your ability in combining the two, so that targets, results and procedures are delivered, developed and shared.
How does Transactional Leadership Differ from Transformational?
While most texts on leadership focus on a conceptual model of leadership not many actually describe what behaviours you might observe in a manager displaying one type or another (visit our values page). William James describes them as learning about rather than learning how to lead. There are a number of British writers who have written on this subject.
Research has shown that the essential behavioural difference between Transactional and Transformational leaders is in their interactions with their staff and the former uses a higher proportion of closed and leading questions in their interactions with their staff and the later uses more open and reflective questions. In order to increase the amount of transformational leaders in your organization start by training them to use open, probing and reflective questions.
James MacGregor Burns (1978) first introduced the concepts of transformational leadership in his descriptive research on political leaders, but this term is now used in organizational psychology as well. According to Burns, transformational leadership is a process in which “leaders and followers help each other to advance to a higher level of morale and motivation”. Burns related to the difficulty in differentiation between management and leadership and claimed that the differences are in characteristics and behaviours. He established two concepts: “transformational leadership” and “transactional leadership”. According to Burns, the transformational approach creates significant change in the life of people and organizations. It redesigns perceptions and values, and changes expectations and aspirations of employees. Unlike in the transactional approach, it is not based on a “give and take” relationship, but on the leader’s personality, traits and ability to make a change through example, articulation of an energizing vision and challenging goals. Transformational leaders are idealized in the sense that they are a moral exemplar of working towards the benefit of the team, organization and/or community.
James Macgregor Burns
Leadership scholar and Pulitzer-prize winning author James MacGregor Burns talks to Jepson Professor Al Goethals about his thoughts on, and how he first became interested in, studying Leadership.
His key innovation in leadership theory was shifting away from studying the traits of great men and transactional management to focus on the interaction of leaders and led as collaborators working toward mutual benefit. He is best known for contributions to the Transformational, Aspirational and Visionary schools of leadership theory.
James Macgregor Burns states, that we need to step back from our over-emphasis on power and see it and leadership not as things but as relationships.
“We need to see power in a context of human motives and physical constraints.”
Another major theme is that leadership is a relationship of power for a specific purpose that is consistent, or eventually consistent, with the motives, needs, and values of both the leader and the led.
Another researcher, Bernard M. Bass (1985), extended the work of Burns (1978) by explaining the psychological mechanisms that underlie transforming and transactional leadership; Bass also used the term “transformational” instead of “transforming.” Bass added to the initial concepts of Burns (1978) to help explain how transformational leadership could be measured, as well as how it impacts follower motivation and performance.
His full range of leadership introduces four elements of transformational leadership:
- Individualized Consideration – the degree to which the leader attends to each follower’s needs, acts as a mentor or coach to the follower and listens to the follower’s concerns and needs. The leader gives empathy and support, keeps communication open and places challenges before the followers. This also encompasses the need for respect and celebrates the individual contribution that each follower can make to the team. The followers have a will and aspirations for self development and have intrinsic motivation for their tasks.
- Intellectual Stimulation – the degree to which the leader challenges assumptions, takes risks and solicits followers’ ideas. Leaders with this style stimulate and encourage creativity in their followers. They nurture and develop people who think independently. For such a leader, learning is a value and unexpected situations are seen as opportunities to learn. The followers ask questions, think deeply about things and figure out better ways to execute their tasks.
- Inspirational Motivation – the degree to which the leader articulates a vision that is appealing and inspiring to followers. Leaders with inspirational motivation challenge followers with high standards, communicate optimism about future goals, and provide meaning for the task at hand. Followers need to have a strong sense of purpose if they are to be motivated to act. Purpose and meaning provide the energy that drives a group forward. The visionary aspects of leadership are supported by communication skills that make the vision understandable, precise, powerful and engaging. The followers are willing to invest more effort in their tasks, they are encouraged and optimistic about the future and believe in their abilities.
- Idealized Influence – Provides a role model for high ethical behavior, instills pride, gains respect and trust….
Page by Marshall Potts – Specialist Development Consultant. Marshall has written a number of articles on Transformational Change, Corporate Values and Leadership Development.