Transactional or transformative: mix it up to lead

So what if an elected world leader is incessantly described as ‘transactional’ – aren’t we all at the end of the day?  A transactional style is based on a quid pro quo logic, or a ‘this for that’ mentality, where one side wins and the other loses. It means no time is ‘wasted’ finding an elusive ‘win-win’ outcome.

Business and personal relationships (including parenting!) often operate transactionally because it gets things done. Providing extrinsic rewards tied to clear goals works; you can ask any parent using ‘screentime’ as leverage for getting chores or homework done. But is a ‘this for that’ exchange the only way to motivate behaviour?

Leadership

In a seminal work titled ‘Leadership’, James MacGregor Burns explores the concepts of transactional leadership and its alternative, transformational leadership.

While transactional leadership focuses on bargaining, short-term goals and rewards for performance, transformational leadership seeks to inspire and motivate followers by establishing a strong vision, encouraging personal development and promoting a sense of collective purpose. Transformational leaders are often characterised by charisma, intellectual stimulation and consideration for their followers as individuals.

But is there still an argument for transformative leadership in a hyper-competitive world? Yes, it seems there is. Successful business leaders can be both transactional and transformational. Research suggests that a balance between the two styles is often most effective, depending on the situation.

It’s in the communication

Leaders adopt distinct communication styles reflecting their underlying motivations and goals. While one focuses on a system of exchanges, the other is centred on inspiration and long-term vision.

Transformational leaders have an ‘inspirational’ or ‘selling’ communication style. They articulate a compelling vision and empower their team members to take ownership and contribute to a shared purpose. Their communication is collaborative and encourages open dialogue, creative thinking and problem-solving. They show a genuine interest in the personal growth and development of their followers, building trust and a sense of shared identity.

A wide range of stakeholders are interacted with, including followers at all levels, other leaders and even external parties. The goal is to build a collaborative and cohesive culture. Transformative leaders are concerned with the motivation, morals and morale of their followers, aiming to elevate them to a collective purpose.

Transformational communication builds strong, long-term relationships and inspires loyalty and commitment. By encouraging followers to go beyond their self-interest for the good of the organisation, transformative communication can lead to higher productivity, job satisfaction and a more positive work culture. It is particularly effective in environments that require innovation, adaptability and change.

  But transactional communication still has its place, particularly when efficiency, clarity and stability are a priority. It excels in crisis management or in organisations with a high degree of routine tasks and clear regulations, like the military and manufacturing. The clear expectations and direct link between performance and reward can lead to quick results and a high degree of accountability.

Is your communication style exclusively transactional or transformative? Give me a call if you need help to mix it up.