Transformational Leadership vs Transactional Leadership
There are two basic types or styles of leadership: transactional and transformational leadership. Transactional leaders look to exert effort from followers based on rewards and punishments. Transformational leaders tap into something far more effective. They don't promise rewards, they build movements. And the people who follow, follow because they see a future worth fighting for.
So, which leader are you?
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Which type of leader are you, and why does it matter all that much?
I was in a conversation a few days with two executives from a compensation and benefits company, and I get it, right, pay matters. We need to reward people who work hard with the compensation that they deserve, but they asked me a lot of questions that really sort of signaled a mentality that they were perhaps not in the right mind when it came to "how do you effectively lead and motivate a team?"
How do you, especially when you're trying to do something that seems impossible, how do you actually rally the troops, motivate and unite your team?
You see almost 50 years ago we started to figure out that there were really two types of leaders.
You know, because you probably saw my video on personality testing that I actually hate the term types. So let's not use the term types, but let's say there are two sort of patterns of behavior or two underlying beliefs about how to lead followers, and most leaders, most managers, most senior executives, most entrepreneurs, most executive directors of nonprofits, lead towards one of these patterns of behavior, or another, and as I said this idea started almost 50 years ago with a book called "Leadership" by James MacGregor Burns.
Burns was a political scientist and a failed politician, actually. He had written previous works as a historian, as well as a political science, really a jack of all trades.
He had posited that there were two different ways that leaders attained followers. Specifically looking at presidential candidates, and other politicians, there were two different ways that people built the movement.
The first type of leader would talk about what they could get followers, if they decided to join their movement. They would talk about the money involved, they would talk about the rewards that you would get for being a part of the movement, they would talk about how your particular group is being under-represented and we can get you more benefits.
Burns didn't come out and call them this, but later people building off this theory, would call them transactional leaders. They were basically saying, if you do this, I will do this.
In politician speak, if you vote for me, I will bring you these things.
In terms of corporate leaders, or leaders of movements, it was if you follow me, you will get this reward. The problem in most organizations, of course, is that, if you're going to be a transactional leader, then leading just by bribes doesn't always work. Sometimes you have to lead by punishment, as well. Sometimes you have to say, if you don't do these certain things, then I'm going to extract this punishment or withhold this reward. You can't just use diamonds, sometimes you gotta use clubs.
Burns would take that category of leader, and contrast that with a leader who really sought to bring out the best in their people, who really encouraged them to see a picture of a better world that they could build together. And yes, there would be some benefit to that, but the goal of this style of leadership wasn't to bribe people into compliance, or punish them into compliance. It was to capture their hearts, and their minds.
Now, later historians would call these people transformational leaders, and you can probably already sense where this is going. A lot of research since Burns first wrote his book has looked to transformational leadership, transformational leadership
theory, as a far better way, not only to get action or motivation out of employees, but a far more ethical way to deal with people, as well.
Transformational leaders get more from their followers and lead an overall more effective organization.
And transactional leaders have a much harder time acquiring the right talent, motivating that talent, retaining that talent. They have a much harder time actually leading the organization.
In fact, we might even go so far as to say this about transactional leaders.
When you compare them to transformational leaders, they really just end up looking like Jokers.