Leadership is an art that requires you to understand yourself and others. The concept of leadership style is crucial in evaluating your strengths and weaknesses, and provides a roadmap for understanding different types of leaders. As James MacGregor so perfectly put it, “Management is Transactional, and Leadership is Transformational.”
Let’s dive into this topic by starting with a famous quote, “Nearly all men can handle adversity, but if you want to test a man’s character, give him power.” – Abraham Lincoln.
In this article, we’ll explore the two main leadership styles: Transactional and Transformational, and help you understand your own leadership style.
Transactional Leadership
Transactional leadership focuses on the relationship between the leader and the followers. In this style, rewards and punishments are contingent upon the performance of the followers. The leader views the relationship as an exchange – you give me something, and I’ll give you something in return. When followers perform well, they receive rewards, and when they perform poorly, they receive punishments. Rules, procedures, and standards are critical components of Transactional leadership.
This style is often used by management and is great for creating checks and balances and improving processes and structures. The focus is on basic management processes such as short-term planning, also known as the Planning, Organizing, Leading, and Control (POLC) framework. The leader motivates and controls the employees through self-interest, and the employees’ goal is to obey the leader’s instructions. The power of transactional leaders comes from their formal authority and responsibility in the organization.
Behaviors of Transactional Leaders:
- Set goals and specific directions for employees
- Give employees feedback on their performance
- Work with rules and processes to increase efficiency
- Establish standardized practices for the entire company
- Respond to deviations and correct actions to meet objectives
Characteristics of Transactional Leadership:
- Lack of flexibility
- Focus on short-term goals
- Focus on structures and policies
- Thrives with rules and processes
It’s important to note that Transactional leaders may not be the best fit for organizations that value creativity and innovative ideas.
Advantages of Transactional Leadership:
- Quickly reaches goals
- Everyone in the company knows their goals
- Everyone uses the same processes
- Rewards motivate employees
Disadvantages of Transactional Leadership:
- Employees can feel demotivated due to a lack of personal connection
- No room for creative or innovative ideas
- Can create a negative environment if the focus is solely on rewards and punishments
Transformational Leadership
Transformational leadership focuses on the beliefs, needs, and values of the followers. The leader inspires and motivates the employees by appealing to their emotions, values, and aspirations. The leader creates a vision and helps the employees see how they can contribute to it. The focus is on personal growth, development, and change.
Transformational leaders create an environment that fosters creativity, innovation, and growth. The power of transformational leaders comes from their ability to inspire and motivate the employees.
Behaviors of Transformational Leaders:
- Create a vision and help employees see how they can contribute
- Foster creativity, innovation, and growth
- Focus on personal growth and development
- Build a personal connection with employees
- Lead by example and inspire employees to be their best
Characteristics of Transformational Leadership:
- Focus on long-term goals
- Creativity and innovative ideas are valued
- Personal connection with employees
- Emphasizes personal growth and development
Advantages of Transformational Leadership:
Employees are motivated to perform better and achieve more under transformational leaders. Transformational leaders inspire and motivate their followers to not only meet but exceed their own expectations and goals. They create a positive work environment that fosters creativity, innovation, and growth. This results in increased job satisfaction, employee engagement, and overall productivity. Furthermore, transformational leaders help to develop the leadership skills of their followers, thereby promoting a culture of leadership throughout the organization.
This can lead to a more empowered workforce, where employees feel confident in their ability to lead and contribute to the organization’s success. Additionally, transformational leadership has been shown to increase job satisfaction, motivation, and engagement among employees, which can result in improved performance, productivity, and overall organizational success. The strong relationships and shared vision established by transformational leaders can also help to foster a sense of community and commitment among employees, leading to increased loyalty and reduced turnover.
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