Distinguishing between Transactional Leadership and Transformational Leadership


Who’s who? And who does what?

We often confuse managers and leaders. If, in an ideal world, all managers should have leadership skills, can we confirm that all leaders are good managers?

The difference between an ordinary manager and a manager who demonstrates leadership lies mainly in the management style. Let’s talk about the distinction between transactional and transformational leadership.

The transactional leader focuses on tasks and results. He has to make sure things are getting done the way they should be done. He follows a plan that has to be carried out, and rewards or sanctions, depending on employee performance. He has a short-term vision and a rather directive approach. They thrive in a structured organization, with strict rules and procedures.

The transformational leader is more concerned with getting the right things done. To achieve this, they lead to create a lasting, positive change through inspiration and motivation, while getting the best out of their people. His vision is set for the mid and long term, and he encourages his team to excel being autonomous and pro-active.

It’s important to remember that one is not better than the other. A well-balanced mix of both skills is essential in any company.

As the sole decision-maker, the transactional leader is useful in times of crisis, when there is a clear problem to be solved, a well-defined objective to be achieved. In such a context, everyone knows what they have to do. Unfortunately, the potential for creativity and emotional needs are generally ignored, leading inevitably to people running out of steam.
The transformational leader uses coaching approaches. He listens attentively and uses every problem to reinforce the sense of equity and solidarity between all levels of hierarchy and all employees. He is respectful, caring and human, and knows how to motivate and rally the team around a common vision. It helps develop employees’ potential and improves team cohesion.

Benefits of transformational leadership

To achieve its objectives, a company/organization should never forget that nothing is worse than a spiral of stress that leads employees to doubt, forget their basics and throw themselves in all directions. These companies/organizations therefore need leaders who know that their mission is more than producing results, it is also to develop the talents and skills of their staff, enabling them to achieve ambitious goals more easily every year.
Transformational leadership offers a number of significant benefits for both team members and the company/organization.

1) Productivity and performance
Because team members feel respected, listened to, and encouraged, they are more committed and motivated, and thus give their best in achieving the company/organization’s objectives and vision.

2) Resilience and stability
Because team members are more motivated, they integrate better into the transformation process and adapt more easily to change. They are less likely to jump ship when challenges arise. This commitment stabilizes the team and reduces downtime and staff turnover.

3) Individual and organizational well-being
Because they are under less pressure, team members are happier at work and more motivated. As a result, they develop a sense of security, which contributes to improved self-confidence and self-esteem.

Challenges of transformational leadership

Although it has many advantages, transformational leadership also faces several challenges.

1) Not compatible with all types of business
Transactional leadership is best suited in environments where change is rare, where employees are already experienced and enjoy their work as it helps to maintain balance.

2) Dependence and idealization
Because of its charisma and ability to inspire, a kind of dependency and idealization can sometimes be created between the leader and team members.
Team members can be easily disappointed if their expectations are not met. They may also find it difficult to function if the leader is absent or leaves his/her post, which could also weaken the company/organization.

3) Patience
Implementing transformational leadership within a company/organization takes time, patience, and sustained effort.

Practicing leadership

It takes practice to learn to manage.
At Impact-Pro, we offer a few training courses that will enable you to analyze your attitude, the way you manage your energy, your communication style, the commitment you generate and the influence you have through role-playing and practical work. Visit our website to find out more.

Our training courses on the subject:

*True Shared Leadership
*Become a Manager-Coach