Through observations and interactions I’ve often been able to distinguish between transformational and transactional leaders. Their personalities are clearly different. Though both are focused on achieving organizational goals their approach to problem solving and building teams is distinctly varied.

Not only have I seen this in the leaders themselves, their teams clearly reflect the style of leadership they are operating under. While a transactional leader’s team focuses on daily and weekly tasks, a transformational leader’s team is more concerned about the direction the team and the organization are headed towards.

What Sets Transformational and Transactional leaders Apart

The two vary in ways similar to micro-managers and macro-managers. A transactional leader often employs a reactive approach to solving problems. They’ll motivate their team by rewarding them with nearsighted incentives based on their performance.

Transformational leaders, in contrast, have their sights on where the organization should be. They’ll rely on their charismatic personality to focus on developing values that are key to the organization’s DNA. Their approach is to stimulate performance through proactive means that build towards operational excellence.

More and more, transformational leaders set themselves apart by employing the following leadership skills:

• Inspirational Motivation
• Influence
• Consideration
• Strategic Vision

Those who use the skills above, have sights on the organization’s bigger vision and lead their teams to believe in it as well. This involves taking risks and developing a smart team around you. A team that is focused and geared toward future achievements with the company’s values in its core.

When do you need them?

While both leadership styles are effective, you’ll often find that their need is dependent on the stage your organization is in.

An organization in its infancy will rely heavily on transactional leaders to get the job done. Your transactional leader will flourish at a stage where your company is chasing deadlines and working relentlessly to position itself against your industry’s competitors. Their traits are ideal to plan and execute the task and challenges at hand, i.e. firefight. Transactional leaders are the key driving force for your organization to lay its foundation, establish procedures and ensure operations are executed.

As your organization matures the need for transactional leaders will thin out. Over time, your focus on developing a culture will transition to changing the culture to be equipped for the future. This is when you’ll need to mentor your key resources to become transformational leaders. Forward-thinking role models who challenge the status quo. Leaders who aren’t afraid to alter the norms and set new, bold goals for their teams.

If you ask me there can never really be a clear winner between transformational and transactional leaders. Both are important leaders in their own right. The key for you, however, is to assure you create the right mix of each for your organization to thrive and sustain itself.

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