Transformational Leadership Vs. Transactional Leadership

What is the difference between transformational leadership and transactional leadership? Well, in a nutshell, transactional leadership is telling people what you want them to do. Transformational leadership is inspiring people to want to do the things you want them to do. Hi, I'm Mark Murphy, CEO of Leadership IQ, and I want to take just a minute here and break down some of the differences between transformational leadership and transactional leadership. So transformational leadership is essentially comprised of, uh, really four major things: inspirational motivation, also known as aspiration; individualized consideration, also known as inspiration; intellectual stimulation, also known as just stimulation; and idealized influence, also known as idealization. So inspirational motivation is essentially giving people a sense that You know what? The work you're doing actually makes a difference. This is purposeful work. The stuff you're doing is inspiring and it's important. Individualized consideration is essentially the leader knows what makes their people tick. So I feel my work is valued by my leader. The leader removes the roadblocks to my success. They, they understand who I am, what makes me tick, and how I'm going to work effectively. Interestingly, that also then creates a kind of confidence on the part of the employee that they can solve really pretty much any problem or challenge. Intellectual stimulation, or stimulation, is really when employees are challenged to grow and achieve beyond their own expectations. I can reach for something bigger and better. I thought I was here, but really now I'm here. And idealized influence, or idealization, is essentially employees are proud to be associated with a leader. They're proud to feel part of the team. Now, transactional leadership, by contrast, is really about definition, diagnosis, development, and reinforcement. So definition is basically, I'm going to tell you in clear, crystal clear, no uncertain terms what you need to do. What are the things you need to do, and here's the level at which you need to do them to achieve expectations. Diagnosis— well, I'm going to assess whether or not your performance is where it should be, whether or not you're doing those things effectively. Development— well, I'm going to help you grow by giving you some feedback, either good feedback or constructive feedback about the thing you did, whether that was good, bad, or otherwise. And then reinforcement— I'm going to hold people accountable. Now, the interesting thing is that most of the time when people talk about transformational leadership versus transactional leadership, transactional leadership is is described in pretty pejorative terms, right? It's described as a negative. This is, this is not the way you want to lead. You really want to lead in a transformational way, and that is true. You will have more inspired, engaged, high-achieving people with transformational leadership, with aspiration, inspiration, stimulation, and idealization. Yes. However, we should not forget that transactional leadership does have a role to play. Now, transactional leadership is a problem if we never grow beyond that, but if you don't explain to people what they need to do, if you're not giving them feedback and assessing whether their performance is where it should be, if you're not holding people accountable, well then the transformational leadership part of this actually gets kind of tricky because you can have people that love being around you and feel inspired and stimulated and all the rest, but at the end of the day, if they don't know what it is they're supposed to do to achieve success, which is what the transactional leadership part of the equation covers, well then we have some difficulty, right? So that in a nutshell. I, I want to be clear that when we think about transformational leadership versus transactional leadership, it really isn't an either-or. We're going to have to do pieces of transactional leadership But then to get to that next level, to really be more than just a caretaker, to be more than just a 'here's where we are and we can maintain this level of performance every day,' to get to that next level, to really kick things up and get people to go beyond what we thought was possible, that's where we're going to need the transformational leadership. But let's not give transactional leadership a completely bad name. There, there are pieces of that that are actually useful.