Thoughts on the key differences between Transactional and Transformational Leadership

Social scientists tell us that contemporary leadership behaviors can be described in two broad categories: either transactional behaviors or transformational behaviors. Transactional leaders tend to emphasize getting things done to meet business needs. They are most concerned with the financial bottom line. The rewards transactional leaders give are contingent on getting what they want from their followers. "You provide me with the work my way and I will reward you." Or, "If you vote for me, I will provide you with certain favors." The classic characterization of this is management by objectives.

Transformational leaders, on the other hand, appeal to higher-order needs and attempt to engage the full person. Stephen Covey¹ describes the higher-order needs, to which such leaders appeal, as the four basic human needs: to live, to love, to learn, and to leave a legacy. Or put another way, we all have physical, social, mental, and spiritual needs and when any of these are unmet, our quality of life is reduced. Transformational leaders will try to satisfy as many of these human needs as possible.

Transformational leaders are able to change themselves and in doing so, they also transform their followers, seeking to empower and elevate them through coaching and mentoring. Transformational leaders tend to focus more on the humanity bottom line. Some of their characteristics include²: a clear sense of purpose, persistence, self-knowledge, a perpetual desire for learning, love of work, ability to attract others, emotional maturity, risk taking, unwillingness to believe in failure, and sense of public need.

A fairly contemporary trend in many organizations, transformational leadership came onto the scene in most instances in just the last two decades. Transactional forms of leadership, on the other hand, date back centuries and more.