Transactional vs. Transformational

Transactional Leadership

Transactional leadership concerns the maintenance of normal workflow. The model does not encourage “thinking outside the box”, but can be described more as "keeping the ship afloat." Transactional leaders rely on authoritative management, using punishments and rewards to motivate subordinates to perform; thus the term "transactional". Transactional leaders are essentially exchanging incentives and disciplinary actions for performance. The model is based on give and take.

Transformational Leadership

Transformational leadership stimulates “thinking outside the box”. It surpasses the day-to-day management and is future-oriented. Transformational leaders strategically guide their department, organization, or company to success through team building. They motivate, collaborate, and inspire subordinates at all levels. Transformational leaders grow followers into leaders, while at the same time developing their own leadership skills. They consistently look for growth opportunities not just for themselves, but more so for their subordinates.

Tony

Remember Tony from my Situational Leadership Theory post? I will use him again here to portray transformational leadership in a real-life example. Tony is the definition of “thinking outside the box”. Sure there are some hectic days where “keeping the ship afloat” and making it through the day in one piece is all we hope for, but Tony really tries to take him team to the next level whenever he has the opportunity to. Doing things just because it’s the way its been done in the past is dangerous. Tony is constantly motivating his team to reach new heights. He is truly an inspiration. Tony has made decisions involving me where he admits that even though it may not be in his best interest, he still followed through with it because it benefited me and could potentially be an opportunity for growth. This is true transformational leadership.