I can pretty much guarantee that anyone reading this article has either studied or experienced the difference between transformational and transactional leadership.
Transformational leadership focuses on psychological and intrinsic motivation and it fosters deep relationships between leaders and employees. By contrast, transactional leadership leverages formal authority and puts a heavy emphasis on extrinsic and behavioral aspects to incent employees to do what you want them to do.
At the risk of oversimplification, transactional leadership is telling people what you want them to do, while transformational leadership is getting people to want to do what you want them to do.
Transformative leadership provides better results
A transformational style of leading sounds better, right? Correct, because over decades of research, the transformational style has generally been found to deliver better employee performance, lower turnover, higher engagement, and much more.
But notwithstanding how great it sounds, being a transformational type of leader is hard, and it runs counter to the way most leaders are trained.
Statistics prove this. Of the more than 10,000 leaders have taken the test, Do You Prefer Transformational Or Transactional Leadership?, about two-thirds of leaders prefer transactional leadership.
The test assesses leaders on the key dimensions it takes to be considered a transformational type of leader. These dimensions include challenging employees to grow and achieve beyond their own expectations; inspiring employees that the work they do makes a difference in people’s lives; instilling confidence that they can solve any problem or challenge; helping employees grow and develop their potential; and ensuring that they feel pride to be associated with the leader.
So let’s look at why it can be so tough to adopt a transformational style of leadership.
A leader who aspires to be transformational wouldn’t, for example, set easily achievable goals; they’d create goals for employees that challenged them to grow and extend their abilities.
But in the real world, how many leaders do you know that require employees to have to learn something new in order to achieve their goals? Or that employees’ goals are just hard enough to nudge them 20% outside of their comfort zone?
This is the problem. In the study, Are SMART Goals Dumb?, we discovered that only 43% of people set difficult or audacious goals, even though people who set difficult goals are 34% more likely to love their jobs. So clearly, when it comes to goal setting, leaders aren’t inclined (or encouraged), to be especially transformational.
Leaders aren’t taught to be transformational
As well as being bad at goal setting, leaders are often not taught how togrow and develop employees’ full potential, nor how to help them achieve their career goals.
In the study, The State Of Leadership Development, only 20% of employees said their leader always takes an active role in helping them to grow and develop their full potential. By contrast, 29% of employees said their leader never or rarely takes an active role in helping them grow.
HRDs – train your leaders
When leading in a transactional style, managers and executives can focus solely on ensuring employees hit their productivity targets, follow prescribed protocols, and perform their job requirements. But the transformational approach requires caring far more deeply about each employee, fostering their growth and development, infusing them with confidence, and challenging them to expand their abilities.
Training leaders to lead in a more transformational way requires less of an emphasis on short-term results and managing performance targets. Instead it require more of a focus on employees’ growth, development, motivation, and other ‘soft’ issues.
This can be a tough sell for some companies. No doubt it helps explain why (despite all the research to the contrary), transformational leadership remains more common in theory than in practice.