Leadership is a tricky balance of exercising empathy and fairness while still trying to make sure everyone is at the top of their game. You need to be able to determine how you want to lead your staff and what works best for them. It’s never a good idea to force a leadership style on your team and expect them to adjust, you have to be cognisant and attentive to how your team responds to you and how you communicate.

Two kinds of prominent leadership styles that have withstood the test of time are transformational and transactional leadership. Both have their pros and cons and suit different kinds of objectives–but which is more effective overall?

These two types of leadership styles are polar opposites and will work differently. It’s up to you to figure out what works best in order to help build a successful, long-lasting team and business.

What is transformational leadership?

Transformational leadership operates on the level of inspiration and motivation. Transformational leaders are generally enthusiastic, charismatic and encouraging. These types of leaders are able to move their employees by sharing their visions and strategies for the business. Employees often see these leaders as role models and feel inclined to follow in their footsteps and want to support them in their bid for success.

This type of leadership is very much personality-driven. You need people skills and excellent communication in order to be a transformational leader. As the name suggests, you transform how your employees see their work as not just something they have to accomplish, but something that ultimately contributes to everyone’s success.

Transformational leaders are influential and are able to stimulate their staff intellectually by creating genuine relationships with them. They’re also skilled at resolving conflict and getting everyone to collaborate because they can masterfully guide their staff towards a common purpose and goal. 

Leaders like Steve Jobs are considered transformational, in that he believed so much in his ideals and was passionate in his pursuit. His drive for success rested on his simple ideas of simplicity and accessibility for all, even those who weren’t so tech-savvy. 

A transformational leader’s team deeply cares about business goals and how to help it succeed because they put a lot of stock into what their leader believes in. This team is highly motivated and is driven by their own passion for their work. They hold their business leader in high regard, respect them and their ideas and admire them for their work. 

Ultimately, transformational leaders are charismatic leaders who can hold the attention of their staff and make everyone feel energised towards their business’ goals. 

What is transactional leadership?

Transactional leadership focuses more on a well-defined chain of command and uses a punishment and rewards system. This leadership style believes that people feel incentivised and motivated by rewards and want to avoid punishment. 

It’s transactional because you get what you give–good quality work is met with praise and sometimes even recompense while poor quality work means you aren’t given recognition and are instead reprimanded. It’s an exchange. 

This type of leadership is very particular and watchful over the performance of every employee. Strict guidelines are made and expected to be met in order to better qualify work. Standards and measures are upheld in order to double check if something is up to par. Expectation-setting is important, as well as constant feedback. 

Like athletic teams, staff is reprimanded or given a punishment if they make errors or are unsuccessful with their work. Athletes are expected to meet a certain standard and are praised for good plays and wins.

A transactional leader’s team is attentive to detail and wants to prove their worth and do their best by trying to turn in quality work. No one likes being reprimanded, so they’ll definitely be on their toes and do their best to avoid it and, instead, clinch rewards and incentives. They’re driven and motivated by positive feedback and reinforcement and will perform optimally as long as something benefits them.

Bill Gates is a great example of transactional leadership because of his high standards for his staff. He always expects the best out of problem solving and solutions, upping the quality of his company significantly. 

Which leadership style is better for you? 

In order to mobilise and energise your staff to help you reach your goals, you need to figure out which leadership style suits you and your organisation best. It’s also possible to take pieces of each style and apply them to your own unique method to tailor how you lead and how your staff responds. You don’t want to intimidate your employees because you’re using a style that doesn’t fit, you want to make sure you’re doing your best as a leader, and that comes with learning how to best communicate with and lead them.

Your leadership style should also depend on the kind of work your staff is carrying out. Staff under transformational leadership are more likely to take on more complex, creative challenges and responsibilities that require further conceptualising because they’re driven by ideals while those under transactional leaders are probably more suited to simple but repetitive problem solving that is achievable and easily measured because then quality can be easily maintained and observed. 

One big difference between the two is that some would say that transformational leadership is very forward-looking and focused on change within the business while transactional leadership is all about keeping the balance and maintaining the status quo. So, the question becomes whether or not you want a team that also responds to your beliefs or to how they can keep things steady and rhythmic. 

Transformational leadership and transactional leadership are opposites. One emphasises idea-building and collaboration while the other focuses on getting routine problems and obstacles solved and set aside. A supervisor trying to ensure everyone gets their quota in at the end of the day is more likely to lean on a transactional style as they’re more concerned with good quality work being turned in on time. More creative industries benefit more from transformational leaders because they’re being challenged to think outside the box and figure out how to continue making progress. 

Ultimately, it all boils down to what kind of work you’re asking of your employees, what motivates them best and how you relate to them. Both require degrees of charisma, energy and organisation, you just have to employ these traits in a manner that fits you and your goals. 

Leadership styles are as effective as the person trying to utilise them. If you feel charismatic enough to challenge your employees to move towards your goals with you, transformational leadership may be for you. If you feel you want to lean more towards maintaining good, measurable standards as a means of leading your employees, transactional leadership might be what helps you get things running. It’s all a matter of your comfort and how you relate to your employees.

If you want to learn more about your leadership style and how you can better adjust it to get your team energised, give us a call.