Transactional leadership occurs when there is “A bargain to aid the individual interests of persons or groups going their separate ways.” In other words, transactional leadership occurs when leaders and followers combine to meet their respective, independent goals.

On the other hand, transforming leadership is, “The reciprocal process of mobilizing, by persons with certain motives and values, various economic, political and other resources, in a context of competition and conflict, in order to realize goals independently or mutually held by both leaders and followers.” This is a much more formal definition that needs some unpicking. Key words or phrases – reciprocal process; mobilizing; persons; certain; motives and values; resources; mutually held – however, hint at the gist: leaders and followers have common goals.  Thus the result of transforming leadership is, “A relationship of mutual stimulation and elevation that converts followers into leaders and may convert leaders into moral agents.”  

Thus, broadly speaking transactional leadership entails facilitating a “bargain”, with the sense of impermanence or transience that implies, while transforming leadership entails the cementing of a “relationship” with the mutual self-commitment that signifies. You could say that all leadership is transactional but not all leadership is transforming. For my part, I would say that transactional leadership is management, while transforming leading is true leadership.

Whether you agree or not, the increasing demand for transformation or transforming change suggests that there is a greater than ever demand for transforming leadership. So, the question you need to ask yourself is, “How do I create or develop this?”

History has given us centuries of industrial conflict, rooted in a management versus worker relationship which is essentially transactional, and thus liable to break down the minute either party is dissatisfied with the bargain that prevails.  Yet to break this down you only have to find a way to make the interaction less transactional and to find a way of creating a relationship that recognises, acknowledges and addresses the mutual interdependence of both parties. You will be pleasantly surprised to learn that it may not be as difficult as you think: the ‘Every Individual Matters’ Model gives you the answer.

The model provides the catalyst that aligns the interests of all those involved in the organisation – managers and employees – and creates the alignment of shared objectives that epitomise a transforming relationship. Indeed, going back to the definition of transforming leadership, it cements a relationship “of mutual stimulation and elevation that converts followers into leaders” and thus offers you the collective, distributed leadership that will transform your organisation, its performance and – most importantly – its results.        

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If you like what you have read contact me today to discuss how my ‘Every Individual Matters’ Model could help you value your people and provide the catalyst to help you create an organic culture where everyone cares and the business becomes our business, embedding continuous improvement that engenders ‘love at work’ and transforms – and sustains – organic business performance.

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Bay Jordan

Bay is the founder and director of Zealise, and the creator of the ‘Every Individual Matters’ organizational culture model that helps transform organizational performance and bottom-line results. Bay is also the author of several books, including “Lean Organisations Need FAT People” and “The 7 Deadly Toxins of Employee Engagement” and, more recently, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped.