Leadership: Transactional versus Transformational

May 03, 2023

There is absolutely a difference between being a leader who is transactional versus one who is transformational. What's the difference you ask?

Transactional leaders tend to lead by rules opposed to relationship, they focus on compliance, supervision, task management, and may get caught up on tasks opposed to big picture.

Transformational leaders tend to lead by focusing on morale, engagement; they seek out the big picture and future ahead and how to get there without ascribing the step-by-step to do it.

Both style can be beneficial, however my preference towards a Transformational leadership style makes some uncomfortable and stressed in traditional workplaces.

I was having coffee with a colleague and shared my journey and how I ended up making my way back to the Consulting arena after 10 years. I know I was always destined to do what I am doing now in the Consulting world - sharing knowledge, helping organizations and individuals be efficient, effective and engaging - yes, be transformational.

I know this path is not for everyone. However, my energy and joy comes from witnessing the transformational work within people and organizations. Instead of telling people what to do - I like seeing what they can do. Working within the confines of certain organizations it is difficult to be transformational. Transactional leadership occurs when you come in everyday and do the same thing and deal with the same people and you really don't care anymore - its about getting the next report done. You do the work in your sleep because you understand the routine. You set goals, move goals, are overworked, too busy to refine processes, don't have time for innovation, and so on.

After having several recent conversations regarding the state of leadership in companies and organization, I realize that some are stuck in a transactional leadership role or companies are can't shake the patterns. What are signs that you are transactional or are working in a transactional environment?

Unconsciously, mediocrity is a goal.

There are times when you work and understand that things should and could be better but the desire to be better isn’t greater than the energy it tasks to get there. The sad reality is that some organizations struggle with mid-level leadership. They either lack vision or have encountered so many barriers, they stop trying. Different is not deficient. As an organizational leader, what processes are in place that make it difficult for progressive change to take root in your organization? Some processes need to be trashed, reworked, or thrown out. I asked on leader at an organization, “What is the desired outcome for this policy?” They replied, “I don’t know – it was there when I got here.” These are some of the things that keep organizations and people average. 

Technical skill is valued more than people skills.

I am sure you have said “How did they get their job?” once or twice in your career. For some reason executives believe that it is better to keep a person that is trained even if they are killing your business. "They know us." "They have been with us." Yes, they are tenured. Yes, they helped shape processes. However, the continued evolution of creativity and people development and engagement has waned. People generally don't leave organizations, they leave managers. If your goal as a leader is to tell someone "what" to do opposed to sharing the goal and asking "How do we get there?" you will typically be in the mode to tell your leaders what to do.

Business decisions or people compromise personal ethical or moral standards.

Have you ever said to yourself, “I can’t believe that just happened?” in the context of something you witnessed at work? You aren’t alone. While there are good organizations, there may not be good leaders in those organizations. Sometimes it is unknown to senior leadership that there is a “workplace culture terrorist” employed at their organization.

So how do you break away from mediocrity? I’m glad you asked. I have provided some thoughts for Individuals and Organizations.


  • Have you lost sight of your career dreams and aspirations? Stop! – pull your vision board out of the closet or look at your goals list. Average is not acceptable when you were called to be great. So what is hindering you? Even as you are faced with barriers, volunteer on a board, or audit a class to keep your skills sharpened.
  • Evaluate your ability to influence change. If you can’t influence change or those that affect change - are you sitting in the right seat? I facilitate a classes called Influential Leadership, which provides tools on influencing up and influencing peers - it's all about attitude and belief. It’s hard to consider, but there is nothing worse than working hard and not see progress. One consideration is to focus on the numbers to influence change - does your idea help the organization make money or save money.
  • Do you find ways to continue to improve yourself? If you find yourself not improving or growing - reevaluate. Most people enjoy a work challenge and feeling valued and supported. Even if you are not at the level or in the position you desire, you can still enhance your skill or follow thought leaders to gain perspective. Maybe your improvement involves eating healthier, exercising, and not stressing about what you are not empowered to change. If this is the case - work on that! Don’t ever stop developing yourself - you are getting prepared in advance of your next level move! The worst thing to do is to look back 5 years from now and realize you are in the same place that you are in right now.
Don't be so depressed because of your work situation that you forget that you have a life to live.


  • Do you have too many rules that overpower your desired organizational culture? When I think about growing up and playing outside with friends – I remembered there were a few rules that I was given to go outside unattended. I remember these three from my Granny: 1) stay on this block, 2) don’t go into anyone’s house without telling me, and 3) be in the house before dark. All of the other rules, we (the kids) made up as we played. She didn’t make up 20 other rules just in case I decided to break one. She dealt with that when (and if) it happened.  Of course, keep those that legally support you but get rid of policies that create a robotic environment! It's time to remove the barriers to organizational change. You aren't hiring the wrong people - they just keep leaving because they can't freely do the work that you hired them for.
What barriers are in place that keep your teams average or convey a sentiment of distrust?
  • Diversify your leadership mix – it can improve your bottom line. In the study, “Diversity, Social Goods Provision, and Performance in the Firm,” MIT economists found that shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent. Another article "How Diversity Can Drive Innovation", showed that employees at companies promoting two kinds of diversity, inherit (traits we are born with) and acquired (traits gained from experience) are 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market. Do you have people who would be great leaders that you can teach them the technical skill of the role? How about developing a co-mentoring partnering between a seasoned leader and a millennial leader? Do you have the right mix? Need a Diversity strategy?
Diversity in thought means that we don't think alike and that is okay, and my all ideas brought to the table have value. How often do we train leaders to conform their thinking with statements like, "That won't work here." or "I wouldn't say that if I were you."
  • Know who is working for you. There is nothing worse than putting personal relationships over professional responsibilities. Whether your organization is a $2M or $200M - doing what’s best for the organization makes a lasting difference. I have heard stories over the past few years of bullies in the workplace. Yelling, cursing, and banging a fist on the table IS NOT workplace passion; I repeat this is not passion but acceptance of abusive workplace behavior. Between yelling and lying employees, leadership discernment has to be an unfiltered way to focus on the motivation of all of your employees. Why would someone say "watch your back" if here wasn't a reason to watch your back. I have personally experienced a person being nice to me and always help only to find our they were rude and abusive to others and would imply that I was in agreement with the behavior. Hogwash – put a stop to this destructive behavior. Unfortunately, sometimes you have to remove those whose deceit works to tarnish your reputation and limit forward progress of the organization.

These are a few leadership reflections and tips that I have jotted done recently. Remember, there is a way to change but it requires you to do something. How bad do you really want to change?

Now is the time for transformation. Don't be the caterpillar that decides that it's to hard or painful to change into the butterfly. That very decision to change can positively impact your life. Are you looking to develop personally or are seeking to refine your organizational leadership - I can help!


Stay connected with news and updates!

Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.

We hate SPAM. We will never sell your information, for any reason.