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  • Writer's pictureDr. Vera Alves

Are you a transformational leader, or are you still in the transactional model?

Updated: Mar 18, 2021

Effective leadership is often easier said than done. Different leadership styles might be more or less effective, so it is important to understand and reflect on their characteristics and challenges. In our previous posts, we discussed charismatic leadership, the good and the dark sides. Now we invite you to reflect on transformational leadership.

For a long time, many leaders prioritized a more transactional leadership style. Getting things done was the primary focus. However, many organizations have shifted towards transformational leadership with outstanding results. In this article, we will explain the differences between these styles and the leadership skills that they focus on.

What is a Transactional Leader?

A transactional leader is a person who treats a business like it is a transaction. In most instances, this type of leader relies on interactions being treated like a give and take method. Transactional leaders often incentivize their employees with traditional methods like raises and bonuses. They concentrate on accomplishing the job that needs to be done. For transactional leaders, effective leadership translates into rewarding good performance and threatening and disciplining poor performance.[1] When employees do not perform well, they are penalized. These leaders are ready to take corrective actions when rules are not followed, or standards are not met. Some transactional leaders may adopt a laissez-faire style and abdicate responsibility by avoiding making decisions.[1] Employees are expected to buy into a project because it's their job, and they may be rewarded for their commitment. While this leadership style may be effective in certain situations, it tends to do very little for a team's genuine interest and doesn't always work long-term. People are not willing to walk the extra mile for a transactional leader.

What is a Transformational Leader?

A transformational leader inspires and motivates employees to deliver greater levels of performance and organizational commitment. Some of their main characteristics are charisma, vision, ability to engage and inspire, team-centeredness, higher levels of emotional intelligence, and a predominantly collaborative work style. They deliver better results by getting buy-in from employees. Instead of merely expecting a job to be done because it needs to be, transformational leaders focus on creating a positive interest in their employees. They inspire their employees with charisma and focus more on helping them work collaboratively in teams. Transformational leaders often challenge the status quo, communicate a promising future vision, and motivate and inspire their followers to pursue the organization's objectives. In the end, the goal is to help employees see the benefit of a task beyond their personal interests. When used properly, this leadership style is incredibly powerful.

Tips for Transformational Leadership

To be an effective transformational leader, you need the ability to inspire, which can be accomplished in several different ways.

  • Demonstrate your honesty and ethics.

  • Lead by example. You need to walk the talk.

  • Build trust with and among your team members.

  • Communicate high expectations.[1]

  • Provide a clear vision and instill pride.[1]

  • Communicate your messages clearly, honestly, and compassionately.

  • Stimulate your team intellectually and show them you believe they can do superior-level work.

  • Focus on the team and help them see the value in collaboration.

  • Give your team members individual attention and identify personal characteristics and needs.[1]

  • Build Hype. Sometimes, creating buy-in is simply a matter of bringing the right energy. Show your team that the project is exciting and going to benefit everyone.

Being a transformational leader can create a positive work environment and open many doors of opportunity. Employees are usually willing to exert extra effort on behalf of their transformational leaders, and organizations are more effective under this leadership style.[1]

Do you recognize some of these leadership skills in your leaders? What characteristics of transactional and/or transformational leadership can you identify in your own managerial style? Leave a comment here or send us an email at

Vera Alves is the Chief Consulting Officer at Leader Essentials Group, with extensive experience in leadership development and business management. With over 12 years of experience as a C-suite executive, Vera is highly skilled in the areas of leadership, strategic planning, operations management, organizational behavior, and change management. She possesses highly developed communication, training, and linguistic skills reflective of a very strong and charismatic leadership style.

_________________________________________________________________________ [1] Bass, B. M. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational dynamics, 18(3), 19-31.

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