Situations to use Transactional Leadership in Team

Transactional leadership occurs when the leader rewards the team member, depending on the adequacy of the team member’s performance. Transactional leadership depends on contingent reinforcement, either positive contingent reward (CR) or the more negative active or passive forms of management-by-exception (MBE-A or MBE-P). [1]

Here are some situations I can think of.

* Use CR – when you found team member is motivated with some kind of reward & you can arrive a mutual agreement with your team member on reward he is getting after the work done is expected fashion.

* Use MBE-A – when you don’t want a mistake/error done by your team member propagates further that may jeopardize the project. You actively get the statuses, problems, challenges, develop processes, ensure adherence of project processes, conduct reviews, etc so that no error goes beyond certain time period. This really required when you manages a critical project & have time to do micro management. This is used when team member is having less experience in the work area. MBE-A may be required and effective in some situations, such as when safety is paramount in importance[2].

* Use MBE-P – when you don’t really care much about the errors or deviance as soon as it occurred. You have some time to correct them & they are not critical. This is followed when team member is having good experience in the area of working.
Leaders sometimes must practice passive MBE when required to supervise a large number of subordinates who report directly to the leaders[2]

Reference:

1. Significant Behaviors of Transactional Leadership –https://leadershipchamps.wordpress.com/2008/09/19/significant-behaviors-of-transactional-leadership/
2. Transformational Leadership (Second Edition) BY Bernard M. Bass, Ronald E. Riggio, Lawrence Erlbaum Associates, Inc.,2006

Q & A – Which one to Adopt Transactional or Transformational Leadership?

One college student asked me a Question – “Which between the two should be adopted. My lecturer says transactional leader is best 4 efficiency and effectiveness. How true is this?”

My Answer:

To best of my knowledge, I agree with the existence of both leadership styles in everyone. As we displayed & practiced transactional leadership for many decades – it was considered as the best approach, but there is no complete truth in that. One need to evaluate the situation and decide whether to go with Transactional or Transformational & should not stick on to one in all situations.

Your lecturer says so because he practiced transactional in many (appropriate) situations & found to be producing results. Also transactional is practiced by teachers a lot – “praise the student who gets high grade and punish the one who takes lesser. As they get good results from their class, they will get good name from principal”. They will understand the real taste of teaching if they start practicing Transformational.

Significant Behaviors of Transactional Leadership

Comparative study is an excellent method to understand greatness in certain things. Neurons have a pattern of learning objects by relating them. This is important for faster recollection which otherwise termed as quicker learning or better understanding. When someone says “Lightning”, you remember words like “Thunder” and “Rain” even without hinting. When I say “Transformational Leadership” you automatically think of “Transactional Leadership”. In this post, let us see significant behavior’s of Transactional Leadership for better understanding of “Transformational Leadership”.

As per Bass, “Transformational Leadership is in someways an expansion of Transactional Leadership”. With detailed Full Range of Leadership Model, he clearly explained how one can link Transactional and Transformational behaviors.

Transactional Leadership is based on exchange between leaders and followers. Leaders explain what needs to be done & what followers will get on achieving the goal. Significant Transactional Leadership Behaviors are:

1) Contingent Reward(CR)

2) Management-by-exception (either Actively or Passively) – MBE

3) “Hands-Off” or Laissez-Faire Leadership (LF)

Above behaviors are widely followed throughout the world as leadership styles also. These behaviors are having its own merits and it is not wrong in following them. Even a leader can be effective by using these transactional leadership behaviors appropriately at the right time.

Contingent Reward (CR) – “If you finish up these goals with high-quality then you will get good bonus next year”. This is a usual statement you hear from any manager. Most of the time, this style is effective in motivating the team. But surely, it is always linked with benefit, hence it is transactional.

Management-by-Exception (MBE) – The name itself explains the way. Based on the output (exceptions) leaders take corrective actions. As this one is more related to issues rather than rewards, it is less effective than CR. There are two types of MBE.

MBE – Active(MBE-A) involves proactively identifying & tracking possible issues, mistakes and errors in the assigned activities. This style is required in some activities where safety is important.

MBE – Passive(MBE-P) involves taking corrective action until issues occur. When compared to MBE-Active, this one is less effective.

Laissez-Faire Leadership (LF) is doing nothing as a Leader – ignoring all its responsibilities. Letting others do the work & avoiding to show. Researchers termed this as “Non-transactional” and as the “Most Ineffective Leadership Style”. This behavior is shown when one holds the positional level leadership without the required skill or interest in the job.

References:

1. Transformational Leadership (Second Edition) BY Bernard M. Bass, Ronald E. Riggio, Lawrence Erlbaum Associates, Inc.,2006

What are the components of Transformational Leadership?

Leadership does not end with the person who shows the characteristics. Leadership is a journey; Journey is moving from one point to another – Leadership is moving from one level to another; even if you return to the same point you will have a different level of thinking and understanding. Leadership needs followers, it requires dedication and one needs to follow its principles throughout his/her life. This might be the reason why it is a bit complex to understand Leadership as a whole.

We already briefed about Transformational Leadership in earlier post, now it is required to know the constituents of it to practice it well. Transformational Leadership has a long history and it evolved after earlier theories on behavioral, trait, charismatic & situational leadership models. So, it has overlapping with those other theories. Especially, Charisma is one of the components of Transformational Leadership.

There are four components of Transformational Leadership[1]. Some time it is referred as four I‘s of Transformational Leadership. They are:

1. Idealized Influence(II)
2. Inspirational Motivation (IM)
3. Intellectual Stimulation (IS)
4. Individualized Consideration (IC)

Idealized Influence (II):

Whoever be the writer or presenter, everyone agrees that -‘Influence’ is the first and foremost out of all leadership qualities. The stress on influence is more with the word ‘Idealized’. About Influence –

Maxwell says – “The true measure of leadership is Influence nothing more, nothing less.”

You will understand more about Influence when you read Dale Carnegie’s “How to Win Friends and Influence People”. John P. Kotter dealt in detail on this topic in his book “Power and Influence”.

No matter whoever it is, as a Transformational Leader, you have the capability to become the role model for them. You are respected & admired by your followers. They have a separate place for you in their heart. You have absolute trust on your followers and they also have it for you. Your followers understand that you have great potential and determination which will take them to higher levels. You are having the willingness to take risks and be consistent. In any situation, you show high standards of conduct.

Inspirational Motivation (IM):

One or the other way, Inspiration and Motivation are always part of leadership. We know about Inspiration and motivation separately and they are used interchangeably. Let us see their connection in the below highlighted text before we get into Inspirational Motivation.

Motivation really comes down to inspiration. Since motivation comes from within, it is a form of self-inspiration. This process is nurtured by watching others achieve their goals. Most often it is developed by following the example of leaders who do the right thing for people, communicate frequently, empower vigorously, coach regularly, and sacrifice for others.[2]

As a Transformational Leader, you have a vision. You communicate expectations with followers and show optimism in reaching the goal. By your vision, activities and behavior, your followers get motivated and inspired. They all feel team spirit and work enthusiastic as a group. They start demonstrating their commitments towards the goal. Motivation can occur only if two-way communications happen.

Intellectual Stimulation (IS):

“People respond to a challenge because it taps their inner desire to succeed.”[2]

This component deals with stimulating followers’ analytical skills and problem solving ability. Everyone has the skill to analyze problems in their hand. Each one has a different approach to an issue. As a Transformational Leader, you need to allow followers’ to come up with their solution (it may be different from yours) for the same problem. If the issue is not understandable you can help them to re-frame it. Encourage them to approach old issues with new methods to come up with meaningful output.  Encourage their creativity and innovation. Don’t criticize or don’t pass sarcastic comments in public.

Individualized Consideration (IC):

Each individual is different. Followers’ have different needs & show different levels of potential. As a Transformational Leader, you need to accept this. You need to develop higher levels of potential. It cannot be achieved by showing the same level of attention. You should take special care of each individual follower’s need for achievement and growth. Provide supportive environment. Have clear two-way communication in understanding their concerns. Develop your follower by delegating tasks. Monitor and provide improvement tips on delegated activities and make them produce finer output. This increases followers’ confidence and morale.

Closing Notes:

I thought it is worth mentioning a quote and a Q & A from Steven Covey. Following is the quote by Steven Covey on Transformational Leadership:

“The goal of transformational leadership is to “transform” people and organizations in a literal sense – to change them in mind and heart; enlarge vision, insight, and understanding; clarify purposes; make behavior congruent with beliefs, principles, or values; and bring about changes that are permanent, self-perpetuating, and momentum building.”

Following is a Q & A from “The Mission Statement That Changed The World”, posted on March 3rd, 2008 in Steven Covey’s Blog (Link). You can match each of the transformational components with Gandhi’s mission statement listed below.

Q: Who is one of your personal heroes?

A: Mahatma Gandhi. Let me read you his personal mission statement:

“Let the first act of every morning be to make the following resolve for the day:
* I shall not fear anyone on Earth.
* I shall fear only God.
* I shall not bear ill will toward anyone.
* I shall not submit to injustice from anyone.
* I shall conquer untruth by truth. And in resisting untruth, I shall put up with all suffering.”
– Mahatma Gandhi

References:

1. Transformational Leadership (Second Edition) BY Bernard M. Bass, Ronald E. Riggio, Lawrence Erlbaum Associates, Inc.,2006
2. Great Motivation Secrets of Great Leaders BY John Baldoni, McGraw-Hill,2005

My Other posts on Transactional & Transformational Leadership:

1. Transactional Leadership Vs. Transformational Leadership

2. Is anything called transactional leadership exists?

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Is anything called transactional leadership exists?

After writing my earlier blog post, I read number of books on transformational leadership. In one of his book, John Adair asked “Is anything called transactional leadership exists?” I got interest on his explanation and found that his statement is true but to some extent.

“I believe, that there can be no such thing as transactional leadership, for merely honouring mutual agreements meets none of the necessary conditions we identified for explaining why the term leader can be used for anyone.”

Those individual termed as ‘transactional’ leaders possess leadership skills but it is less transformational. Instead of using the word ‘less transformational’, researchers would have used ‘transactional’.

Transactional behavior exists and it is prevalent in this world. Transactional Leadership got into every discussion of Transformational Leadership because a) ‘transactional’ way of dealing things are very familiar to everyone b) contrasting two different methods are easier for understanding c) it is included as leadership to bring out the excellent concept of transformational leadership.

My Other posts on Transactional & Transformational Leadership:

1. Transactional Leadership Vs. Transformational Leadership

2. What are the components of Transformational Leadership?