transactional leadership

Why Transactional Leadership Sucks

Transactional leadership makes me cringe. Transactional leaders focus on title and hierarchy. They search for and crave prestige and authority. It all feels so political, and it’s a real problem for me.

You manage things. You lead people.

Grace Hopper

Maybe it’s quotes like this that began my rub. Or maybe it’s my preference for what I typically call relational leadership. Research agrees that transformational (aka relational) leaders have a positive effect on employee retention so why wouldn’t we always leverage a relationship-first style of leading our people?

Then again, maybe I’ve had it wrong all this time. Maybe they’re not so bad, and at times, maybe I’m a transactional leader myself.

Scary thought.

I recently reframed transactional and relational leadership, and my bias became clear.

Transactional leaders are mission first. Relational leaders are people first. Both have their place.

For example, if we cannot complete the mission, how could we afford to pay our people? Labelling one as good and the other as bad is unfair. While each of us has a preference for one over the other, great leaders are elastic enough to oscillate between styles as the situation requires. Then again, oscillation infers binarism. It’s better described as a gradient.

But maybe I’m getting ahead of myself. Let’s compare the two styles so we can share the same mental model.

Relational LeadersTransactional Leaders
How does their values intersect with the work?How can they be adequately rewarded for their hard work?
What’s their answer?I have the answer.
I measure growth by how much they feel they’ve learning or being stretched.Growth is measured by how quickly they can reach their next promotion.
I ask lots of questions while they do most of the talking.I do most of the talking.
Being heard is paramount.Being right is paramount.
Happiness, engagement, and the mission are all equally important.Successfully completing the mission is the only signal. Happiness comes as we rise to the top.
Conversations begin with, “how’s the family?”Our time is valuable. Let’s cut to the chase.
We’re committed to one another.We’re committed to the mission.
Long-term sustainability is critical.Swift execution is critical.

I’m tempted to suggest that transactional leaders ask, “What’s in it for me?” while relational instead ask, “What’s in it for us?” However, that again feels unfair. Each struggles differently. For example, extreme relational leaders can fall victim to the law of sunk costs when working with poor performers. This may cause them to over invest in the wrong employees and neglect those more quiet that would succeed with some extra attention. Transactional leaders, however, usually excel at culling the herd and are skilled at sifting through the noise to find the signal.

Conversely, we already mentioned how the research suggests that transactional leaders struggle with attrition. Extreme transactional leaders also often struggle with humility. They sometimes view their wealth of experience and vast intelligence as a shortcut to the best answer. Bill Campbell in the Trillion Dollar Coach sums it up well:

You may know the answer and you may be right, but when you just blurt it out, you have robbed the team of the chance to come together.

Maybe Bill Campbell in his parable explains it best. (source)

As the lesson goes, a man found himself stuck in a deep ditch, and after hours of exploring every obvious option to free himself, he simply slumped to the ground and gave up. Moments later, a passerby shouted down to him to ask if he needed help. With a quick reply of “yes,” the passerby offered encouragement and praise, telling the stranded man he was capable of anything he put his mind to, that he believed in him and was confident that with a bit more effort, the man would indeed escape his dire situation. Then he left. The stranded man felt encouraged and supported, but remained stranded.

A second passerby came along and shouted down to ask if his assistance was needed. The quick reply was once again “yes,” at which point the passerby opened his wallet and tossed down numerous dollars. Then he left. The stranded man felt sufficiently resourced, but remained stranded.

The third passerby came along and recognized the man in the ditch. With a familiar voice she shouted down to ask if her friend needed help. The quick reply was once again “yes,” and the passerby promptly jumped down into the ditch. The stranded man was stunned, and said in a dispirited voice, “great, now we’re both stuck.” The friend replied, “no we’re not, I’ve been here before and I know the way out.”

The world needs more like you, Bill.

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