Among all the different leadership styles, transactional and transformational are perhaps the two that are compared the most. Both styles have their advantages and disadvantages and are suitable for achieving results.

What style should you adopt for lasting business success? 

In this article, we’ll discuss both leadership styles and give examples of each. 

We’ll also cover how you can leverage modern technology to automate monotonous tasks and focus on the long-term growth of your business. You can pick a leadership style that helps you meet your targets and is in line with your vision.

What Is Transactional Leadership?

Transactional leadership theory, also called managerial leadership, centers around the role of direction, organization, and group accomplishments. 

This includes the use of rewards and punishments to achieve optimal job performance and dedication from employees. 

Transactional leadership is a more passive style of leading a group. It’s best suited for reaching short-term goals efficiently and for task-oriented transactions.

Elon Musk is someone who uses transactional leadership to attain great results. 

He incentivizes his employees by directing them to achieve specific goals in return for rewards. This style has proved particularly successful for his company in achieving short-term goals.

 

What Is Transformational Leadership?

The transformational leadership theory is where leaders inspire employees and stimulate their performance beyond what was previously expected of them. 

This style of leadership motivates people to achieve better than expected results. 

The theory believes in the leader identifying areas where change is needed and then inspiring employees to take initiative beyond their immediate self-interests. 

Leaders work to intellectually stimulate the employees by encouraging them to think independently and brainstorm new solutions for challenges, and by fostering different learning opportunities.

Perhaps one of the best examples of transformational leadership is Steve Jobs. 

He was a great businessman and an exceptional leader. He encouraged his team to always come up with distinctive ideas and products. His leadership revolutionized the tech industry and made Apple a household name.

 

Difference Between Transactional and Transformational Leadership

Transactional leadership vs. transformational leadership is an extensive debate, both having their advantages in certain scenarios. 

Transactional style leaders use rewards and punishments to achieve specific outcomes. 

Transformational leaders engage and inspire employees and tend to be more actively involved.  

What Leadership Style Should Businesses Adopt?

Adopting a leadership style is a decision that will have long-term effects on your company and employees. 

Transformational leadership is where leaders should be spending most of their time to get the sort of growth that companies need in a competitive market.

For your brand to really make a difference and stand out, you want to get the best performance from each employee.

Transformational leadership style encourages employees to think independently and own the tasks assigned to them, instead of just following orders to get a job done. This might bring in fresh ideas and perspectives. 

Pushing your employees out of their comfort zone will change their perception of what you expect of them, inspiring improved output and productivity.

Automation Can Help You Efficiently Manage Transformational Tasks

To focus on transforming your business, you need to first automate or delegate everyday transactional tasks. 

This will free up your time from monotonous work and reserve your capabilities for more creative and intellectually stimulating challenges.

Automation uses technology to make simple processes run automatically with little or no oversight. 

For example, project management software can be integrated with your customer support software. Every time a customer complaint comes through, the software automatically forwards it to the right department. 

This can streamline the process and cut down on the time needed to resolve complaints.

Or possibly an ordering system can be created that tracks seasonal supplies, calculating the expected number of orders in any particular time frame and ensuring sufficient supplies, packing materials, and raw materials are ordered. 

This kind of automation helps prepare your company for a large influx of orders, such as around the holidays.

You can automate transactional leadership duties with the help of a tool, software, or platform that gives you features such as:

  1. A single integrated dashboard that increases the visibility of day-to-day operations.
  2. A system that streamlines communication between departments and prioritizes your tasks and goals.
  3. Scoreboards for employee engagement and progress management to ensure that the teams are headed in the right direction. You can input KPIs and the automated system will give you accurate results to view. That way, you can quickly make critical decisions without spending too much time manually evaluating projects or employees.
  4. A system to incentivize employees and promote engagement by clearly defining each members’ duties.
  5. A way to identify employees who need more support and guidance so you – as a leader – can direct your attention exactly where it’s needed.
  6. A system that transparently determines priorities and divides tasks between concerned departments and employees.
  7. A system to keep a check on available resources and monitor their usage, with built-in safeguards to ensure their most economical usage and prevention of waste.

These are a few of the top ways automation can assist transformational leadership but there are  many more ways. 

Transactional Leadership vs. Transformational Leadership - The Takeaway

You should evaluate your leadership style and determine if you’re practicing the right approach based on your long-term business goals. 

The best leaders use a mix of both styles, depending on what they are doing or trying to achieve. 

Business is full of transactional leaders because short-term goals are those needing immediate attention. 

If your endgame is to distinguish your brand from your competitors, you have an opportunity to create lasting change and inspire your employees to deliver their best. In this case, the transformational leadership style is more suited to accomplish this. 

If you’re ready to shift towards a transformational leadership style for your business, then check out how StrategyX can help you automate routine transactional tasks. 

That way, you can be sure all the important day-to-day tasks are completed, giving you time to focus on transforming your business while ensuring short-term success.