Transactional Leadership and Transactional Leadership Theory with Examples. 10 Ways to Become a Good Transactional Leader in the VUCA World

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Transactional Leadership and Transactional Leadership Theory with Examples. 10 Ways to Become a Good Transactional Leader in the VUCA World

“Leadership is the ability to get extraordinary achievement from ordinary people” by Brian Tracy.

As a leader, you need to create a high skilled workforce by inspiring your team members so that they can go beyond their task requirements. As a result, many new leadership styles have been invented and are being used by various organizations successfully. Let’s get to know about one such leadership style further.

What is Leadership Transformation?

For effective leadership, transformation is necessarily needed. A leader at the top can help to shape a proper vision and guide his team. However, leadership alone isn’t enough, as transformation also equally plays a valuable role in the success of an organization. Having an evident knowledge of your organization is significant for understanding the full impact of transformation and managing the transformation strategy.

What is Transactional Leadership and its Theory?

Handpicked for our Leaders: What is leadership transformation?

Transactional Leadership is one of the styles of leadership in which the leader relies on rewards and punishments to attain optimal job performance from his team members. This leadership style concentrates on results, conforms to the prevailing structure of an organization, and measures the success of that organization according to its system of rewards and penalties. In this leadership style, the leader is responsible for the maintenance of routine, which he does by managing the performance of each team member and facilitating the team’s performance.

The theory of this leadership style says that the leader has the main authority as they are most qualified and the structure also supports the hierarchy of power. This power lies in the hands of the leader, and subordinates have little if any input on how some things can be done. It also emphasizes the function of rules and regulations, which are considered as the essence of the transactional leadership style. 

5 Transactional Leadership Examples-

5 Transactional Leadership Examples
  1. Bill Gates- Bill Gates, one of the richest men in the world is known for using the transactional leadership style. As a transactional leader, he used to visit the teams and asked difficult questions until he felt satisfied that the teams were on the right path and knew the organization’s goal.
  1. Howard Schultz- Howard is another great personality known for using a transactional leadership style. Being the CEO of Starbucks and a transactional leader as well, he was responsible for the vision and implementation of the Starbucks model with a total of 1,51,000 employees and 20,519 stores across the world.
  1. Vince Lombardi- As a transactional leader, Vince believed that winning was a habit. He pushed his team to have the same mentality, and if they didn’t have it, then he would let them go. He knew the importance of extra hard work and how it would give his team more advantage.
  1. Norman Schwarzkopf- Norman used a transactional leadership style to attain the complex type goals. His transactional leadership style was often characterized by the utilization of such a framework that rewarded compliant behavior.
  1. Jeff Bezos- The owner of Amazon Inc., Jeff is known to be a micro-manager, because of his authorization approach in managing his team. He is task-oriented and deploys strict standards for the achievement of the company’s goals.

10 Ways to Become a Good Transactional Leader in VUCA World-

  1. Be Agile- A transactional leader should be willing enough to take himself out of his comfort zone and be open-minded so that they can quickly embrace new concepts.
  1. Develop a Shared Purpose- You should create a common purpose with your team and organization as well. This will create a favorable work environment in which all can work for the achievement of that goal.
  1. Be Confident- As a transactional leader, you should have the ability to lead through uncertain situations, which often occur in a VUCA environment. You should be able to make quick decisions if such situations arise and make a way out of them.
  1. Be Self-Aware- You should have a SWOT analysis of yourself and your areas of development. Your ability to be authentic and work by showing your true self builds trust among your team.
  1. Lead Through Influence- You should maintain your high-level influencing skills and be able to collaborate with your team. This will motivate your team to bring out their best version.
  1. Be Clear- You should be clear about the goal to your team members as a transactional leader. For this, try to focus on what counts and what it is really about and make sure to apply right mind where it’d be most effective.
  1. Be Ambiguous- This means that you should be able to deal with situations that have limited information and still make the best out of them.
  1. Learn Fast- As a transactional leader, you should assume that change is constant and your skills are finite. This will help you to learn and adapt to the changes as fast as possible to thrive.

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  1. Lead Across Generations- You should help everyone in your team to manage their work-life, balance their priorities, and be able to fight burnout. If your team overcomes these obstacles, then it would help them to successfully achieve the desired goal.
  1. Maintain Effectiveness- Lastly, you should be able to maintain the effectiveness of your team also while motivating them to perform with their best capability.

Conclusion

Thus, hereby it can be concluded that transactional leadership can be viewed as the leadership style which helps to develop maximum potential. It structures the basis for more interactions, however, leaders should take care to not practice it exclusively. It is because then it may lead to the creation of an environment that is pervaded by position, politics, power, and perks.

Frequently Asked Questions

What is Transactional Leadership Theory?

The theory of this leadership style says that the leader has the main authority as they are most qualified and the structure also supports the hierarchy of power. This power lies in the hands of the leader, and subordinates have little if any input on how some things can be done.

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