In an article from October 2023, “A Story of Two Shutdowns And Their People“, I told the story of two very similar manufacturing companies with two very different distinct leadership styles that created two very different cultures. In today’s article, I am revisiting these two leadership scenarios with a look at how these styles affected the culture and what that might mean for your business.
Transactional Leadership – Bass [1997], described transactional leadership as “a matter of contingent reinforcement of followers”.
This type of leadership creates a culture of “only do more if I can get paid more.” In this type of relationship, if the leaders asks their people to go above and beyond their expected work and put in time and effort to identifying where improvements could happen, the leadership must expect to pay their transactional team more for their extra effort.
Transactional relationships are perfectly acceptable in the beginning of your employee/corporate relationship. We must pay our people because they need the money to pay for their lives. At the beginning of our people’s employment, they are doing what is expected of them in their assigned jobs and they are expected to do this well, but nothing beyond that. Learn the job – get good at it – then we’ll talk.
But after a while, if you don’t have people that feel they are ‘part of the team’, willing to freely share their perspective, insights, and expertise, it is going to be an issue for scale and competitiveness for your business. This is often an issue found in a hierarchical type business structure, where only those at the top have any voice. And, in a small business, often there is only one voice at the top, and that is your voice.
Do this: Support and encourage your people to step outside their roles. Ask for their expertise and give them some autonomy to make decisions in their roles. This will help them become even better at what they do, which is a benefit to your business.
Transformational Leadership – Bass [1997], described transformational leadership as “the moving of followers beyond their self-interests for the good of the group.”
Transformational leaders give people opportunities to try new things, bring new ideas, be seen as leaders for their efforts, in their roles, within the company, and beyond. Don’t take things for granted because it is already known and don’t assume someone will know it. Ask for people to uncover what is not known and then praise them for the efforts they contributed towards good results.
Employees of a transformational culture also expect to be paid. If they are paid well enough, and they are not struggling to live, they will have more bandwidth to put towards learning and creativeness for future projects. The structure of this type of business is often much more flat with leaders and decision makers throughout the company. There is an expectation for people to learn other roles, as well as more opportunity to learn and grow within the company.
Do this: Lead by example – nurture the learning mindset and expect others to be leaders in their own roles.
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Reference: Bernard M. Bass, 1997 “Does the Transactional-Transformational Leadership Paradigm Transcend Organizational and National Boundaries?”
This article is 100% original content – The articles you read in this blog are 100% created by Barb Stuhlemmer, not by AI.
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