Transformational Leadership | Lesson 2: Transformational Leadership vs. Transactional Leadership

In our first lesson, we talked through the biblical concept of imitation. Christ intends for us not just to listen to what he says, but to do what he says. Christ intends for us to live like he lived, and to influence others to do the same. So my argument is that we need to become transformational leaders because that’s what Christ himself did.

In this lesson, we’re going to work towards a definition of two types of leadership, transformational and transactional. These two approaches are really two ends of a spectrum. Each one treats people very differently. Each one has a different goal, and each one has a different way of reaching that goal. Getting clear on these two types of leadership will help us evaluate ourselves. We’ll be able to see what kind of leader we are and what kind of leader God wants us to become.

Defining Transformational Leadership

Let’s start by defining transformational leadership. Transformational leadership is leadership that focuses on transforming the follower and working together to achieve a great vision. This is a form of leadership that seeks to create a genuine movement.

There are a few elements here, and each is important. This kind of leadership aims at doing something great and important in the world, and at the same time aims at doing something great and important in the people you’re leading. That’s how you create a true movement. It’s not just about getting a bunch of tasks done. A movement takes root when people genuinely believe in a cause, when they understand why it is important, and out of a love for God and for others they are willing to do whatever it takes to see the vision become a reality. So transformational leadership seeks to transform the world by transforming people into the image of Christ.

This is the kind of leadership Jesus himself practiced. We’ll talk about this more in the fourth video in this series, when we look to Christ as the ultimate example of a transformational leader. But just consider how much time Jesus spent on developing his followers and investing in them personally. That’s what it means to be a transformational leader.

The transformational leader is concerned with helping the follower reach his or her potential by coaching him or her to grow personally in the context of the organization’s vision and goals (Marchionni & Richie, 2008). Leaders who utilize the transformational style empower and inspire their followers (Barker, 2007; Bass & Avolio, 1990). One writer explains it this way, “Transformational leadership is a process that changes and transforms people. It is concerned with emotions, values, ethics, standards, and long-term goals. It includes assessing followers’ motives, satisfying their needs, and treating them as full human beings. Transformational leadership involves an exceptional form of influence that moves followers to accomplish more than what is usually expected of them” (Northouse, 2016, p.161). So transformational leadership casts a grand vision, sets a high bar, and then invests heavily in people to raise them up and help them accomplish that vision and meet that high standard.

Eight Aspects of Transformational Leadership

1. Seeks Spiritual Growth
2. Transforms from the Inside Out
3. Relies on the Holy Spirit
4. Helps People Look More Like Christ
5. Uses Motivation, not Manipulation
6. Cares for the Needs of Others
7. Equips and Empowers Others
8. Relies on Influence, Not Power

To help you get a sense of what transformational leadership is, I want to share eight aspects of it with you. This is not intended to be a comprehensive picture, but it will help you get the broad outlines of what it involves.

First, Christlike transformational leadership seeks the spiritual growth of those we lead. Their growth in Christ and a thriving spiritual life are important to us as their leaders. We see those we lead as whole persons, and we want them to have a joyful, growing connection to Jesus Christ through the Holy Spirit.

Second, transformational leadership works to transform others from the inside out. We don’t simply want people to act like they care or to pretend or put on a show. We don’t just want behavior modification. That’s hypocrisy. We want genuine, heartfelt, authentic love for the Lord and for God’s mission.

Third, transformational leadership relies on the Holy Spirit. Transformational leadership can be intimidating when you realize what you’re really trying to do. As a leader, you’re trying to transform the hearts of others. But that is impossible to do in your own strength! No leader can be talented enough or charismatic enough to make someone’s heart change. Only the Holy Spirit can do that. So transformational leaders accept this reality and seek to rely on the Holy Spirit to do the work that only God can do in the souls of the people we lead.

Fourth, transformational leadership seeks to help people look more like Christ. Transformational leaders view it as a real goal of their leadership not just to complete tasks, but to see people become more Christlike. That starts by modeling Christlikeness ourselves, by being a strong example of who Jesus is. This gives others someone to imitate, as we spoke about in the first video in this series.

Fifth, transformational leadership uses motivation to help others reach their full potential. We don’t want to lead by control or manipulation, to trick people or coerce people into doing what we want. We want to lead through inspiring, empowering, and motivating. We want people to choose to pursue the organization’s mission on their own, out of a true desire to see the vision become a reality and to see the mission accomplished.

Sixth, transformational leadership cares for the needs of others. As leaders, we have to be attentive to the whole person. We need to think about all of their needs. That includes their physical health, their emotional wellbeing, their financial needs, and even their family and their friendships. We don’t just want productive workers, we want whole and healthy human beings. Transformational leaders treat those they lead as whole persons and care about meeting their needs.

Seventh, transformational leadership emphasizes equipping and empowering others. A transformational leader is not someone who tries to do it all himself or herself. We’re not trying to be the one genius with a thousand helpers. Transformational leadership seeks to create opportunities for those they lead to gain new experiences, to gain new skills, and to grow in their responsibility and ownership over their work. This means teaching people how to do things, and then giving them the ability and space to do them.

Eighth and last, transformational leadership relies on influence, not power. Transformational leaders don’t need to constantly be reminding people they’re in charge. That’s not how they get things done. Instead, they seek to use their influence to move the organization and the individual forward toward the goal. Influence is when people want to follow you; power is when they have to follow you. You don’t have to be a chief executive officer to wield incredible influence. Know the difference between influence and power, and seek to lead through influence.

Defining Transactional Leadership

One of the best ways to understand transformational leadership is to consider its opposite. And that is transactional leadership. Transactional leadership focuses on using and manipulating people in order to achieve a personal ambition. Instead of creating a movement, the goal of transactional leadership is merely to accomplish the leader’s objective. The people are a means to an end. And that end is often a monument to the self, meant to glorify the leader.

Five Aspects of Transactional Leadership

1. Relies on Reward and Punishment
2. Uses a Paycheck as Carrot and Stick
3. Leverages Power for Control
4. Relies on Fear, Not Love
5. Uses People to Get Results

Here are five major aspects of transactional leadership.

First, transactional leadership relies on reward and punishment. This relationship is based fundamentally on an exchange. When someone produces more, you reward them. When they produce less, you punish them. You do this without regard to their character, how they treat others, or how they get the job done. All you care about is results, and you use extrinsic forms of reward and punishment to make sure you get the maximum results.

Second, transactional leadership typically uses a paycheck as the main carrot and stick. Transactional leaders assume people are motivated primarily by money. And they use the paycheck as a way to get their employees to do what they want. They also use the threat of reducing or losing a paycheck as the way to punish poor performers. Now, of course we all need to be able to provide for our families. Compensating people well for their hard work can be a way of caring for their needs. But in transformational leadership, money is never the primary motivation for the employee and it’s never the primary means of influence for the employer. The transactional leader has to rely on the paycheck because he has no other influence.

Third, transactional leadership leverages power to control others. In transformational leadership, we try to motivate, equip, and empower people to do their best to work towards achieving the mission and vision. But in transactional leadership, leaders use their formal authority and power over others to force them or coerce them to do what they’re told. No effort is made to engage the heart and soul of the follower. Instead, the leader is content to use power to manipulate and control what people do.

Fourth, transactional leadership relies on fear instead of love. This goes back to an old saying from the infamous thinker, Machiavelli, who said that it is better for a leader to be feared than to be loved. His reasoning was that love comes and goes, but fear is more stable and easier to maintain. That’s how a transactional leader thinks. Instead of genuine care for those he is leading, he tries to make them fear failure. Rather than ennobling their hearts through love, transactional leaders intimidate people into submission through fear.

Fifth and finally, transactional leadership uses people to get results. Transactional leaders just want to get things done. They view people as the necessary means to make that happen. But this treats people like cogs in a machine. They’re interchangeable. If someone doesn’t do what you want the way you want it, then just get a new person. The organization is a machine and any cog will do, as long as the results look the same. Transactional leaders simply don’t care about the individuals they lead. 

Now that we’ve defined both transformational and transactional leadership, I want us to think through some examples. When you look for guidance in Scripture about how to lead well, not only do you find principles but you also find examples, both good and bad. So we’ll spend our next two lessons looking at Herod Agrippa, a transactional leader, and Jesus, the ultimate transformational leader. I’ll see you next time!