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Transformational Leadership

Transformational leadership is about inspiring significant organizational change by aligning the team with a shared vision. This leadership style involves four key actions: embodying the vision and values, inspiring the team with a compelling future vision, encouraging innovative thinking, and paying attention to individual team members’ growth and needs.

The effectiveness of transformational leadership lies in its ability to increase job satisfaction, instill a sense of purpose, create a strong leader-follower bond, focus on long-term development, and build a unified commitment to a shared vision, all of which lead to improved organizational performance.

Transactional Leadership

Transactional leadership is a pragmatic style where leaders incentivize performance by offering rewards for clear, contractually agreed-upon tasks. It has been shown to sometimes be as effective as transformational leadership in achieving good employee outcomes.

This leadership style motivates by setting clear goals and providing rewards, which can lead to a sense of fairness and trust in the organization. It consists of two main practices: clearly defining roles and rewarding the fulfillment of these roles, and actively managing and correcting standards when necessary.

Source: The Wake Up Call research commissioned by The Concord Leadership Group written by Adrian Sargeant, PhD and Harriet Day (2018).