Transcripts for Transactional vs Transformational Leadership by Communication Coach Alexander Lyon viewed on YouTube.

We are going to look at the transactional leadership style

and the transformational leadership style.

We’re gonna compare these head-to-head,

and I’m basing this almost all

on Johnson and Hackman’s book on leadership.

I will put a link to that in the description

below this video.

So let’s get into the details.

(lively rock music)

I’ve been talking a lot about leadership lately.

In fact, I have three related videos

I wanted to tell you about.

The first is on the traits approach to leadership.

The second is on the transformational approach.

That’s a solo video

just on the transformational approach to leadership.

And the third is a solo video

on the transactional approach to leadership.

And I’ll put links to all three of those videos

in that section below this one.

But in this video, we’re going to compare and contrast

transactional and transformational leadership side-by-side

so you can see how these two relate to each other.

So here we go.

So James McGregor Burns years ago

wrote a book called “Leadership.”

And he looked at these two leadership styles

by using Maslow’s hierarchy of needs.

And there are five levels to the Maslow’s hierarchy.

And what he said was that transactional leaders

were really in the business of helping followers

meet those three lower level needs on the hierarchy.

So these leaders are most concerned with satisfying

the *physiological*, safety and belonging needs

of their followers.

And it’s an exchange.

The leader exchanges the pursuit of these rewards,

these needs, with good performance, good outcome.

So if the followers are doing a good job,

the leader does what he or she can to satisfy these needs.

If the follower does not do a good job,

then the leader may take these away from them,

they may not support the pursuit of these three needs.

One of the concepts, a couple of the concepts,

that go with this were developed

by Bernard Bass and his associates.

He called these transactional factors,

and the first is a contingent reward.

So the approach here is that the leader

looks at performance and then rewards good performance.

It’s the reward is only there

if it’s tied to that good performance.

And the reverse is also true.

It’s called management-by-exception.

The leader will step in and will punish poor performance.

They’ll give corrective action and feedback

for bad performance.

So you reward the good, you punish the bad,

and it’s all a transaction.

Here are a few examples of this.

Bill Belichick from the New England Patriots

is an infamous transactional leader.

He’s won a bunch of Super Bowls,

he’s won even more games.

So this leadership style can be effective,

but he is very known for simple rewards and punishments.

If you do a good job, you keep your position,

you get to start, you get to play.

If you don’t do a good job, then you get benched,

you become a second stringer, you get let go from the team.

They have an expression on the Patriots, “Do your job.”

This is a classic transactional leadership philosophy.

You do your job, things work out.

You don’t do your job, we get someone else who will do it.

So it’s easy to blow off this transactional approach

as being old school and ineffective,

but here we have a coach of the NFL

who’s won more Super Bowls than anybody.

So you can’t really blow off this style

as ineffective or outdated

because it still does work under certain circumstances.

Another one is a fictitious example, is Magneto.

If you’ve ever watched the “X-Men,”

Magneto is very much about moving forward,

accomplishing the goals for the people that are around him,

the X-Men that around him.

It’s very task-oriented,

if you’re off the team, you’re off the team.

He doesn’t have a lot of bad feelings about that.

He just moves forward.

We’ll contrast him with Professor X later.

And the third one, the one I really wanna talk about,

is Johnny Lawrence from “Cobra Kai.”

This is from the show “Cobra Kai,”

which is sort of a sequel to “Karate Kid.”

So Johnny Lawrence is a very interesting figure,

but he is a leader.

There’s no doubt about it.

He organizes his dojo around some very basic

leadership philosophies that are all transactional.

For example, we don’t see him much caring

for the physiological needs of his people,

like food, shelter, clothing,

but he does provide safety.

When he teaches his students karate,

they can protect themselves.

And also, he’s all about this belonging.

I wouldn’t say it’s about love and belonging,

but it’s about belonging.

Once you’re on Cobra Kai, you are a member of the team,

you have the other team members who have your backs.

They’re definitely a group,

a certain kind of dysfunctional group, but they are a group.

And if you’re part of that group, great.

If you don’t play by his rules, he kicks you out.

Like he makes a lot of students leave in the first episodes

because they just don’t fit Cobra Kai.

And so he’s a very transactional leader,

but he can be an effective leader nonetheless.

If you’re doing well,

you get trophies for winning tournaments.

If you’re doing poorly, you do pushups.

You know, there’s a consequence,

reward for good performance,

punishment for bad performance.

That’s all transactional.

So let’s turn now to transformational leadership.

This is where leaders,

according to Burns and his book “Leadership,”

engaged the followers on all five levels of the hierarchy.

So these leaders are still trying to help followers fulfill

those lower levels and accomplish those successfully,

but they’re also trying to help followers fulfill

those next two level needs, those higher levels,

that esteem and self-actualization.

So they’re trying to empower followers

to feel good about themselves by reinforcing

those inner feelings that the follower has,

of competence, respect, self-worth,

and providing external feedback and recognition

to support self-esteem.

And on the top level is self-actualization.

They are providing support and encouraging

followers’ pursuit of self-actualization and the desire

to become the best person they can possibly become.

Let’s look at some examples.

Ann Hathaway from the movie “The Intern”

is a great example of this in film.

She’s a very young CEO, but she has vision.

She wants to create an amazing, different kind of company.

She even invests in her aging intern

played by Robert de Niro.

So he’s a guy who came out of retirement

to just do something interesting.

She spends a lot of time with him,

invests in the relationship.

She wants to, even though this guy is older

and almost retired again, become all he can be.

She’s a special kind of CEO that wants to do great things

with her company, great things with her people.

She’s helping them reach those higher level needs

of the hierarchy.

Professor X, or Professor Xavier, from the “X-Men”

is another excellent example and a counterpoint to Magneto.

So he has a school that’s for gifted youngsters.

These are mutants basically,

but he wants them to become well-rounded people,

to explore their gifts, to literally become everything

they’re possibly capable of becoming.

He provides safety and belonging in his school,

but he also helps them to feel good about themselves

and wants them to stretch into the best people

they can be in the long run.

And finally, the one I really want to talk about,

Daniel LaRusso.

This is the “Karate Kid,” the original,

and on this show “Cobra Kai,”

he now has his own karate school, Miyagi-Do Karate.

And Daniel LaRusso is much like Mr. Miyagi.

Mr. Miyagi said to him in the original movie,

“We make a sacred pact.

I promise to teach you karate, you promise to learn.”

So you still see the exchange happening there.

That’s a transaction,

but Mr. Miyagi wanted to take things to the next level

and invest in the whole person.

He does this frequently by talking about balance.

Mr. Miyagi said, “The lesson is not just about karate only.

It’s a lesson about your whole life.

When your whole life has a balance,

everything will be better.”

He invests in Daniel LaRusso’s self-esteem.

He invests in Daniel becoming the best possible person

he can become.

And this is exactly the same teaching approach

that Daniel LaRusso takes in “Cobra Kai” with his students.

He has a fewer number of students.

He invests in their whole life.

And you see him passing on this lesson of balance

to his students very carefully, very deliberately.

He’s helping them become all they can be.

He is a transformational leader.

So he’s satisfying those lower levels of the hierarchy,

but he’s also helping them to meet those higher levels

of the hierarchy, which qualifies him

as a transformational leader.

And there are some key characteristics

of transformational leadership.

I go into these in more depth in that video,

that’s dedicated to transformational leaders.

I’ll put a link to that in the description below.

But briefly, here are the top five.

Transformational leaders are creative.

They really think outside of the box.

They often go against the norms and the standards

of a given industry or organization to do something new.

They’re interactive.

They engage their followers quite a bit.

They talk to them.

They interact with them daily, they are hands-on.

They are free, visionary.

They have a clear vision for the future

and inspiring vision for the future

that brings their followers along.

Number four, they are empowering.

So they really give their followers a lot of latitude

to grow and to become all they can be.

And they are, number five, passionate.

They have a real excitement for their work.

It’s not just a job for these leaders,

they’re really into it.

And that passion then bleeds out onto everybody else,

and they get excited too.

The goal of transformational leadership is to help transform

followers into leaders themselves.

Here’s a critique of both of these.

The transactional leadership style has some advantages.

Clear structure, achievable goals.

It can lead to high performance that we’ve seen,

like Bill Belichick and some other transactional leaders.

There’s a very straightforward motivation,

and it can be very efficient.

The disadvantages of the transactional leadership approach

is it’s inflexible and rigid,

can lack inspiration, and it can really limit

the engagement of followers.

In terms of the transformation leadership style,

the advantages are, it taps into those higher level needs

and more personal motivations of followers.

It looks to empower and develop the whole person

and to transform them into a leader themselves.

And it can lead to amazing and even life-changing results.

The disadvantages, because no approach is perfect,

it can be very complex.

And sometimes it represents a blurry collection

of leadership attributes.

That’s one of the criticisms.

It also might not be all that trainable.

Some people think that transformation leaders

are just that way, and you can’t really teach it

as a skill set.

And the third is that charisma like this

can be potentially abused.

So sometimes transformational leaders

have such personal charisma that it can blind people

to their faults.

So question of the day,

which of these do you find most interesting and most useful?

Which one do you see yourself in?

I would love to hear your comments

in that section below the video.

I look forward to reading them all.

So thanks, and I will see you soon.

End of video.