If you are following your natural tendencies as a leader then you will likely fit into one of the styles we will be discussing in this series. Each style has advantages and disadvantages depending on the situation. If your style matches the needs of the organization, that is great! As the organization changes, will you then adopt a new style to continue leading strategically?

Being successful in a variety of situations will be possible when you broaden your skills and efforts beyond the style that is so comfortable to you. As a strategic leader, you will need to rise above that comfort zone and lead effectively for various challenges and work environments. Your organization is depending on you- not only with your natural “leanings” but also with your additional “learnings”.

Past studies on leadership were usually focused on how the leader motivates and delegates work to his immediate followers. Very little focus was placed on the leaders’ values and styles of leadership that affect leadership effectiveness. The staff at Strong Advice have learned through their experience that leaders must be aware of their underlying values and personal style. In a previous article, we shared our thoughts on the first major factor that contributes to leadership effectiveness. Click here to read: “The impact of a Strategic Leader’s values on their Organization”.

Let’s begin with a review of leadership styles. Once you are aware what style you lean toward, you have the opportunity to learn other styles for different leadership challenges.

Established Leadership Styles

To begin this series, the focus will be on three well- researched styles of leadership. These are largely defined by the leader’s behaviour and the methods he employs to reach the organizations objectives. These three styles are: 1) Transactional, 2) Transformational and 3) Charismatic leadership.

Transactional Leadership Style: 

When the leader focuses on transactions, they ensure everyone has clearly defined expectations and desired outcomes. The leader then measures the performance of the individuals and provides rewards to motivate the worker to increasing or improving performance. Good results means better pay, a bonus or potential for promotion. Disappointing results lead to reduced pay, punishment or loss of job. The transactional leader uses power of his position to reward or punish and thereby motivates others by his authority. Individuals respond out of respect for his position and seek to please to obtain rewards. This is the most common form of management or leadership because it does yield results, but arguably not optimum results.

In most organizations, a foundation of transactional agreements plays a part of any leadership style. The extent to which a leader relies on this process defines whether she fits the description of a Transactional Leader.  This approach to leadership is helpful for establishing a leader’s reputation as one who delivers rewards agreed upon in exchange for performance.

Transactional Leadership and impact on organizational performance:

The study of leadership styles is a relevant area for research because there is evidence that different styles of the strategic leader has significant impact on the overall organizational performance. For example, elements of transactional leadership, such as the provision of contingent rewards have been found to have a positive correlation with employee performance and effort.  As a result, transactional leaders achieve improved performance outcomes.

With all these favourable arguments for transactional leadership, you may ask, “why should we apply other leadership styles?” The basic answer is that transactional leaders depend on a barter relationship with his followers rather than a personal relationship. While this style creates a generally stable and effective outcome in the shorter term it could lack long term sustainability without other styles being applied. Strong Advice recognizes that transactional leaders establish clear standards and expectations, which are essential for any effective leader.

However, leaders should avoid relying solely on this approach. Rather, transactional leadership should be used in combination with other styles which will be discussed. Bookmark this page and revisit for the next article on “Transformational Leadership”.

To learn more about how to make the most of your leadership style, contact Strong Advice or register for the next workshop on The SUCCESSFUL Leader.

Next article: Four Bad Reasons Good People Say “No” To Leadership