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Transactional Leadership

by Marcus Robinson

The main thing you need to know about transactional leadership is that its focus is on performance outcomes; it is about the real results that are produced to achieve business objectives. To that extent, transactional leaders guide or motivate individual contributors in the direction of established goals by clarifying role and task requirements.

The major elements of this kind of leadership are:

  • Control

  • Measurement

  • Administration

  • Performance

The mechanics of transactional leadership range from controlling ideas such as values, goals and specific objectives to more concrete systems defined by policy, process, and procedure. At the level of controlling ideas, transactional leaders manage performance by helping people interpret vision, values and strategy in a way that assures the success of the business initiative. These interpretations must lead to clearly defined tactics and actions that generate incremental gains toward the achievement of performance goals and business objectives. Clear objectives must be established and processes need to be put in place to achieve those objectives. In many cases, these tactics and actions are codified as documented policy and procedure to make certain that winning processes are maintained and improved over time. The drive for predictable sustainable results is an intrinsic motivation of a transactional leader. A transactional leader monitors progress through a broad range of measurement tools and standards for performance. A clear example of this principle is the whole constellation of ideas and methodology that attend to the issues of continuous improvement. In this domain, data and information become the "breakfast of champions." Transactional leaders must become adept at developing metric formulations for all aspects of performance in their organization. When more knowledge and information about process and performance can be developed within an organization, greater leverage can be applied to make the achievement of well-defined performance objectives inevitable. Managing the knowledge and intelligence generated in a high performing organization is a huge task. Administrating, documenting, sharing, and archiving vital information is key to the success of any organizational endeavor. For these reasons, it is important for transactional leaders at every level to have an integrated knowledge management strategy as a system for building a more capable organization. The key directional ideas of transactional leadership are:

  • Clear boundaries - having clearly defined boundaries between role and function, technical process, span of control, decision rights, and domains of influence allow transactional leaders to control and manage interactions to drive desired business results

  • Order - for the transactional leader, everything has its own time, place, and usefulness to the process. By maintaining a highly ordered system of interaction, transactional leaders can drive predictably uniform outcomes systematically over time.

  • Compliance - this aspect of transactional leadership focuses on the need to comply with mutually defined operational guidelines and methodologies in every aspect of the business system. Deviation from procedure, methodology, and process guidelines are viewed as problems to be resolved and eliminated in order to drive predictable uniform outcomes.

  • Willfulness - striving to impose order and control on an otherwise chaotic and uncontrollable environment is a driving force behind transactional leadership

From a behavioral standpoint, leaders must strive to build capacity within the organization to leverage its people, process, and technology in order to achieve the mission and goals of the business. Leaders must clearly communicate the goals and intended outcomes to be achieved to everyone within his/her span of control and influence. Leaders must also create an environment where everyone's ideas are heard, valued, and applied to improve performance and success at the bottom-line. The drive for predictable sustainable results is an intrinsic motivation of a transactional leader.

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