Why Leaders with a Transactional Style Don’t Achieve Transformational Results

Transformational leadership is a leadership approach that seeks to inspire and empower others, rather than simply trying to control them. This approach can produce dramatic results for an organization by generating high levels of commitment, creativity, and productivity from its followers. Transformational leadership has two dimensions: (1) their level of warmth or concern for the people they lead and (2) their level of intellectual stimulation or use of new ideas in relation to the people they lead.

On the other hand, a transactional leadership approach focuses more on maintaining order and getting work done through a system of rewards and punishments. It does not create a sense of loyalty among employees because they are not offered much beyond compensation.

Richard Branson, the Founder and CEO of the Virgin Group, is a transformational leader because he is interested in fostering leadership skills and creativity among his employees. He seeks to inspire others, rather than simply control them. For example, when Richard’s Virgin Atlantic Airlines was struggling financially during the global recession of 2009, instead of firing workers or hiring consultants like other CEOs might have done under similar circumstances, he flew to London and he spent the next few weeks checking in on every aspect of his company, asking employees for their ideas on how to save the business.

Transactional leadership focuses more on maintaining order and getting work done through rewards. There are many examples of transactional leadership in business. One example is a CEO who assigns employees tasks and then closely monitors their performance on those tasks, specifically to determine if they will be able to keep their jobs or not. This CEO uses rewards and punishments in order to achieve results, and often, their actions benefit themselves more than the employees.

As you can see in the example above, transactional leaders are inherently more short term focused and are oriented towards immediate results. This can lead some transactional leaders to prioritize a short term benefit at the detriment of longer-term goals. Simon Sinek shares the example of publicly traded companies who go through rounds of layoffs to make quarterly numbers. While the companies may “make their numbers,” they do so at the cost of psychological safety and long term profitability.

True organizational transformation, like pursuing excellence in customer service, operations, or innovation, involves focus, discipline, leadership, and time. There is no “Get rich quick scheme” in transformational leadership.

Organizations that pursue transformational goals need transformational leaders. These are leaders that set a bold vision and build high-performing teams, follow principles that promote psychological safety, and empower people to achieve their vision.

There is a still a role in organizations for transactional leaders, which is a topic for it’s own post, but they are fundamentally ill-equipped to achieve bold and lasting organizational transformation. Creating bold transformation actually requires the leader to release control by empowering others and trusting that people are doing the right things even when you cannot measure it.

Transformational leadership offers a vision that gets people energized and committed to achieving organizational goals.

Transformational leaders embody the principles of psychological safety by creating an inclusive environment where all employees feel valued, regardless of their position in the company hierarchy. Having transformational leaders in leadership roles will help organizations achieve their full potential. These are the individuals who will leave a powerful legacy by creating meaningful and impactful change.

KEY TAKEAWAY: Transformational leadership is a powerful way for leaders to motivate and inspire their followers. In contrast, transactional leadership can be used as a tool by those in power who want to maintain control over followers through incentives or punishments—but these tactics do not provide long-term results. To achieve real transformation, leaders need to be transformational leaders. A transactional leader will not be able to truly achieve transformational goals.

Legends never die

Remember kid, there’s heroes and there’s legends. Heroes get remembered but legends never die, follow your heart kid, and you’ll never go wrong.

Babe Ruth’s Ghost from The Sandlot

Over the 4th of July, I turned on one of my favorite movies, The Sandlot, which is a story about friendship, community, and baseball. I have probably seen this movie hundreds of times, mostly wearing out the VHS tape at my parent’s house when I was a child.

One of my favorite scenes in the movie happens when Babe Ruth’s ghost visits one of the main characters in the movie, Benny “The Jet” Rodriguez in a dream. The ghost leaves Benny with these words, “Remember kid, there’s heroes and there’s legends. Heroes get remembered but legends never die, follow your heart kid, and you’ll never go wrong”.

Heroes, of course, are people. We look up to them, we learn from them, and we follow their example. But like all people, they are mortal and will eventually pass away.

Legends, or stories, however, are different. It brings our memories to life and they create powerful feelings of interconnectedness.

This difference between heroes and legends has become even more clear to me recently. A few months ago, I bought an ancestry DNA kit and have used it to build out my family tree. It is a wonderful exercise and one I recommend for everyone who wants to learn more about their heritage. Through ancestry, I was able to map back three generations. But what are simply names in census data can “come to life” once again through stories.

For example, my great grandfather, Herman Sachs, was a talented painter. Before he passed away, my grandfather, Arnie Sachs, told me a story that Great-Grandpa Herman asked him one morning what color he wanted his room to be painted. My grandfather answered smartly, “knotty pine,” and when he arrived home his room looked like the inside of a tree!

When I think of that story, in a way it brings my Great-Grandpa Herman back to life, in a way. He has become more than a name now for me. The story gave me some color-commentary, an indication of his personality and talent. The “legend” gives me a lens into who he was and it is a story I will pass down to my own son, Aaron. Stories like this one makes me realize that for so many of my other relatives, I have only names, a small piece of who they were without the legend. While it is hard for me to remember most of their names, Great-Grandpa Herman’s is one I will always remember.

As leaders, the stories we tell (and are told about us) are powerful influences on how we accomplish our goals. Stories that we tell can help us contextualize the direction we set, and can be used to cement that direction to our teams’ collective memory. Stories that are told about us can either inspire confidence, faith, and trust, or they can work against us. That is why leading by example is so important, as those are the stories the team tells each other about us when we are not present.

The more leaders can integrate storytelling into their presentations and other methods of communication, the better their teams will be able to follow and spread the important messages. A good story has an exponential effect when it is told multiple times to better reinforce and embed it into the culture.

If you are a leader, the legends you tell will endure as part of the fabric of your organization. Further the legends that are told about you will be your legacy.

Knowing the power of the story and its enduring capabilities, what will you do next?

KEY TAKEAWAY: Storytelling is an important tool in a leader’s toolbox. It can help them spread the message and create a positive team culture. It can also work against them if they are not leading by example.

How neurochemicals can help you lead and be innovative

Welcome back to Leadership as a Practice. I wanted to first start by sharing that I have missed writing and hearing from you about the content of this blog. I intend to be writing far more consistently and am filled with optimism as we come out from under the worst of the COVID-19 pandemic.

Today, I wanted to share something I learned recently through The Innovative Healthcare Leader program at Stanford University. I found it interesting that the program was a week-long but only discussed design thinking on one day. The rest of the program was devoted to becoming an innovative leader and shifting the mindset of an organization so teams can think creatively as well.

One of my major takeaways came from Professor Baba Shiv, who spoke about a framework he developed called “The X Framework.” A version of the framework is posted online and shown here:

The idea behind the framework is that people have three neurochemicals that change their mood, behavior, and willingness to tolerate risk. Coritsol, the stress neurochemical, gives us a very low risk tolerance and low creativity. The response triggers most people to recoil, shut down, or seek familiarity/status quo. Serotonin is the neurochemical that reflects comfort. Serotonin is the chemical that gets released when you kiss a significant other, for example. Finally dopamine is the neurochemical that activates excitement or creativity.

Much of these neurochemical concepts and how they relate to leadership are covered by authors like Simon Sinek. Shiv’s contribution has to do with the conditions needed for innovation and creativity. In organizations that are high stress, creativity tends to be very low because levels of cortisol are high. When cortisol levels are high, dopamine is blocked from being released. To get to a situation where dopamine can be released, people must have a sufficient amount of serotonin release first.

That is why the concept of psychological safety is so important to both innovation and leadership, more broadly. If you believe, as I do, that the people closest to the work know the work the best and are therefore in the best place to improve it, they will not be able to do so in an environment that consistently increases their cortisol levels.

During his seminar, Shiv argued that one of the primary human motivations is “Social consequence,” which is the need to save face and maintain social standing. For example if a superior calls you out or humiliates you in a meeting with your peers, that would be a negative social consequence and produce a significant cortisol release leading to de-motivation.

According to a recent survey by McKinsey and Company, Psychological safety is, “When employees feel comfortable asking for help, sharing suggestions informally, or challenging the status quo without fear of negative social consequence.” Psychologically safe workplaces exist to keep the team’s serotonin levels high, providing abundance (think free food options at google), recognition, and gratitude. According to Shiv and the McKinsey survey, these organizations also tend to be more innovative and open to taking risks, including adapting to change.

If you are a leader looking to create change and unlock the creativity of your team, look for ways in to keep their levels of stress low and of psychological safety high. Innovation depends on a culture that can support positivity and safe-to-fail experiments.

KEY TAKEAWAY: Do you want to lead an innovative organization? Look for ways to keep your teams stress low and psychological safety high.

“Be curious, not judgmental” – Walt Whitman

Like some of you reading this post, I used to watch a lot of television, but I have cut most of it out over the last few years. The main exceptions are if my wife and I get into a show together and watch one episode per night or watching live sports. During the pandemic, this pattern really has not changed, as I have enjoyed spending time reading and playing with my son.

Not only can watching television be a big time waster, it can also be a source of stress, especially 24 hour news channels, which I actively avoid. Furthermore, I have often worried about Hollywood’s glorification of rude jerk personalities, like Dr. House and Ari Gold from Entourage. One of the final straws which led me to limit my TV-watching was the juxtaposition of the optimistic portrayal of public service through shows like The West Wing in the early 2000s, to the ultimate in cynicism shown through political dramas like House of Cards, which premiered around 10 years later. Every time I would turn on the television, I would see more glorification of the “love-able jerk” characters, which just does not align with my values.

But then much to my surprise, in walks Ted Lasso. If you have not seen the show, Ted Lasso is on Apple+ and I highly recommend it.* In short, it’s the story of an American college football coach who is hired to coach a premier league soccer team in England. Without giving too much away, the Ted Lasso character, played by Jason Sudeikis, is optimistic and resilient, the ultimate “good sport.” Every Friday, I excitedly wait for the next episode, sometimes using the excuse of my son rising early to get my early morning fix before starting the rest of my day.

A recent episode had a moment in it that taught a very important lesson and made me reflect and go deeper.

Take a look:

Instantly, the story and the Walt Whitman quote, “Be curious, not judgmental,” struck me both intellectually and emotionally. I started to consider how often I rush to judgment, and whether doing so was actually serving me well, or limiting me when trying to reach my goals.

Our minds are meaning-making machines, constantly making assumptions, judgements, and looking for patterns. This is not an inherently bad trait – it kept humans safe as we evolved for a very long time. However, interpersonally these same tendencies may not serve us as well. Our internal narratives can be filled with bias, can be self-destructive, or can result in hurting someone else. At the end of the day, our judgments can be the lens through which we understand the world and that lens is foggy at best, opaque at worst.

So what would happen if we replaced our judgments with curiosity? What would that world look like? And what would a workplace like that feel like?

These are all questions that have been on my mind since reflecting on this powerful quote from Walt Whitman by way of Ted Lasso. I have found that I need to check myself all the time to try be more curious rather than judgmental. In doing so, I have found that it is amazing how many of my assumptions are actually wrong. I’ve also learned that being curious is much more enjoyable, light, and energy-saving than being judgmental.

The more we learn about something, the more we open ourselves up to different points of view, and the more we question, the more truths and wisdoms we will learn. Leaders must continue to pursue truth and wisdom as the world continues its fast pace of change. It serves leaders to be curious, to not judge, and to not rely on what has worked in the past.

How will you be curious, not judgmental?

KEY TAKEAWAY: We all have so much to learn and being judgmental can shut us off from truth and wisdom. “Be curious, not judgmental” – Walt Whitman.

*Note: Ted Lasso is rated TV-MA for those who may want to screen before watching with families and young children.

Update: Family strategy

On January 14th, I wrote a post about leading the “Most important organization in the world,” about leading a family.  At that time, I shared that my wife, Sheryl, and I put together our own family strategy that I would share at a later date.

Well, that later date has arrived with an extra twist! Sheryl and I had our first family strategy centered around preparing to become a family of 3. Our son Aaron was born a healthy 7lbs 5oz on April 13th, bringing us incredible joy during a time of incredible uncertainty. Aaron’s arrival and impact on our family has been immediate, and caring for him has been a welcome distraction.

Before we knew much about the novel coronavirus, Sheryl and I had a dinner date night and put together our family strategy, including our “rallying cry,” “defining objectives,” and “standard objectives.” Our strategy describes how our family is different. Our “rallying cry” is a short term focus, while the “defining objectives” are the steps to achieve the “rallying cry”. Finally, “standard objectives” are lasting areas of importance that our family has determined to be pillars of importance.

So here was our completed strategy board leading up to Aaron’s arrival (he was affectionately known as “Gummy Bear” before his arrival):

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For us, our family strategy is defined at the bottom of our board, which lives on display in our living room (it’s been a hit at dinner parties!). Our strategy is, “We are a family that is driven and goal oriented. We grow and change while always prioritizing faith, family, friends, and compassionate active listening. We are genuinely curious about our world and contributing to make it a better place.”

Our rallying cry, “Prepare for Gummy Bear” included the defining objectives of preparing his room and play room, getting stuff for him (like a car seat and stroller), taking the parenting classes, figuring out daycare, selecting a pediatrician, and establishing a birth plan.

Our standard objectives, which remain are managing financial health, physical health, spiritual health, the quality of our marriage, pursuing education, socializing, and fun.

Every week, Sheryl and I meet for about 5 minutes to assign tracking to each of the objectives. Red dots mean not accomplished this week, yellow means in progress, and green means complete. During the COVID-19 pandemic, achieving green status for the the social life standard objective has been especially hard due to social distancing.

Sheryl and I were both excited to create and deploy our family strategy. Having witnessed a couple of frantic family dynamics, it was our goal to get ahead of it and Lencioni’s model fell into our laps coincidentally. However, investing the time in developing a strategy and meeting about it weekly has been highly valuable for us. I find that the activity keeps us focused and grounded at home, just as work plans do for me professionally.

I really cannot recommend the activities of developing and tracking a family strategy highly enough. It helped us immensely, even in this time of social distancing, to prepare as first time parents bringing a newborn home with no physical help. Without it, it likely would have been a much harder road for us. Contrary to what we though, the first 3 weeks of Aaron’s life have been pure joy, with some sleepless nights thrown in.

You have the time right now during social distancing to create a family strategy. Everyone is home and looking for something to do. Go ahead and try it. Use The 3 Big Questions for a Frantic Family to get started. All the whiteboard materials are an easy order from Amazon. Happy strategizing!

As always, if you have any questions, please contact me.

Key Takeaway: Creating a plan and keeping it top of mind is the pathway for success in both business and with our families. Now is a perfect time to develop a family strategy and then to implement the objectives required to meet your goals.