Transformational Leadership

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

/ Jonathan Sachs

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.

“Be curious, not judgmental”

/ Jonathan Sachs / 2 Comments

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 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 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?

The practicing leader quote - be curious not judgmental Ted Lasso

Leadership Lessons Learned

We all have so much to learn and being judgmental can shut us off from truth and wisdom. “Be curious, not judgmental“.

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

Subscribe

If you enjoyed this content and are looking to explore leadership together in new ways, please sign up for the Practicing Leader email list here:

Transformational leadership and Starbucks

/ Jonathan Sachs / 4 Comments

Over the next few weeks, I am going to be writing a series on transformational leadership. In my next post, I will define the concept as well as an alternate style called transactional leadership. To kick off the series, I wanted to illustrate the hallmarks of transformational leadership through the story of one of my favorite transformational leaders: Howard Schultz, the founder of Starbucks.

Embed from Getty Images

Howard Schultz is a transformational leader because of the way he developed a vision and then made it into a reality in partnership with Starbucks’ other employees. His vision was for Starbucks to be a “third place” between home and work and that Americans would pay $3-5 for a cup of coffee. Schultz used his charismatic personality and values to develop a transformational work environment at Starbucks that built a coffee empire. He uses motivation, influence and referent power to overcome business obstacles and achieve shared success.

Evidence of Howard Schultz transformational leadership qualities are a key component of the Starbucks operation. In the most obvious example, Starbucks refers to all its employees as, “partners” and offers them stock options and health care benefits (for both full and part-time employees) . He writes, “From the beginning of my management of Starbucks, I wanted it to be the employer of choice, the company everybody wanted to work for.” Schultz realized that leadership was about the people at the front lines doing the work to bring his vision to reality. He focused on the employees and used his strong motivation and influence skills to achieve his vision.

Schultz has also demonstrated the ability to motivate his employees both in terms of direction and emotional intelligence. On the first day Starbucks was in business, Schultz went to address the other Starbucks partners. He had three points written down on a 5-by-7 note card that read, “1. Speak from my heart. 2. Put myself in their shoes and 3. Share the Big Dream with them.”

When the response to Schultz’s first speech was a combination of skepticism and guarded optimism, he recognized what he needed to do. Schultz knew he had to develop referent, expert and position power in addition to his legitimate power role as the CEO of Starbucks. He used the tactics of shared benefits, consultation and collaboration, emotional calibration and consistency to motivate his new employees. He writes, “The only way to win the confidence of Starbucks’ employees was to be honest with them, to share my plans and excitement with them and then follow through and keep my word, delivering exactly what I promised – if not more.”

Schultz focused on outcomes, satisfaction and trust to build employee commitment to Starbucks, which minimized turnover and retained employees who were aligned to the vision and brand for Starbucks. He writes, “A business plan is only a piece of paper, and even implemented properly [is not complete] unless the people are committed to it with the same heartfelt urgency as their leader.” When Starbucks lost its way, in Schultz’s eyes, he closed all Starbucks locations temporarily for mandatory training, including lessons on how to make the perfect espresso shots.

Schultz has impacted not only the Starbucks partners who have grown and thrived with the company, but also the patrons of Starbucks. In his book Onward: How Starbucks Fought for Its Life without Losing its Soul, Schultz describes the reactions of patrons when they learn that their neighborhood Starbucks was closing due to the suffering performance of the company, when, at one point, it was nearly at the brink of bankruptcy. They felt the loss on a deep emotional level because of what the store meant to the community. Schultz describes stories where people reacted emotionally to the announcement that the store they frequent was closing. One woman in Minnesota wrote, “I can’t believe that ‘my’ Starbucks is closing. You never know how important a place is until you are about to lose it.”

The impact of the Starbucks that Schultz created has also impacted me personally. In fact, I have written portions of this post from a Starbucks. It is incredible to me to witness what Schultz visioned coming to life in front of me. I was recently in one of the first Starbucks locations on the East Coast in Friendship Heights. The layout, the service, and the atmosphere was exactly how Schultz would have described it to a potential investor, partner or customer. There was a romance to the coffee service, and sitting there doing work at a table and drinking from my own personalized cup of coffee was surely a small but meaningful luxury. Knowing how much work it took Schultz to achieve that vision, including overcoming many skeptics and frequent trips to Italy, made the taste of my peppermint mocha even sweeter.

KEY TAKEAWAY: Transformational leaders pursue an important vision by empowering people to be a part of something larger than themselves. Leaders like Howard Schultz lead through respect and empowerment.

Subscribe:

If you enjoyed this content and are looking to explore leadership together in new ways, please sign up for the Practicing Leader email list here:

Your reputation precedes you

/ Jonathan Sachs

The bible tells the story of two brothers, Jacob and Esau. Their story sheds light on how we develop reputations. As Rabbi Mordechai Kamenetzky points out, both Jacob and Esau have their names changed in the story. Jacob’s name was changed to, “Israel” after outsmarting his uncle, Laban, fighting with his brother Esau, and battling an angel. For Esau the story is different. Esau’s name was changed as well to what is loosely translated as, “Blood-hungry Wild Man” simply for the way that he asked for some of his brother’s red lentil soup.

Rabbi Kamenetzky asks, “It is quite disconcerting. Each brother had a name change. But [Jacob] had to have his hip dislocated, he had to battle an angel. All [Esau] had to do was slurp some soup, and he acquired a demeaning name for eternity. Is that fair?”

Embed from Getty Images

While it may not be fair, it is an important lesson in life, especially for leaders. It is much harder for a leader to positive a reputation than it is for them to earn a negative reputation. For example, I remember a colleague of mine once giving me some good advice: “In managing people, there are no throw away lines.” Lack of clarity can throw a team into chaos and this sentiment could one day evolve into a leader developing a reputation for being a bad communicator, for example.

The solution to managing our reputation is self-awareness and the ability to control our emotions. We do that first by being intentional about what we are trying to accomplish and what reputation we need to accomplish those goals. For example, as a leader, I feel that it is a regular part of my job to remind my team that I am a human-being and that I make mistakes. In being transparent, my goal is to help build a team culture where we give everyone the benefit of the doubt (this only applies for team members without performance issues – that’s a different topic) so problems come to the surface to be solved. At the same time, I need to balance this by being self-aware about over-sharing, which could cause undue stress to the team.

In contrast to self-awareness and emotion managing, some leaders have a reputation for being pushy, unreasonable, and generally challenging to work with. However, they develop a reputation that, in spite of their behavior, “they get things done,” which justifies keeping that person in a leadership role on the team. That reputation can hurt a leader in a role with transformational goals because the leader’s reputation is that they cause havoc among teams, but the ends justify the means. That kind of transactional reputation undermines the leader’s abilities to be successful in achieving transformational goals, as the culture will be inherently more resistant to any suggestion made by a bulldozing leader, as it would be seen as more hierarchical than transformational.

Regardless of the specific line of work, a leader’s reputation precedes them. People will always talk about the leader, and whether a leader can control it or not, he or she will always have a reputation. Even the bible tells us that it is easier to earn a negative reputation than a positive one. It is for this reasons that leaders must become self-aware and manage their emotions, so that they can manage many different situations without being burdened by a negative reputation.

KEY TAKEAWAY: If you are a leader, you already have a reputation. Is it a good one or a bad one? If you could be an invisible, “fly on the wall,” what would people say about you? How does that help or hurt you accomplish your goals?

Subscribe and Share

Don’t miss out on more insights and tips for becoming a successful leader! Subscribe to our newsletter today to receive regular updates and exclusive content straight to your inbox. Join our community of like-minded individuals who are passionate about leadership and team building. Sign up now to stay ahead of the game!

If you enjoyed this content, please share it with another practicing leader. Thank you for doing so.