The Compliant, Structured Transactional Leader

This article is part IV of our 12-part series on the different leadership styles. You can check out October’s Monthly Huddle to get a general overview and follow along each week as we explore them in-depth. 

Transactional leaders are traditionalists. They believe in the top-down approach to leading, effortlessly orchestrating large groups of people under the guidance of a clear set of rewards and consequences.

What Defines a Transactional Leader?

Transactional leaders demand results. They don’t believe in gimmicks, motivational speeches, or flexible scheduling. They expect their workers to do what they say when they say to do it and within the established parameters.

They like to control every part of the system, keeping everything organized and rewarding those who support the metaphorical machine running efficiently. The team’s goal should be following directions, nothing beyond that.

Personality

Transactional leaders rely on organization and compliance. They want to maintain equilibrium, so anything that upsets the balance is quickly addressed and corrected. 

They prefer not to micromanage, so their goal is to create a set of standards that leave no room for misinterpretation. 

It’s often hard to get to know a transactional manager, as they are more concerned with evaluating, correcting, and praising work than understanding the person behind it.            

This type of leader tends to be a “straight-shooter” and may struggle to show empathy. They communicate very directly, and it can sometimes come across as harsh or unyielding.

The majority of military officers are transactional leaders. They expect respect and rule-following from the beginning and value “compliance without questions.”                                                                                                                                                                                                                                                                                                            

Decision-Making

In transactional leadership, the leader often feels that they are in their position because they are more intelligent, more experienced, and more qualified than the people around them.

Because of that, managers with a transactional leadership style don’t take too kindly to having their decisions questioned. Often, they aren’t interested in anyone’s input or opinions but instead rely on precedents or flowchart-style thinking. 

While it might seem a bit cold and calculating, it ensures that the decision lends itself to the business’s overarching goals. 

Situations Where a Transactional Leader Thrive

• In a crisis, transactional leaders are at their absolute best. Not only do they excel at “getting all the ducks in a row,” but they are also excellent at making quick decisions. When everyone feels hectic and frantic, a transactional leader will have a clearly defined checklist for you to follow. 
• If there are already established procedures in place. For a transactional leader, the structure and steps of a business is their bread and butter. They do just about anything to see results, so the opportunity to dive in and increase efficiency without having to re-invent the wheel is a real treat for them. 
• In manufacturing positions, where creativity means little to the team’s overall success, transactional leaders can be extremely successful.  

Wrap Up: The Pros and Cons of Transactional Leadership

While transactional leaders sound particularly harsh, in reality, there’s always a time and a place where this strategy is ideal. Transactional leaders are the answer if a business needs help establishing and maintaining structure. 

Pros

• Those who like extrinsic motivation and thrive in structured environments will most likely feel very secure working under a transactional employer.
• Leave very little room for a “grey area,” which helps teams see clear paths towards goals. 
• Can turn around a failing business efficiently by ensuring each person is doing exactly what is needed– nothing more, nothing less. 

Cons

• Transactional leadership does not help cultivate growth, only maintaining the status quo. 
• Creativity is not a quality they particularly want to see in their team. They’d rather everyone keep their focus on the task at hand. 
• Tend to punish, not reward, personal initiative. “Going the extra mile” isn’t necessarily a positive to a transactional leader.