What is one characteristic of a transactional leader?
To help you better understand transactional leadership, we asked business leaders for their insights. From focusing on results to outlining expectations, here are several characteristics and attributes of transactional leaders.
Here are 10 characteristics of a transactional leader:
- Focuses on Results
- Prioritizes Company Needs
- Requires Clear Communication
- Understands Team’s Skillset
- Thrives on Rules and Guidelines
- Implements Practical Solutions
- Excels at Daily Operations
- Outlines Expectations
- Prefers Measurable Goals
- Feels Averse to Change
Focuses on Results
A transactional leadership style is results-driven. It focuses on employee performance as a measure of success that is established based on organizational goals. This type of leadership also hinges on a reward-penalty system in which an employee’s individual performance is closely examined.
Because of the reward-penalty system, it’s critical for these leaders to set clear expectations and review an employee’s progress toward goals in performance reviews. Support for employees can include mapping out big goals into achievable short-term goals to help ensure success.
Chris Abrams, Marcan Insurance
Prioritizes Company Needs
Transactional leadership centers more around a reward-punitive system. However, this isn’t necessarily a bad thing as transactional leaders must possess a strong sense of morals and a certain level of calm and even keel. Transactional leaders tend to operate towards the values and needs of the company as absolute, in turn making them the people that want to promote the intrinsic motivation of employees by rewarding those that adhere to the needs of the company.
This requires someone that is able to keep a level head in situations and stick to their guns so to speak. This is not always an easy type of leader to be, even though some might see it as the default.
Carey Wilbur, Charter Capital
Requires Clear Communication
In order to be a transactional leader, one must be an exceptionally clear and efficient communicator. Because transactional leadership is based on results, making sure that those goals and expectations are followed to a T is important. Therefore, everyone needs to be on the same page.
This isn’t to say that transactional leaders can’t have a little bit of fun. Making sure everyone is on the same page doesn’t have to be boring by any stretch of the imagination. But poor communication can result in poor performance and no one wants to run into those kinds of problems. Have a little fun, but be exceptionally clear in what’s needed of the team.
Nick Santora, Curricula
Understands Team’s Skill Set
For a transactional leader to be most effective, they must be finely attuned to understand someone’s strengths and weaknesses. Because a transactional leader is guiding the whole towards accomplishing their common goals and wants those big results, it’s imperative for them to understand where some people operate the best and most efficiently.
This is not to say that people shouldn’t be stretched or shouldn’t try to acquire new skills. However, it’s the role of the leader to make sure that wherever they are placing someone, there is support and resources to help them excel, given the foundational skills they already possess.
Randall Smalley II, Cruise America
Thrives on Rules and Guidelines
One key characteristic of transactional leadership is the use of set processes and guidelines for doing the work. This works well for set tasks and onboarding new employees. Transactional leaders thrive on rules and regulations and often left-brained thinking.
While there is certainly a time and place (and industry) for this practice, it can limit the growth potential or finding better ways to accomplish the same task. Having standard operating procedures for high-risk tasks and for employees who need structure can be very effective. A good balance between transactional and transformational leadership is crucial. Knowing when to implement each style is a skill set of top leaders.
Jenn Christie, Markitors
Implements Practical Solutions
A transactional leader uses a practical approach that focuses on improving productivity and efficiency. These leaders know how to solve current problems using a transactional approach to help the company succeed. Creativity and innovation aren’t in the fold of this leadership style. An advantage of transactional leadership is that it eliminates any doubt or uncertainty regarding projects because clear guidelines and procedures have been set in place.
Michael Hennessy, Diathrive
Excels at Daily Operations
Great at following routine and structured tasks, transactional leaders have a very linear style of thinking. This comes in handy when performing day-to-day operations that require stability, groundedness, and sustainable effort. At the same time, it’s quite a disadvantage when leaders need to think outside the box, show flexibility, and search for unconventional solutions.
Tytus Golas, Tidio
Outlines Expectations
Transactional leaders have clear expectations and guidelines in order to run their teams smoothly. For example, people who perform well are rewarded, while those who step out of the boundaries a lot tend to be punished for breaking the guidelines.
This can be important with legal matters within a company, as the negative actions of one person, no matter how unintentional, can cause some serious damage to the rest of the company. Transactional leaders provide concrete incentives to follow the rules.
Annabel Love, Nori
Prefers Measurable Goals
Transactional leaders excel when objectives are clearly defined, and performance is easy to measure. In sports, where the roles and responsibilities of every player are explicit and measurable, transactional leaders can use financial incentives to motivate players to perform at a high level. In finance, where the objective is to maximize return on investment, transactional leaders can properly reward high performance for retaining talented employees.
Wesley Jacobs, Apollo Medical Travel
Feels Averse to Change
Transactional leaders are often opposed to change. They rely on things to be organized and orderly which makes them susceptible to being rigid in their desire to enforce and follow the rules. Maintaining the status quo is important to them.
Greg Hannley, Soba Recovery
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