Transformational leadership: 5 big mistakes execs make

Working to become a transformational leader who inspires people amid great change? Avoid these common missteps
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Plenty of misconceptions exist about leadership – especially transformational leadership, a popular concept in the age of digital business. Transformational leaders are masters of relationships and help people flourish, as Hugh Blane, president of Claris Consulting, recently told us. But what do people commonly get wrong as they strive to become a transformational leader?

Here, Alison Eyring, Ph.D., founder of Organisation Solutions, an organizational psychologist and adjunct associate professor at the National University of Singapore Business School, shares common mistakes she sees well-meaning executives make:

1. Not understanding transformational vs. transactional

“Leaders with a transactional style focus on setting goals and holding people accountable for those goals,” Eyring explains. “In a way, this is ‘carrot-and-stick’ management because you may administer rewards or punishment based on performance.”

Leaders with a transformational style go beyond that style, she says. “They focus on motivating employees by sharing a vision or setting high standards. They also take risks, focus on what is important to the organization, and build strong relationships by coaching and developing their direct reports.”

Another way to look at it, she explains, is that transactional leaders are more task-focused, while transformational leaders are more people-focused.

2. Failing to develop both leadership styles

“Most leaders are [neither] purely transactional nor purely transformational,” Eyring notes. “If you set specific, measurable targets, give feedback and reward strong performance or hold people accountable for poor performance, you are practicing transactional leadership. Although not all leaders do this well, most practice at least some amount of transactional leadership by following a performance appraisal process.”

[ For more insight on team dynamics, see our related article, How to be an ageless IT leader: Managing multiple generations. ]

At the same time, she adds, when you have one-on-one meetings with team members where you spend time learning about their issues, coaching them, giving them “stretch” assignments, and sharing your vision with them, these are transformational leadership techniques.

“Instead of thinking about whether to use transactional or transformational leadership, leaders should focus on practicing both styles as well as they can. You can be a great or a terrible leader in both transactional and transformational styles.”

3. Not understanding which style to use, when

Each leadership style will help you achieve different objectives, Eyring says. “Transactional leadership has its strongest impact on an employee’s job satisfaction and individual performance metrics. We know from decades of research that setting goals and giving feedback drives performance, and transactional leadership is all about setting goals and giving feedback.”

Transactional leadership is especially helpful if you’re trying to achieve specific metrics such as revenue or cycle time, she says. “If you have a poor performer, focus on transactional leadership to help the person focus their efforts and get results.” Make sure to track the employee’s metrics and recognize performance progress when it happens, she adds.

Use transformational leadership skills when you want to motivate employees and inspire greater commitment. “People want to work for leaders who inspire, challenge, and develop them,” Eyring says. Transformational leadership can help with employee engagement and retention, she adds. “If someone is struggling with work-life balance or is not sure about the future, focus on transformational leadership skills to help get them back on track or to challenge them to grow.”

Transformational leadership can help with employee engagement and retention.

But be careful, Eyring advises – some transformational leadership techniques can actually harm employees’ performance. “For example, leaders with a laissez-faire or hands-off approach impact performance negatively,” she says. “I’ve seen some leaders over-empower to the point that they don’t give direction, advice, or coaching. Performance can dip because employees have no structure or support for their work.

4. Making one-on-one coaching too transactional, or team coaching too transformational

“Some leaders focus all of their one-on-one time discussing tasks and challenges,” Eyring says. “The problem is that this overly weights time on transactional leadership. To correct this, they need to spend more time in one-on-one coaching, doing check-ins on how things are going, and having career discussions and development updates.”

At the same time, some transformational leaders don’t adequately address specifics during team meetings. “Other leaders focus on being inspirational and motivational and building relationships in their team meetings. These leaders can better focus team meetings on key metrics and recognizing progress against these,” Eyring says.

5. Thinking transactional leaders are “just managers”

“When transformational leadership was first discussed in the media, those with a strong transformational style were equated with being leaders, and those with a strong transactional style were equated with being managers,” she explains. “Many companies still say, ‘we need great leaders, not managers.’ This has done great damage to leadership!”

Instead, Eyring says, consider what the best CEOs do. “They set a vision and challenge the organization’s thinking. That is transformational. They also set high targets and hold their direct reports accountable for achieving these targets. That is transactional. Great CEOs get both right. Bad CEOs may only get one right.”

The best leaders at every level need to practice both types of leadership, she advises. “Always seek to improve in both areas.”

Minda Zetlin is a business technology writer and columnist for She is co-author of "The Geek Gap: Why Business and Technology Professionals Don't Understand Each Other and Why They Need Each Other to Survive," as well as several other books. She lives in Snohomish, Washington.