Leaders and Culture

What’s the defining difference between leaders who are at the helm of poor cultures and those at the helm of great cultures? It really comes down to the type of leader; leaders of poor cultures tend to simply transact business while leaders of great cultures transform organizations.

Transactional leaders are effective at managing the day to day operations of an organization. These leaders tend to be adept at administrative managerial tasks and are quite knowledgeable about organizational processes, procedures and the importance of adhering to organizational policies. Often change and conflict avoidant, these leaders are most effective managing the status quo. They draw their inspiration inward and toward the past; what’s happening at my company, how did we handle this issue in the past? New programs, processes or procedures are viewed skeptically. Often these leaders have little interest in trying new things for fear that innovation may be disruptive to the operation.

The questions asked by transactional leaders are most often tangible and concrete; “How much will it cost? How long will it take? What is the resulting benefit or profit?” The questions transactional leaders ask are not poor questions they are simply the wrong questions. It’s a question of altitude and timing. Once the transformational questions are answered then it is appropriate to hit the tarmac, not before.

Leaders at the helm of organizations with great cultures transform organizations. These leaders are willing to make revolutionary organizational changes through calculated risks to move their organization to the next level. They draw their inspiration outward and forward. They are focused on what is happening in the marketplace, what their clients want, and what their competition is up to. Innovation is nurtured in the culture through recognizing and rewarding employees who contribute forward thinking ideas. These leaders are also willing to scrap innovations that simply aren’t working. The “We’ve always done it this way” reason is not good enough for the transformational leader.

When a new program/product, process or procedure is introduced the transformational leader asks, “Why should we do this? How does this support our mission and values? What will be the impact to the client and the employee? What have other organizations done in this area? Who in our organization has experience in this area?” A sense of patience and deliberation permeates the discussions of transformational leaders as well as respect for the talents, experiences, and thoughts of those throughout the enterprise.

The contrast between these two leadership styles is stark. Transactional leaders, intent on maintaining the status quo, create an organizational culture that squashes innovation and personal contributions. The leaders are thought of as having all the answers and employees are often viewed as expendable. In contrast, transformational leaders are innovative and inspiring. Their charisma and forward thinking approach to organizational challenges and opportunities create a culture of employee participation and engagement.

What type of leaders guide your organization; predominately transactional or transformational? As always, I welcome your feedback and comments!