Make Your Leaders Transformational, Not Transactional

It goes without saying that modern business leadership is complex. Gone are the days of the command-and-control style of leadership, where an individual’s experience and expertise provided the requisite skills to steer a business forward. Modern business leadership, at least in the majority at the executive level, is no longer viewed as a transaction.

Technology’s progress as a learning and communication vehicle has rendered transactional leadership obsolete, making way for a transformational leadership profile built on trust, influence and openness, said Jean Pierre Gagnon, a former learning executive with Merck & Co. Inc. and a CLO doctoral student at the University of Pennsylvania.

Further, the proliferation of managing in virtual environments has increased the need to develop transformational leaders. Transactional leadership, Gagnon said, is utterly ineffective in the digital world, where emotional intelligence is an especially important skill and team members are likely to be located across the world.

“A good leader will always be self-aware and socially aware of their environment,” said Gagnon, who is writing his dissertation on the difference between transactional and transformational leadership. “That’s a quality we [as learning leaders] don’t tend to look at. So if you’re in charge of talent management, the selection of your people becomes very important.”

Once you’ve selected who might best fit a transformational leadership profile — usually someone who has shown an ability to motivate and inspire across these multiple dimensions, Gagnon said — developing these leaders requires learning far beyond what can be taught in a classroom. Experiential assignments — those that provide would-be leaders with real-life challenges that force them to think critically and manage virtually — are best to develop transformational leaders.

“You [as a CLO] have to create experiences and opportunities for leaders to really gather some personal insight and really reflect,” said Rose Gailey, a consultant with Chicago-based leadership development consultancy Gagen MacDonald. Reflection and self-awareness, she said, are two imperative qualities that transformational leaders must have, given the scope and speed of global business.