Transactional Leadership – 4 Challenges of ‘Value’ Based Influence

Have you ever thought about the words we use to describe relationships? Our entire paradigm for how we relate to one another is economic. We ‘spend’ time with family. We ‘invest’ training and resources in employees. When we feel neglected by our spouse we tell them they don’t ‘value’ us nearly enough. I’ll get that promotion when my boss recognizes how much I ‘contribute’ to the team.

Seth Godin has said that leadership, at it’s core, is marketing and marketing is leadership. As leaders we’re selling a vision, an idea, a method, a system. We market our influence and hope someone will ‘buy in’. This economic model affects our approach to leadership at every level. It’s transactional in nature. Quid pro quo. I’ll follow you if I get something in return. You’ll follow me when you realize my idea has more than merit, it has value that will benefit you personally. They say all politics is local. Well, all leadership is transactional and everyone’s looking for an ROI (return on investment) that far exceeds the risk they take when they believe you.

What would happen if we changed the language of leadership? What if we stopped using the words of Wall Street to describe how a leader relates to others? Transactional Leadership relies heavily on 4 words that have more to do with economics than leadership. What if we replaced these 4 words with new words designed to inspire, empower and engage people?

  • Value vs. Respect
  • Invest vs. Serve
  • Buy-in vs. Trust
  • Contribute vs. Collaborate

These aren’t simply 4 contrasting ideas. They are a progressive pattern for how leadership works. They are guiding principles that build one on top of the other.

Value vs. Respect

The role of ‘value’ in transactional leadership is based on the idea that people follow the leader because the leader somehow adds value to their lives. The benefits could be social, political, economic or even spiritual. Followers follow because of the value the leader adds to them. The leader benefits from the value brought by those who follow him. It’s reciprocal and the leadership equation continues successfully unhindered as long as everyone can clearly see the benefit of the relationship. The problem with value based leadership is that it’s focused on one single idea, “What’s in it for me?” Don’t get me wrong. That’s not an inherently bad question to ask. People are in business to make a profit. The reason we want to improve our leadership skill is because we have this vision of a future that’s better for us and the people we lead. But, ‘What’s in it for me?’ can’t be the foundation of our leadership relationships. What’s in it for me is transient. What makes me happy from one moment to the next is dynamic. Therefore the value I’m looking for out of any given relationship is constantly changing. It’s why married couples can fall in and out of love. It’s why Coaches can be heroes one day and villains the next. You didn’t win the game. The value of this relationship has just been diminished. You don’t make me feel like you once did. It must be time to find a new partner in marriage.

‘Respect’ approaches relationships differently than ‘value’. Instead of leaders looking for what they can gain from others they recognize that every individual has intrinsic value apart from what they give to an organization. Out of respect for the individual the leader looks for ways to unleash the unrealized and untapped potential of those they lead. Instead of using people as a resource they challenge and inspire people to become more then they ever imagined possible on their own. Respect becomes the foundation on which a new kind of leadership is built. When respect drives the leader’s responsibility to lead and the follower’s willingness to follow the paradigm changes for how we relate to one another. Because of my respect for you I won’t treat you as a commodity or as a means to an end. Out of respect for you I have a responsibility as a leader to attempt to understand your hopes and dreams, to use my resources and experience to equip, encourage and empower you to fulfill your maximum potential. The follower has a responsibility here as well. Out of respect for those who lead the follower commits to serve the organization well. This service isn’t simply about a paycheck or promotion but about giving my best, being fully engaged with the responsibilities entrusted to me, and doing what’s right for the organization as a whole. Respect defines the way we relate in times of success, failure, conflict and cooperation.

Put simply, value looks for what’s in this relationship for me. Respect dreams of what’s possible for you as we serve together.

Invest vs. Serve

With Transactional Leadership once you’ve discovered the value someone provides you begin to invest your time and energy in that person or idea. This is like any financial investment. You expect to get something in return. But that’s not really the nature of an investment is it? You’re not pouring money into an IRA in the hopes you’ll get a little something in return. You’re hoping for more than you risked in the first place. You gage the value of your investment by how much compounding interest or residual income you are able to receive as a result of the risk you take. The same is true for transactional leaders. You invest in someone or in their idea because you’re convinced you’ll get more out of it than you put into it. But what happens if the investment doesn’t pay off? What happens when a leader invests in followers who don’t follow through? Think of the coach with the perfect game strategy leading a team of under-skilled players. It takes more than a winning strategy or remarkable talent. Both are necessary to win the game. We stop investing in others when we realize we’ll never get the return we’re looking for.

The Servant Leader approaches these relationships differently. Out of respect for the person, a servant leader chooses to meet that person where they are in order to take them where they should be. It’s not about an investment being made, but a responsibility fulfilled. As a leader you’ve been entrusted with the care of those you lead. When faced with an underperforming employee the Servant Leader recognizes an opportunity for growth. Conflict isn’t personal. It’s the resistance that builds the strength and the skill necessary to take the individual and the organization to the next level. Correction isn’t corrosive. It’s a reminder of the core values that define how we relate within this organization and what this organization is really all about. We serve by looking out for the needs of others and the needs of the organization we lead. For a servant leader no task is too menial, no job is too small. The transactional leader is focused on how to protect his investment. The servant leader is focused on meeting the needs of others.

Buy In vs. Trust

Once the Transactional Leader has begun to leverage the ‘value’ of his followers and started ‘investing’ in them, his next step is to achieve ‘buy-in’ from those who follow. For the Transactional Leader ‘buy-in’ is critical. Have you ever noticed the difference in the way employees and owners work? For owners, business is personal. It’s more than their livelihood, it’s an expression of who they are. But employees are different. For an employee a job is what they do, not who they are. When casting vision transactional leaders are looking for buy in. Buy-in is more than positive affirmation. It’s a whole-hearted acceptance of the vision cast by the leader. Buy-in is the difference between an owner and an employee. My uncle used to say, “When I was young I thought I wanted a career. Now that I’m old I realize I just wanted a paycheck.” Think about the things you ‘buy-in’ to. If you’re like me you’re a discerning shopper who looks for the best deal possible before making any kind of purchase. You’re not going to buy-in until you’re certain you’re getting the best value possible. And that’s exactly how followers shop for leaders. Which visionary leader will offer me the best deal? As the leader how can I package the vision so people will give themselves to it? Too often, striving for buy-in reduces the most beautiful of dreams down to a clever catch phrase and slick marketing, the heart of the matter lost one talking point, one sound bite at a time.

Trust is different from buy-in. Trust develops slowly and it’s affects are longer lasting. Trust grows from the seed of respect and blossoms in the refreshing waters of service. Trust is a two way street. Followers trust leaders who respect them and who serve well. Leaders trust followers who respect the significance of the work that needs to be done and who faithfully serve to fulfill their responsibilities.

Changing an organization based on Transactional Leadership can be difficult because the group has bought into an idea, a method for how things are done. In order to change direction the value of the new idea has to be sold to those responsible for guarding the current system. It’s a tough sell from the start.

In trust-based leadership I’m not simply following an idea or a method. I’m not serving a system. I’m part of something bigger than myself that’s made up of other individuals, men and women on whom I rely for my own success. It’s relational, not transactional. I trust that others in the organization are giving their best for the good of all and they can trust that I will do the same. When change becomes necessary it comes more easily, the merits of the new idea strengthened by the trust found in my relationship to those I lead and those who lead me.

Contribute vs. Collaborate

The Transactional leader is looking for contributors. Another word for contributor is ‘producer’. Contribute something to the project, the company, the team or find yourself in search of a new job. The need to make a contribution drives some to be back-stabbing, cold-hearted corporate climbers. While others simply settle in to lower circles of responsibility, their contributions limited to the minimum required amount of effort necessary to provide value to the team. Transactional leaders search for contributors the way entrepreneurs search for venture capitalists. What do you bring to the table? How can you bring more satisfied customers, design a better product or provide a better service? If louder, faster, higher is the mantra of the trumpet player, bigger, faster, better is the mantra of the Transactional Leader. There’s always one more sale to make, one more quota to break. Contribute or die and if you contribute the most we’ll give you a fancy gold watch!

Collaboration is different from contribution. Collaboration starts with the premise that I don’t know it all and I don’t have to. Collaboration relies on the fact that there are some things I’m naturally good at and other things I don’t do well at all. Collaboration is the art of working with others. It’s what happens when I have enough respect for someone else that we’re able to serve one another. This builds the trust we need to collaborate on any project. I trust that in those seasons I am weak, you’ll be strong, when you’re weak I’ll be strong. Collaboration and cooperation go hand in hand. The respect on which collaboration is based allows us to see that any individual in the organization can make a difference regardless of position, title or job function.

Put simply, contribution is how one individual adds value to the team. Collaboration is the leveraged power of the team to fulfill the vision.

I wonder how the world would change if we as leaders would begin using the language of relational leadership rather than the economic words of Transactional Leadership. I wonder if this is a change you can lead into? I believe when we do we’ll find our teams more effective, our employees more satisfied and our customers pleased in ways they’ve not yet imagined.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply