Transformational Leadership in a Transactional World

By William Seidman and Michael McCauley They are highly successful managers of a business operations group that is responsible for collaborating with customers to manage the supply chain. They really know how to run business operations. However, when asked to think about re-designing their organization to handle five times the volume, these otherwise effective managers were stumped. They are highly successful managers of a telephone sales operation. They have perfected the “one call close” producing an average of four closes a day. They really know how to run telephone sales. However, when asked to restructure their process to accommodate new more complex products, they too were stumped. These managers, all of whom are excellent at managing business transactions, are considerably less effective when asked to design and lead a transformation. Like most managers, the pressures of daily business transactions dominate their lives. They live in a transactional world. Yet, increasingly these same managers are being asked to transform their organizations in order to achieve consistent, systematic performance improvements. How can a manager living in a transactional world be a transformational leader? The purpose of this article is to address one of the most difficult and complex issues that impede OD practitioners’ success, the dominance of transactional thinking in organizations, particularly their leadership, and the negative impact that transactional thinking has on organizational performance improvement. The article’s secondary purpose is to be useful as a handout to managers to help them think about the changes required. As such it is meant to both encourage OD practitioners to advocate for transformational leadership and give them a means of making transformational leadership a reality in organizations.