The Folly of Transactional Leadership

Karl Bimshas
2 min readFeb 6, 2024
The Folly of Transactional Leadership by Karl Bimshas

Transactional leadership might win today. It will always lose tomorrow.

Transactional leadership can be effective when addressing immediate tasks and goals, but it hinders long-term adaptability and innovation because it primarily relies on rewards and punishments to motivate individuals. This method relegates cultivating a collaborative and innovative environment to the background. Can such an approach truly inspire employees and nurture creativity?

The symptoms of transactional leadership may include:

  1. A transactional leader tends to enforce rules strictly and relies heavily on established procedures, sometimes at the expense of flexibility.
  2. Leaders primarily engage in transactional exchanges, rewarding or punishing based on performance rather than inspiring or developing individuals.
  3. The focus is predominantly on immediate goals and tasks, focusing less on long-term vision or strategic planning.
  4. Employees may feel motivated only by external rewards rather than finding intrinsic satisfaction in their work, leading to lower levels of engagement.
  5. Transactional leaders often resist change and innovation, as these could disrupt established routines and processes.

Effective leaders avoid transactional leadership because it tends to hinder the emotional connection and trust essential for a healthy work environment. Savvy leaders recognize the significance of forging positive relationships within the team. They champion a collaborative and supportive atmosphere, emphasizing inspiration, shared vision, and individual development. This approach builds stronger bonds, open communication, and unity among team members — crucial elements for long-term success and employee satisfaction.

To remedy transactional leadership tendencies, leaders could adopt more transformational leadership practices:

  1. Shift focus from merely transactional exchanges to inspiring and motivating team members. Communicate a compelling vision that goes beyond immediate tasks.
  2. Cultivate an environment that stimulates creativity and innovation. Allow employees the autonomy to explore new ideas and solutions.
  3. Invest time in building positive relationships with team members. Develop a more open and supportive communication style to build trust and collaboration.
  4. Recognize achievements but also focus on individual development. Support employees in their professional growth and provide learning opportunities.
  5. Be open to change and adaptability. Embrace challenges as opportunities for growth rather than resisting them.

By embracing transformational leadership principles, leaders better encourage trust, engagement, adaptability, and employee satisfaction, all essential for long-term success.



Karl Bimshas

Boston-bred and California-chilled Leadership Adviser | Writer | Podcast Host who helps busy professionals who want to manage better and lead well.