Transformational versus Transactional Leadership

One method for understanding the unique characteristics of effective project leaders is to examine the difference between two distinct forms of leadership: transactional and transformational. The term, transactional leaders, typically refers to those individuals who view their jobs as a series of discrete transactions between themselves and their subordinates. They generally are good administrators in that they operate as problem solvers. Because they deal with issues as they come up (transactions), they may be excessively reactive rather than inclined to develop a vision for themselves, their departments, or their projects.

Transformational leaders, on the other hand, seek to make their mark on the organization or their projects through operating in a forward-thinking, often charismatic, manner. They work to make a difference as project managers, through transforming their project teams and, ultimately, their projects, in positive ways. We will argue throughout this book that a transformational leadership model is very appropriate for successful project managers. They must learn to view their work as a challenge of transformation—taking a chaotic and disorderly situation (the beginning of a new project) and, through their personal energy and ability to inspire team members, creating a vision of project success that motivates high commitment from the team.