Fresh out of university with much leadership optimism, I ventured into a luminous experience as a technology consultant for our biggest Fortune 50 client. Hailed as the global number 1 for leadership development, Procter and Gamble (P&G) preserve a culture of building change leaders and difference-makers, no matter the stakeholder level (Russell Reynolds Associates, 2012). Never have I witnessed an organization with so many emergent and established leaders all under one roof; these kinds of leaders trailblaze together and contribute to multidimensional goals. This immersion deconstructed and advocated my appreciation for leadership styles that add value to individual/organizational growth.
Case studies of historical, military, international, women, and corporate leaders, both transformational and transactional leadership traits and characteristics are always active and effective (Arenas, 2019). The foremost transformational leadership characteristic is on selling ideas and visions through perpetual innovation and improvement that underscore growth (Maryville University, 2021). For example, transformational leaders challenge followers to go above and beyond what’s expected of them, to reach even more than the confines of their ambitions, much like in product development, sales, or innovation teams. On the other side, transactional leadership’s focused characteristic is on managing the status quo through structure, schedule, and tasks/duties (Xiaoxia and Jing, 2006). For example, transactional leaders challenge followers with verbal castigation on what’s expected of them and the consequences of their performances, much like in military/law enforcement environments. If transformational leaders’ traits are on advocating idealized influence (charisma), inspiration, intellectual stimulation, and individualized consideration, then transactional leaders’ traits are on promoting contingent rewards, management-by exception (corrective actions), and strong laissez-faire (Scoulier and Chapman, 2018). Moreover, a study involving 186 leaders reveal that there is a significant qualifiable correlation between the organization’s overall goal achievement and its leaders’ full range of traits and characteristics (Barbuto, 2005).
Without compromising its mature and structured organization, and with its 180-year history of producing Fortune 500 CEOs, P&G’s leadership credo enables the world-class organic progression of transformational and transactional leaders through in-house leadership programs and initiatives (P&G, 2020). To continuously hone its leaders (new hires, contingents, executives), P&G does it by putting a spotlight on consistently creating awareness on its values-based leadership (ownership, integrity, trust) and its build-from-within culture (beliefs, competencies, values) (McDonald, 2009). Regardless of the organization’s size, stakeholder’s diversity, and business’ complexity, P&G’s innovation-driven culture prove how transformational/transactional leadership traits/characteristics can be shared, succeeded, and sustained through professional development pillars and training/learning approaches.
The best way to compare the two leadership styles is by fundamentally anchoring each on the leader’s vision and value chain as a baseline. With myriads of competing characteristics, priorities, and cultures, leaders need to be self-aware enough to emphasize their authenticity in harnessing strategies, maximizing motivations, and prioritizing stakeholders’ potentials (Betz, 2021). The application of leadership philosophies/theories and styles should align with a holistic focus of considerations (Akran, 2018). A leadership’s edge, particularly in ways of working with the vision, whether through transformation or transaction, demands higher collaboration and communication (Harvard Business Review, 2014). According to a 2016 academic research, utilizing transformational/transactional leadership with its right drivers for change can increase customer loyalty (10%), productivity (20%), profitability (21%), and reduce turnover (40%) (Matthews, 2018). Nevertheless, one interesting research confirms that for organizations in some regions: transformational leadership is still moderate, transactional style is more frequent; transformational leadership has a positive impact on performance, transactional has a negative impact (Rejas et al., 2006).
With P&G, from recruitment down to talent development, their leadership team offer personalized paths using unparalleled leadership training and development programs (rotational programs, 70/20/10 approach, succession planning frameworks) (Ong, 2017). I’ve observed that P&G gives tools to their leaders for reskilling and upskilling so that they won’t fully lean on certain styles of leadership that they are comfortable with. For example, if P&G sees you as an excellent transformational leader, they will place you in roles that are innovation-related, before a gradual exposure to operations-heavy (transactional) projects. P&G enables their leaders with research-proven formulas for synthesizing their strongest leadership traits to become an all-inclusive leader: one who can weave styles succinctly and synergistically. Some of P&G’s alumni who are now holistic transformational/transactional CEOs are Jeffrey Immelt (GE), Steven Ballmer (Microsoft), James McNerney (Boeing), and Margaret Whitman (eBay) (Belludi, 2006).
Because P&G leads by example, I discern it is not impossible to cultivate a leadership culture that normalizes being multi-faceted. It is never enough that we can differentiate and discern our styles; it is always ideal to associate an optimal mix of leadership styles customized to the circumstance. With a clear vision, dynamic transformational/transactional leadership development can be synergized. I got influenced to strive and become an ethically “ambidextrous” self-leader: someone who can balance transformational and transactional styles notwithstanding any challenge, change, or weakness.
Now at a different university with renewed leadership optimism, this school and cohort learning experiences help foster a deeper breeding ground for holistic leadership growth.