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We are going to look at the transactional leadership style and the transformational leadership style. We're
going to compare these head to head. And I'm basing this almost all on Johnson and Heckman's book on
leadership. I will put a link to that and the description below this video. So let's get into the details.

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I've been talking a lot about leadership lately, in fact, I have three related videos I wanted to tell you
about. The first is on the traits approach to leadership. The second is on the transformational approach.
That's a solo video just on the transformational approach to leadership. And the third is a solo video on
the transactional approach to leadership. And I'll put links to all three of those videos and that section
below this one. But in this video, we're going to compare and contrast transactional and transformational
leadership side by side so you can see how these two relate to each other.

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So here we go.

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So James MacGregor Burns years ago wrote a book called Leadership, and he looked at these two
leadership styles by using Maslow's hierarchy of needs. And there are five levels to Maslow's hierarchy.
And what he said was that transactional leaders were really in the business of helping followers meet
those three lower level needs on the hierarchy. So these leaders are most concerned with satisfying the
psychological safety and belonging needs of their followers.

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And it's an exchange the leader exchanges the pursuit of these rewards, these needs with good
performance, good outcomes.

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So if the followers are doing a good job, the leader does what he or she can to satisfy these needs. If the
follower does not do a good job, then the leader may take these away from them. They may not support
the pursuit of these three needs. One of the concepts, a couple of the concepts that go with this were
developed by Bernard Bass and his associates. He called these transactional factors and the first is a
contingent reward.

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So the approach here is that the leader looks at performance and then rewards good performance. It's the
reward is only there. It's tied to that good performance. And the reverse is also true. It's called
management by exception. The the leader will step in and will punish poor performance. They'll give
corrective action and feedback for bad performance. So you reward the good, you punish the bad. And
it's all a transaction. Here are a few examples of this.

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Bill Belichick from the New England Patriots is an infamous transactional leader. He's won a bunch of
Super Bowls. He's won even more games. So this leadership style can be effective. But he is very known
for simple rewards and punishments.

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If you do a good job, you keep your position. You get to start, you get to play.

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If you don't do a good job, then you get benched. You become a second stringer. You get let go from the
team. They have an expression. Other patriots do your job.

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This is a classic transactional leadership philosophy.

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You do your job, things work out, you don't do your job.

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We get someone else who will do it. So it's easy to blow off. This transactional approach is being old
school and ineffective. But here we have a coach in the NFL who has won more Super Bowls than
anybody.

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So you can't really blow off this style as ineffective or outdated because it still does work under certain
circumstances. Another one is a fictitious example as Magneto. If you've ever watched the X-Men,
Magneto is very much about moving forward at accomplishing the goals for the people that are around
him, the X-Men that are around him. It's very task oriented. If you're off the team, you're off the team. He
doesn't have a lot of bad feelings about that. He just moves forward.
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We'll contrast him with Professor X later. And the third one, the one I really want to talk about is Johnny
Lawrence from Cobra Kai.

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This is from the show Cobra Kai, which is sort of a sequel to Karate Kid, who John Lawrence is a very
interesting figure, but he is a leader, there's no doubt about it.

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He organizes his dojo around some very basic leadership philosophies that are all transactional. For
example, we don't see him much caring for the physiological needs of his people, like food, shelter,
clothing. But he does provide safety. When he teaches his students karate, they can protect themselves.
And also, he's all about this belonging. I wouldn't say it's about love and belonging, but it's about
belonging. Once you're on Cobra Kai, you are a member of the team.

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You have the other team members who have your backs. They're definitely a group, a certain kind of
dysfunctional group, but they are a group. And if you're part of that group, great. If you don't play by his
rules, he kicks you out like he he makes a lot of students leave in the first episodes because they just
don't fit Cobra Kai. And so he's a very transactional leader, but he can be an effective leader nonetheless.
If you're doing well, you get trophies for winning tournaments.

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If you're doing poorly, you do push ups. You know, it's there's a consequence. Reward for good
performance, punishment for bad performance. That's all transactional.

So let's turn now to transformational leadership. This is where leaders, according to Burns in his book
Leadership, engaged the followers on all five levels of the hierarchy. So these leaders are still trying to
help followers fulfill those lower levels and accomplish those successfully. But they are also trying to help
followers fulfill those next two level needs, those higher levels that esteem and self actualization.

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So they're trying to empower followers to feel good about themselves by reinforcing those inner feelings
that the follower has of competence, respect, self-worth and providing external feedback and recognition
to support self-esteem.

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And on the top level is self actualization. They are providing support and encouraging followers pursuit of
self actualization and the desire to become the best person they can possibly become. Let's look at some
examples in Hathaway from the movie. The Intern is a great example of this in film. She's a very young
CEO, but she has vision. She wants to create an amazing, different kind of company. She even invests in
her aging intern played by Robert De Niro.

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So this is a guy who came out of retirement to just do something interesting. She spends a lot of time with
him, invest in the relationship she wants to, even though this guy is older and almost retired again,
become all he can be. She's a special kind of CEO that wants to do great things with her company, great
things with her people. She's helping them reach those higher level needs of the hierarchy. Professor X or
Professor Xavier from the X-Men is another excellent example and a counterpoint to Magneto.

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So he has a school that's for gifted youngsters.

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These are mutants, basically, but he wants them to become well-rounded people, to explore their gifts, to
literally become everything they're possibly capable of becoming. He provides safety and belonging in his
school, but he also helps them to feel good about themselves and wants them to stretch into the best
people they can be in the long run. And finally, the one I really want to talk about, Daniel LaRusso.

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This is The Karate Kid, the original.

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And on this show, Colebrooke, he now has his own karate school, Dieguito Karate.

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And Daniel Russo is much like Mr. Miyagi. Mr. Miyagi said to him in the original movie, We make a Sagra
pact. I promise to teach you karate, you promise to learn. So you still see the exchange happening there.
That's a transaction. But Mr. Miyagi wanted to take things to the next level and invest in the whole person.
He does this frequently by talking about balance, Mr. Miyagi said. The lesson is not just about karate only
it's a lesson about your whole life.

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And when your whole life has a balance, everything will be better. He invests in Daniel LaRusso self-
esteem. He invests in Daniel becoming the best possible person he can become. And this is exactly the
same teaching approach that Daniel LaRusso takes in Cobra Kai with his students. He has a fewer
number of students. He invests in their whole life. And you see him passing on this lesson of balance to
his students very carefully, very deliberately. He's helping them become all they can be.

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He is a transformational leader.

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So he's satisfying those lower levels of the hierarchy, but he's also helping them to meet those higher
levels of the hierarchy, which qualifies him as a transformational leader. And there are some key
characteristics of transformational leadership. I go into these in more depth in that video that's dedicated
to transformational leaders. I'll put a link to that in the description below. But briefly, here are the top five.
Transformational leaders are creative. They really think outside of the box.

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They often go against the norms and the standards of a given industry or organization to do something
new. They're interactive. They engage their followers quite a bit. They talk to them. They interact with
them daily. They're hands on. They are three visionary. They have a clear vision for the future, an
inspiring vision for the future that brings their followers along. Number four, they are empowering. So they
really give their followers a lot of latitude to grow and to become all they can be.

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And they are number five, passionate. They have a real excitement for their work. It's not just a job for
these leaders. They're really into it. And that passion then bleeds out onto everybody else and they get
excited to. That goal of transformational leadership is to help transform followers into leaders themselves.
Here's a critique of both of these. The transaction leadership style has some advantages, clear structure,
achievable goals.