Transforming Leadership

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Pulitzer prize winner James MacGregor Burns, wrote Transforming Leadership, several years ago and helps us understand the difference between leaders who focus on transactional change versus those who transform an organization and its people.  It’s a distinction that’s worth mastering.

Transactional leadership focuses on “change” –  to “substitute one thing fro another, to give and take, to exchange places, to pass from one place to another”. Transforming something  is more profound. “It is to cause a metamorphosis in form or structure, a change in the very condition or nature of a thing, a change into another substance, a radical change in outward form or inner character.”  When a frog becomes a prince, or a carriage maker becomes an auto factory, or Apple creates the iPod and music ecological system to support it, we have transformative change. When Samsung, HTC, etc. change some of the features of the iPhone, they are engaging in transactional change.

Andrew Grove, former Intel CEO and his key partners decided to leave the memory industry and enter the microprocessor business because they knew that transactional change would not solve their problem of how to make a profit in the memory industry faced with Japanese superior manufacturing processes; so they make a transformational change – which put them at the top of the new industry.

When faced with the need to change – is yours transactional or transformational? The latter clearly is much more difficult – and requires leadership that goes beyond incremental changes in time, features, distribution tactics, etc. It requires a leadership that also is aware of the importance of followership – will the people who buy your product/service, or live in your country, go along with the move? Leaders must take the initiative to mobilize people for participation in the process of change and encourage the development of new feelings of identity, self-worth and self-efficacy.   Transforming leaders define public values and embrace the enduring principles of the people (customers or residents). Coca-Cola learned this lesson the hard way when it tried to transform its brand – sweetening their Cola – without making sure this was something its customers really wanted. The people “owned” the existing brand and were not willing to give it up – leading to the creation of both Traditional and New Cokes.

So, as you face the need to make a change – be very clear as to whether a transactional change will be sufficient or whether transforming leadership is needed; and if the latter, your leadership needs to address the wider range of issues involved.  What’s your experience in this area? Share them!

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