What distinguishes transformational leadership from transactional leadership?

Transformational leadership is characterized by its emphasis on inspiring and motivating followers to achieve their highest potential and to embrace change. This leadership style focuses on creating a vision for the future that excites and engages team members, encouraging them to commit to shared goals. Transformational leaders foster an environment where individuals feel valued and supported, often using encouragement to help them overcome challenges and innovate.

In contrast, transactional leadership is more focused on established processes and the management of tasks—rewarding compliance and punishing non-compliance. This approach is driven by a clear system of rewards and consequences, and does not typically involve inspiring followers through a compelling vision.

The distinction lies in how transformational leaders approach leadership by engaging and uplifting their team, generating intrinsic motivation that goes beyond basic rewards or punishments associated with transactional leadership.