Transactional Leaders in a People World

There’s an old saying, “People don’t care how much you know until they know how much you care.” It’s disputed who actually coined the phrase, but it’s an often-shared belief nonetheless, and one that holds tremendous value within the realm of leadership.

The business world is often viewed as a primarily transactional universe, a place to make money, to get the job done, and also to crush the competition. Having heart and concern for the wellbeing of people can all too often fall to the wayside in the quest for results. With numbers, bottom lines, and valuations meant to please stakeholders, it’s no wonder leaders feel the pressure to perform and make things profitable, even at the expense of their employees. Now, I’m not in the least saying that business shouldn’t be profitable. In fact, I believe that if you own a business but can’t figure out how to generate revenue, you shouldn’t be in business, and of course you won’t be if you go too long without making money. But I don’t believe that the prospect of making money and treating people well is an “either or” scenario. It can be “both and”.

Some of the greatest companies of our time are organizations who have been able to transcend the transactional process of standard business, and have moved into providing an experience for their staff and customers that makes everyone better. Sure, a company can make the world a better place with the widget they sell, but they can also be a burning bastion of human talent, a revolving door that sends employees packing almost as soon as they’ve been hired.

It’s when leaders view people as tools to be used, that the onslaught of death by transactional culture occurs. When leadership holds the value that people are there to “work for them”, people suddenly become less than…well, people, and they become tools in the hands of management to be used according to the leader’s determination. One of the true shifts in the empowerment of your workforce is when an employee realizes that the company needs HIM in order to be successful. Yet the reality for most workers today is that they believe that they need the company. Unfortunately, many in leadership like it this way, as it forces a sense of compliance and even fear of loss for the employee. However, this kind of culture ultimately brings disengagement, a direct jolt to job performance, and decreases retention. In other words, it’s a mitigated form of emotionally forced labor, all for the purpose of the company making the transactions they need to make (or so they think), in order to be successful.

However, I have seen some of the great leaders of incredible organizations and businesses, multi-billion dollar businesses, who have incredible insight into working with their staff and employees. Instead of telling their workers what they should do, they find a delicate balance of being able to listen to what it is the employee wants to do with his own life and career.

Fully Clingman, former President and COO of H-E-B Foods shared a story of one of his employees from back in the 90s. He told how the staff member kept visiting his office, telling him that H-E-B needed to get into the gas business, providing gas for customers at their grocery stores. Clingman continually denied the man the opportunity to move forward on the initiative because he didn’t see the value in it. After the man persisted, Clingman reasoned that the employee wouldn’t stop until he either brought the gas business to H-E-B, or went and did it for a competitor. Clingman finally relented. By listening and understanding what “game” his employee wanted to play, Clingman was able to release him into an arena that the man was passionate about. Clingman went further in making sure that the man had access to the resources that he thought he needed for the best chance of success, even though Clingman still didn’t necessarily see the value of it at the time. The long story short, today, H-E-B boasts a billion dollar share in the gasoline market, and is currently in the process of opening convenience stores that sell gas. All of this because many years ago, a leader listened to his employee and realized the value he brought to the team. Clingman has said since that he is certain that had he not empowered the staff member to build that part of the business, the man would have left to do it for a competitor.

The question for leaders is quite simple: Do you see people as “tools” for you to use at your disposal, in order to transact your business? Or do you see people as the backbone and driving force of innovation, creation, and progress? You may know a lot about business, but as long as people are treated as middlemen to get you where you want your company to go, then you will be stuck in the cycle of transactional leadership. It’s when you begin to truly care about your employees, and begin to really listen, that you can unleash them into a more powerful future, for both themselves and the company.

I’m willing to go as far as saying that it’s the difference between a leader and a GREAT leader. Sure, you may be able to grow the bottom line, but can you grow people in the process?