The transaction-based approach to planning can be very effective if used in an organization that is large and in an organization that resides in a relatively stable marketplace. The organizational must be large enough and secure enough, and the environment must be stable enough to allow for personal and organizational reflection and sustained, collaborative planning processes. More than any of the other approaches, the transactional approach tends to increase commitment to the plans finally formulated. Given that ongoing monitoring takes place, the fourth approach (like the third approach) also tends to produce few failures. At the very least, those failures that do occur tend to have a reduced impact, given the ongoing analysis and re-planning processes.
Transaction-oriented postmodern leaders are usually inclined to assume an internal locus of control. They believe that broad based participation by parties who are internal to the organization can make a difference in addressing tough external challenges. Furthermore, by emphasizing ongoing organizational learning even after the plan is put in place, members of an organization are likely to feel that they can eventually manage and even overcome major external challenges. At times this assumption of internal control is not realistic. Transactional leaders are sometimes over-confident about their ability to control or even influence external conditions.
Turning to the MBTI profiles, we find that transactional leaders are most likely to be oriented toward the sensing function (S) when gathering information (perceiving) and to the thinking (T) processes when making a judgment (the ST configuration on MBTI). Transaction-based leaders are also much more inclined to be deliberate and diligent in the judgments they reach. From an MBTI perspective, they are more likely to be oriented toward perceiving rather than judging in their work (STP). Rational leaders (third approach) are deliberate in their work and ensure that they have the appropriate data and clarity of purpose before moving forward. They are also inclined, however, to stick with their idea and their assessments once a plan of action has been mapped out. Conversely, the transaction-oriented leader keeps her options open even after a plan of action has been initiated. Transactional leaders are always open to new ideas, clearer intensions and new information—they remain in a “P” mode even when engaged in action. These transactional leaders can be a source of real frustration for other leaders with a more “J” (judging) orientation. Not only are transactional leaders slow to come to a decision, they even tinker with the decision after it has been made!
The key to effective planning for those who embrace the transactional approach is paying attention to the external environment that has an impact on their organization—these leaders must embrace an external as well as internal locus of control. Transactional leaders must fully appreciate not just the ongoing collaborative processes that occur inside their organization, but also the powerful forces that are operating in the 21st Century on their organization. They must be wary of the “group think” that can occur when building consensus—the tendency for a group to perceive what it wants to perceive and to stifle contradictory (and particularly pessimistic) perspectives. In this case, as in the case of the third approach, the “enemy” is not just an external threat, it is also internal pressures to conform on behalf of consensus. Participants in transactional planning may abide by the results of a carefully conceived collaborative process without taking a second look to be sure that the results of this transactional analysis are not just properly reached, but are also based in reality.Download Article 1K Club