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Leaders who act like role models are less effective in stimulating employees’ creativity than those who set clear objectives and offer extrinsic rewards, new research from Rotterdam School of Management reveals.

Two different types of leadership were observed: transactional and transformational.

Employees who work for transactional leaders, who set clear goals and offer rewards when they meet them, are 14% more creative than employees who work with a transformational leader.

Comparing transactional leaders against each other – leaders who scored low against leaders who scored very highly – the numbers were even more astonishing. Employees with a very transactional leader generated, on average, 62% more ideas than those working for a leader who was not so transactional.

Transactional leaders are rational, communicate clearly, set clear goals and are fair in rewarding success.

Transformational leaders are role models, they are inspirational and motivate intrinsically – they also take patience in talking to their subordinates and listening to their ideas.

This is the first field study to look at the impact of leadership styles on employee creativity. Researchers interviewed and analysed the working habits of nearly 150 employees and managers in Germany.

Assistant Professor Dirk Deichmann advises businesses to pay more attention to transactional leaders as they are the ones who will move the organisation forward. However, if businesses struggle to find transactional leaders, they can encourage their transformational leaders to set more goals and reward employees for accomplishing these goals.

Assistant Professor Deichmann says: “Intrinsic motivation is often linked to creativity so you would expect that the transformational leader, the one who motivates employees’ intrinsically, would be more successful in stimulating employees to come up with new ideas. But the opposite is true. “

To speak to Dirk Deichmann or for a copy of the study, please contact Alexandra Dobocan at alexandra@bluesky-pr.com

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