President Bush has cast himself as a transformational leader. He disdains what he calls "small ball." Many people assume that leaders with transformational objectives and an inspirational style are better or more ethical than leaders with more modest objectives and a transactional style.
Transformational leaders provide an inspiring vision of goals that can help overcome self-interest and narrow factionalism in organizations and nations. They summon new and broader energies among followers. Groups and nations that are rent by cleavages and factions can benefit from a Gandhi or Mandela who raise people's sights to a common cause.
In contrast, transactional leaders lead by using a normal range of rewards and punishments rather than inspiration.
Common causes, however, are not always more moral than individual interests. If a government official chooses to go to his daughter's softball game on a Saturday afternoon rather than serve the public interest by working in the office, which is the higher need? When the transformational leader Mao Zedong rallied the Chinese people around collective interests in the Great Leap Forward of the 1950s and the Cultural Revolution of the 1960s, the result was millions of unnecessary deaths.
More than two centuries ago, the newly independent American colonists had a transformational leader in George Washington. Nonetheless, they invented a very different type of institutional leadership when James Madison and other transactional leaders negotiated the Constitution and later explained it in the Federalist Papers.
Madison's famous solution to the problem of cleavage and faction was not to convert everyone to a common cause, but to overcome divisions by creating an institutional framework in which ambition countered ambition and faction countered faction. Separation of powers, checks and balances, and a decentralized federal system placed the emphasis on laws more than leaders. Even when a group cannot agree on its ultimate goals, its members may be able to agree on means that create diversity and pluralism without destroying the group. In such circumstances, transactional leadership may be better than efforts at transformational leadership.
One of the key tasks for leaders is the creation, maintenance, or change of institutions. Madisonian government was not designed for efficiency. Law is often called "the wise restraints that make men free," but sometimes laws must be changed or broken, as the civil-rights movement of the 1960s demonstrated. On an everyday level, whistle-blowers can play a disruptive but useful role in large bureaucracies, and a smart leader will find ways to protect them or channel their information into institutions such as through ombudspersons. An inspirational leader who ignores institutions or breaks them must carefully consider the long-term ethical consequences as well as the immediate gains for the group.
Good leaders design and maintain systems and institutions. Well-designed institutions include means for self correction as well as ways of constraining the failures of leaders. As the top legal officer of GE put it, a leader needs to create an institutional framework where "the company's norms and values are so widely shared and its reputation for integrity is so strong that most leaders and employees want to win the right way."
Poorly designed or poorly led institutions can also lead people astray. Obedience to institutional authority can be bad at times. Several decades ago, the Milgram experiment at Yale showed how easily ordinary people could be encouraged to administer (simulated) brutal electrical shocks to another person when told to do so by an authority figure. Likewise, the infamous Stanford University prison experiment of 1971 showed how morally toxic conditions set by a leader can induce regular people to commit abusive, even sadistic behavior.
The recent case of the Abu Ghraib prison in Iraq reminds us of this danger in real life. The Abu Ghraib guards were reservists without special training who lacked supervision and were given the task of softening up detainees. It is not surprising that the result was various forms of torture. The moral flaws were not simply in the prison guards, but also in the higher level guardians such as then Secretary of Defense Donald Rumsfeld, who failed to monitor adequately a flawed institutional framework.
Voters need to remember that transformation is not enough. Good leadership is not merely inspiring people with a transformational vision, important though that can be, but also involves a capacity for creating and maintaining the systems and institutions that allow both effective and moral implementation.
• Joseph S. Nye Jr. is university distinguished service professor at Harvard and a member of the board of directors of the Belfer Center at Harvard's Kennedy School. He is author of the new book "The Powers to Lead." His views are his own.