Leadership Career Development Career Conversations Coaching

A simple way to increase employee productivity & growth

Whilst the difference between transactional conversations and capability building conversations is subtle, we find that experimenting with capability building questions is much more likely to increase employee productivity and growth.

Transactional conversations

Organisational life is often characterised by transactional conversations. You may recognise these types of questions as “Would you build a list of clients with outstanding invoices?”.... “Please draw up a plan of action so that we can work up a new pricing structure with client”... “Can you do this by tomorrow?” In most conversations that happen within the workplace, we know exactly what we're talking about and what we’re trying to achieve. The conversations we have in these situations are relatively predictable. We know what to expect. Some of us call such conversations "transactional" because they're essentially about an exchange.

In transactional conversations, there is a focus on an exchange of information, instructions, data gathering, controlling. Pockets of energy are moving mostly from the top downwards. A military metaphor also comes to mind: ground can be covered and obstacles overcome if we all follow assigned roles, with discipline and obedience.


Let’s be clear. Organisations with highly transactional cultures can work, and can achieve business growth if the leadership group are full experts in their fields and a high degree of compliance, or control is set in place in those they lead.

Often in our work with executive teams, we see an over-reliance on these types of conversations. Leaders can tend to favour this style and fail to appreciate the benefits of adopting a more flexible range of approaches to conversations with their teams.

Over three decades ago, Hersey and Blanchard1 developed a theory that the most successful leaders are those that adapt their leadership style to the maturity of the group. Effective leadership varies, not only with the person or group that is being influenced, but it will also depend on the task, job or function that needs to be accomplished. In line with this theory there is also a time and a place for conversations that build capability.

When the team has less experience, skills and commitment, there may need for more “telling” by the leader. And in a crisis situation there may be no time for anything else. Transactional conversations do, however, carry the risk that collective intelligence, and individual capability is lowered, or repressed, in those involved.

We have observed that organisations have become far more transactional in their cultures in recent years. In some instances, we assume that the cost controlled culture we have experienced in recent years caused a needed focus on rapid change and cost cutting. In some, the change seemed to be a function of a changing leadership team. However we have also seen many people in these organisations become disenchanted and inclined to move on. A shift to a more transactional culture can have clear embedded costs.

Transactional conversations aren't transformational and they don’t tend to build skills and capabilities in people.

Capability building conversations

Capability building conversations sound quite different. “How do you think we should move ahead with this challenge?” “How do you feel you went leading the recent EBA negotiations?” “What do you think might be the best way to lead our colleagues through this change?”

In capability building conversations the focus is on developing and delegating expertise. By and large these kinds of conversations create much more robust, agile employees and foster much higher levels of engagement.

Unfortunately, this self-evident point becomes lost in the operational fog of managing a large, complex organisation. Some leaders tend to take the easier route of focussing on processes and structures that they can more easily see and control, rather than on the quality of their conversations or on what might be happening inside people’s heads.

Capability building conversations, in groups or with individuals, require leadership with a coaching perspective rather than leadership from a command and control perspective. These conversations are all about building capability in individuals to resolve challenges themselves and to become more autonomous.

When you operate in a transactional mode in your conversations, you are not helping your employees to grow. As a leader how do you shift the balance of the conversations you lead more in the direction of building capability?

In any conversations there are questions that simply gather information, and then questions that deepen the learning of the person being asked. The latter category is far more powerful and thought provoking. If new thoughts, insights, and directions start to surface during the conversation then you are shifting into the realm of capability building.

Reframing the questions

Here are some examples of transactional questions we like to draw on and then reframe as capability building questions:

Transactional questions:

  • What have you tried so far?
  • Why are you stuck?
  • What do you mean?
  • What are you waiting for?
  • Why did you do it that way?

Capability building questions:

  • What haven't you tried yet?
  • You seem stuck. What would make that easier for you?
  • What aren't you saying?
  • What are you ready to do?
  • What have you learned so far?

The difference may seem subtle but we find that experimenting with capability building questions can often bear rich dividends. It is also beneficial to avoid asking "Why?" Rarely does a why question yield an answer you can do much with. Another word to avoid is “but”. It is often a precursor to shutting down reflective thinking.

Case Study

Clare was a director in a global professional services company. She was successful at winning large projects. At work, however, her colleagues found her brusque and uncaring. She overloaded administrative staff because she managed time poorly.

Questions linked to her behaviour included “What do you think your colleagues feel about your performance with clients?” and “How do you think junior colleagues would react if you offered to mentor them on how to win new projects?” Other questions that were helpful in tuning Clare into her impact on others included future-oriented, reflective questions on where she expected to be in five years’ time and how she would like to be described as a partner of the firm; and questions on how she comes across, such as “When you are brusque with your secretary, what do you think others feel about you?” or “What do you think people at work most like/dislike about you?” Clare spent a few months gathering data about her environment and her colleagues and meeting with them to discuss feedback about her. Her colleagues formed a far better impression of her interest in them and in their development. She was able to work on her behaviour and became a partner later that year.

These kinds of capability building conversations have far more impact on the future of the business, on the future of the team, and on the development that’s needed to reach shared goals.

A focus on building capabilities through the dialogue we have with our people every day has far more value, we would suggest, than the design of yet another performance incentive scheme, or yet another set of organisational imperatives coming down from the top.

CTA - Career conversations small v2

1. Hersey, P. (1985). The situational leader. New York, NY: Warner Books.


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Leadership, Career Development, Career Conversations, Coaching
Leadership, Career Development, Career Conversations, Coaching
Leadership, Career Development, Career Conversations, Coaching