Some critics complain that U.S. President Barack Obama campaigned on inspirational rhetoric and an ambition to "bend the arc of history" but then turned out to be a transactional and pragmatic leader once in office. In this respect, however, Obama is hardly unique.
Many leaders change their objectives and style over the course of their careers. One of the great transformational leaders in history, Otto von Bismarck, became largely incremental and status quo-oriented after achieving German unification. Likewise, U.S. President Franklin Delano Roosevelt's foreign policy objectives and style were modest and incremental in his first presidential term but became transformational in 1938 when he decided that Adolph Hitler represented an existential threat.
Transactional leadership is more effective in stable and predictable environments, whereas an inspirational style is more likely to appear in periods of rapid and discontinuous social and political change. The transformational objectives and inspirational style of a leader like India's Mahatma Gandhi or South Africa's Nelson Mandela can significantly influence outcomes in fluid political contexts, particularly in developing countries with weak institutional constraints.
Leaders with contextual intelligence are like surfers: They judge waves and ride them well.
By contrast, U.S. foreign policy formation is highly constrained by institutions like Congress, the courts and the constitution. Thus, there is less opportunity for transformational leadership.
But even the U.S. Constitution is ambiguous about the powers of Congress and the president in foreign policy. At best, it creates what one constitutional expert called "an invitation to struggle." Moreover, much depends on external conditions. U.S. Presidents Woodrow Wilson, Franklin Roosevelt and Harry Truman developed transformational objectives only in response to external events after they entered office.
Crisis conditions can liberate a gifted leader from the accumulated constraints of vested interests and bureaucratic inertia that normally inhibit action in the U.S. system. U.S. President Bill Clinton, caught up in the complacent 1990s, is said to have envied Franklin Roosevelt's crisis conditions of the 1930s.
In such situations, action becomes more fluid. A leader with transformational objectives faces better odds, and an inspirational style is more likely to find responsive followers. For example, U.S. President George W. Bush used the crisis conditions after 9/11 to assert executive power and invade Iraq.
But while turbulent times may set the stage for transformational leaders, it does not follow that bold and risk-loving leaders are always best suited to address the crises that define such periods. U.S. President George H. W. Bush, unlike his son, was transactional but implemented a very successful foreign policy.
Whether they are transformational or incremental in their objectives, leaders need certain soft- and hard-power skills to be effective. Among the soft-power skills include: emotional intelligence (self-control and the ability to use emotional cues to attract others); vision (an attractive portrait of the future that balances ideals, objectives and capabilities); and communication (the ability to use words and symbols to persuade both an inner circle and a broader audience).
For the use of hard-power resources, two skills are important: organizational capacity and a Machiavellian proficiency in bullying, buying and bargaining to form winning coalitions.
Above all, effective leadership requires contextual intelligence and an intuitive ability that helps a leader understand change, set objectives and align strategies accordingly. As Lee Kuan Yew, the founding father of modern Singapore, once told me, a leader must be a quick learner, test reality, be prepared to change his mind as conditions change and act calmly during crises.
Contextual intelligence implies both a capability to discern trends in the face of complexity and adaptability while trying to shape events. Bismarck once referred to this skill as the ability to intuit God's movements in history and seize the hem of His garment as He sweeps past. More prosaically, leaders with contextual intelligence, like surfers, have the ability to judge and adjust to new waves and ride them successfully.
Leaders of this type not only adapt their style to the situation and to their followers' needs. They also create flows of information that "educate their hunches." This involves the ability to size up group politics and understand the positions and strengths of various stakeholders. It is the self-made part of luck.
This skill is crucial in unstructured situations, when it is often more difficult to ask the right questions than it is to get the right answers. Leaders with contextual intelligence are good at providing meaning or a road map by defining the problem that a group confronts. They understand the tension between the different values involved in an issue and how to balance the desirable with the feasible. In particular, contextual intelligence requires an understanding of groups' cultures, the distribution of power resources, followers' needs and demands, information flows and timing.
Contextual intelligence is particularly important in foreign policy because an effective leader must understand the culture and power structure of other societies. With years of experience in foreign affairs, George H. W. Bush had excellent contextual intelligence. With almost no experience in foreign affairs, "W" did not. That gap proved the difference between the success of the father and the failure of the son.