In a world where leadership and learning are rapidly evolving, organisations must move fast to keep up. What drew me to the learning profession was the opportunity to help people truly transform. Yet, much of today’s learning is transactional — a tick-box exercise focused on short-term knowledge retention rather than real behavioural change. I see organisations continue to roll out competency frameworks, compliance training, and technical skills programmes under the assumption that they are building capability However, transactional knowledge alone does not drive true transformation. In skills-based industries like ours, success depends not just on acquiring knowledge but on the ability to apply, adapt, and internalise it. The failure to move beyond transactional learning can have serious unintended consequences for organisations
Artificial intelligence (AI) is heralded as a revolution in workplace learning able to personalise training, automate assessments, and deliver scalable learning solutions. While AI undoubtedly enhances efficiency, it also presents a fundamental risk: it amplifies transactional learning rather than enabling transformational development. Why? Because AI excels at delivering information, but it cannot synthesise complex, interconnected human experiences in the way that true expertise requires. AI-driven learning systems focus on:
In contrast, true transformational learning requires more than knowledge acquisition
- Optimising knowledge delivery – Breaking training into bite-sized, digestible modules that maximise retention but fail to build depth or real-world adaptability.
- Automating assessment – Using multiple-choice tests, quizzes, and keyword-matching to validate competence, reinforcing the notion that knowledge is about retrieving the right answer rather than applying judgment.
- Personalising but not integrating – AI can adjust training pathways based on learner performance, but it cannot replace the role of an experienced mentor who connects disciplines, highlights patterns, and develops holistic thinking.
In contrast, true transformational learning requires more than knowledge acquisition. It demands the ability to connect seemingly unrelated ideas, weigh competing priorities, and navigate grey areas where there are no clear right or wrong answers. This is something only human experience, reflection, and real-world application can develop.
In financial services, trust is everything. Customers, Regulators, and stakeholders expect individuals to operate with competence, ethical judgment, and expertise that extend beyond root compliance. If an organisation believes it has built transformational learning but has only delivered transactional training, it creates a false sense of security that can lead to serious failures:
- Regulatory breaches – Colleagues who follow rules without understanding the principles behind them will struggle to navigate complex regulatory changes.
- Ethical failures – A lack of deep learning leads to black-and-white thinking, where colleagues follow instructions rather than assess risks holistically. This can result in poor customer outcomes, compliance scandals, and enforcement action.
- Loss of industry reputation – If an organisation is found to have under-skilled colleagues in critical roles, it risks long-term reputational damage. Customers and stakeholders will not trust institutions that claim expertise but fail to demonstrate it in practice.
Companies may believe they have built capability because people are passing assessments, training compliance rates are high and colleagues can recite policies and procedures, yet none of this guarantees real-world competence. When an organisation measures learning through outputs rather than outcomes, it risks mistaking activity for progress. If you were to audit your training programmes today, how much of what is being taught actually transforms the way people think, behave, and make decisions? If the answer is “not much,” then the organisation may be accumulating risk without realising it.
To distinguish transformational from transactional learning, organisations must ask:
- What evidence do we have that colleagues can confidently apply their knowledge in ambiguous or high-risk situations (if they can recognise one)?
- Can we prove they are developing critical thinking skills beyond process-driven responses?
- Can they make decisions without always deferring to a rulebook?
- Do they understand the “why” behind the “what” they are doing?
One often overlooked consequence is the impact on the colleague. When individuals appear competent on paper but lack the depth of understanding needed to make sound decisions in real-world situations, the personal toll can also be significant. These may include:
- False confidence, real consequences – When colleagues believe they have mastered a skill because they have completed a course yet lack the real-world depth to navigate complexities, mistakes become inevitable. In financial services, this could mean misjudging a client’s risk tolerance, failing to spot fraudulent activity, or mishandling a complaint from a vulnerable customer. The illusion of competence is often more dangerous than no training at all.
- Erosion of professional judgment – Transactional learning teaches rules and processes but does not develop intuition or professional discernment. In fast-moving, high-pressure environments, professionals need to make decisions that require more than technical knowledge—they need to interpret, challenge assumptions, and exercise ethical reasoning. When training does not foster these skills, individuals become passive executors rather than active thinkers.
- Burnout and disengagement – A workforce that is constantly trained but never truly developed will feel the strain. Colleagues may become disillusioned when they realise that the skills they were promised are not fully formed, leading to stress, frustration, and burnout. Expecting people to perform at a transformational level while training them transactionally sets them up to fail.
- The hollowing out of expertise – Over time, the distinction between genuine expertise and procedural competence blurs. Real capability is built through layered learning, reflection, and deep engagement. If an organisation prioritises completion over comprehension, it risks creating a workforce that is nominally skilled but lacks real mastery—and ultimately depleting the pipeline of future leaders.
The distinction between transactional and transformational learning is not a theoretical debate—it is a rapidly materialising issue with serious consequences. When organisations fail to recognise the gap, they create a workforce that appears competent but lacks the depth to perform in real-world conditions. AI, while powerful and undoubtedly part of the future learning landscape, is not a solution to this problem. If anything, it accelerates it by reinforcing shallow learning at scale. True expertise cannot be trained by an algorithm alone; it requires mentorship, experiential learning, reflection, and the wisdom that comes from navigating real challenges.
The solution isn’t simply more training but a fundamental shift in how learning is designed, delivered, and assessed – a new methodology even. Organisations must move beyond measuring success through completion rates and assessments, instead focusing on behavioural change, professional judgment, and deep application of knowledge. Long-term success, both for individuals and organisations, depends on the ability to apply ethical judgment, critical thinking, and expertise in complex situations.
Learning must be recognised and valued as a practice; an ongoing journey of self-awareness, reflection, and mastery, not a one-time event. True transformation fosters adaptability, integrity, and resilience. Ethical disciplines and self-regulation principles, central to my Yoga Teacher Training, provide a powerful framework, guiding professionals to integrate values like integrity, discipline, and self-study into their decision-making.
By embedding these principles into learning strategies, organisations can develop not just knowledgeable employees but reflective, responsible, and adaptable leaders who are also engaged and valued. Anything less risks reinforcing the illusion of progress rather than fostering the deep transformation needed for sustained success in 2025 and beyond.
