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Is Tough-Ass Leadership Better Than Servant Leadership?

October 14, 2018

Servant 1

As a Western society we’ve been enraptured with leadership for decades. The past 30 years have witnessed a tidal wave of books on leadership and management, with most of them having short shelf lives and, in reality, providing gimmicky messages based on flimsy or non-existent research.

One segment of the literature has conveyed the core message that those in charge of organizations should follow a servant-oriented approach to leadership. Adapted from Robert K. Greenleaf’s work, servant leaders exist to serve their followers as they work to advance their organizations towards shared visions. In short, a servant leader has the natural feeling to serve to lead others, in contrast to wanting to lead based on authority and power.

However, in a period of escalating global competitiveness, characterized in part by a race to the bottom when it comes to wage rates and working conditions, some would argue that being a nice boss and being inclusive by practicing a servant leadership philosophy is a recipe for disaster, where the take-no-prisoners approach by hungry emerging economies is the new reality.

Welcome guys like cut-throat Oracle founder and CEO Larry Ellis and retired General Electric CEO Jack Welch. Did I say “welcome?” Well, let’s take a look at a selection of CEOs who could be deemed mean jerks versus servant leadership corporate managers, and what their results were for the companies they lead.

First up, Larry Ellis (pictured below). Never one for mincing his words or chewing out a subordinate, Ellis attracted attention by lambasting Hewlett-Packard (a company with which he had previous good relations) when it fired high-performer CEO Mark Hurd in December 2011 for what turned out to be false claims of sexual harassment. Ellis, who seemed to take exquisite glee in criticizing HP’s management, subsequently hired Hurd (the subsequent legal issues were apparently been worked out).

In her 2003 unauthorized biography of Larry Ellis “Everyone Else Must Fail,” Karen Southwick (who died from cancer in 2004) stated that he was a “…modern-day Genghis Khan” because of his ruthless business approach, which includes his intolerance for anyone who gets in his way.”

Larry Ellis
This is the CEO who is said to show up for meetings when he feels like it, discards senior rising stars and exudes narcissism like no rival. Yet Ellis is ranked as the fourth richest person in the United States with a net worth of around $59 billion.

However, the 74 year-old Ellis produces results, despite his alleged poor listening skills, top-down management style and lack of empathy. For one thing, he’s known for hiring very talented people who deliver. Oracle’s annual revenues in 2018 (end of May fiscal year) were $40 billion US. The company has a long list of acquisitions of diverse technology companies.

Would Oracle be better off financially if Ellis had been practicing servant leadership?

A second tough-ass CEO was “Neutron” Jack Welch (pictured below), head of General Electric between 1981 and 2001. Now 82, Welch has been viewed as the catalyst who relentlessly drove GE to streamline its operations by shutting down factories, running lean inventories, de-layering management, and laying off employees. His focus for GE was being number one or two in any market in which it competed. Non-performing managers didn’t last long under Welch. Indeed, he conducted an annual firing of the bottom 10% of underperforming managers.

And it worked – depending on to whom you speak. Welch was a hero to many in the corporate world, yet he still has many detractors who argue that the lifeblood of any organization is its employees, managers and staff. Nuking managers on an annual basis is not the way to lead an organization, according to Welch’s opponents.

Since retiring from GE, Welch has done a number of media interviews, from which he has had to backpedal a few times. For example, in a March 12, 2009 interview with The Financial Times he stated: “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy…your main constituencies are your employees, your customers and your products.”

That comment got a reaction from other CEOs: would Welch have made the same comment when he was in charge of GE? The topic of shareholder value and who are the primary constituents of a corporation continues to be battled out in the business literature.

Jack WelchOne can argue endlessly whether Larry Ellis, Jack Welch and others have taken the correct route in leading their respective companies. In fact, some might say that the role of a corporate CEO is not to engage employees in a collective singing of Kumbaya, but rather to demolish the competition and ensure that the company remains at the forefront. You’re either on the bus or under it, as the popular expression goes.

In fact, let’s look at the issue from an even more global level: China. This country’s dramatically impressive growth rates and steady climb up the value chain in manufacturing has been based on results-based management with little margin for error. The on-the-bus analogy is very apt here.

Many leadership practitioners don’t validate the process of brow-beating subordinate managers and staff, preferring the approach of aligning and enrolling people to work towards a shared vision and common purpose. However, others would accuse them of being softies. The financial results of GE under Welch and Oracle under Ellis are indeed impressive.

As a contrast to the CEO as emperor, let’s look at some other company leaders who have lead successful enterprises using very different people-oriented approaches.
Max Depree (Pictured below), retired CEO and respected leadership author provides a compelling case for a servant-oriented approach to leadership. DePree, who’s written such concise books as Leadership is an Art and Leadership Jazz bases his writings on his real life experiences in running a highly successful company.

His father, D. J. DePree, founded office furniture manufacturer Herman Miller in 1923, purchasing the Michigan Star Company with his father-in-law Herman Miller. Max and his brother, Hugh, began to co-manage in the early 1960s. In the mid 1980s Max took over as CEO, holding that position until 1990. He subsequently launched a career as a highly successful author on leadership. The Max DePree Center for Leadership continues to promote his beliefs and practices.

Max DePree.jpgFrom the mid 1970s to the mid 1980s, Herman Miller was rated as 7th globally in return on investment. However, of particular significance was Max’s emphasis on integrating his beliefs into the company’s culture. The Scanlon Plan, a program that encouraged and rewarded employee participation, was one major outcome.

Herman Miller continues its focus on employee engagement, product quality and customer service through its commitment to operational excellence, which encompasses production systems, employee ownership, innovation and economic value-added. Herman Miller has been ranked as one of Fortune magazine’s most admired companies for the past consecutive 18 years.

Let’s look at a second CEO who has been part of an amazing story in the competitive and volatile airline industry. Southwest Airlines began operations in March 1967, serving just three cities in Texas. During its four year history, the airline has grown to be the world’s largest low-cost carrier, earning repeated accolades along the way for its focus on customer service and its humane treatment of its employees.

The current CEO is Gary C. Kelly, who took on the new role on July 15, 2008. However, Kelly began his career with Southwest in 1986 as comptroller, subsequently working his way up to CEO. It’s not a usual part of a CEO’s job description to dress up in a silly costume for Halloween, but Kelly has a way to inspire fun in the workplace. This is the CEO who makes a point of sitting beside customers and employees on flights to listen to their concerns and flying experiences.

Southwest Airlines has faced the same challenges as other airlines over the years. However, Kelly has resisted layoffs and instead engaged employees on ways to address challenges. Here are a few metrics that underscore the success of Southwest Airlines. First, it had achieved 45 consecutive years of profitability in 2017, ranked #1 in customer satisfaction in 2016 by the U.S. Department of Transportation, and $543 million in employee profit-sharing in 2017. Kelly, himself, has been the recipient of numerous leadership awards, including leading one of America’s top workplaces.

To reach this level of success in what has been described as a dysfunctional industry is extraordinary. It was not done easily, yet Southwest’s formula for success is not a trade secret; it’s about treating employees as human beings and keeping them engaged and aligned towards the corporation’s core purpose.

SouthwestSouthwest Airlines has gained noteworthy attention over the years by the humour its flight crews use as a way to lighten the tension the flying public often has and to make the experience more human (see photo). Here are but just two examples that illustrate this humour. It’s useful to note that some other airlines, including Canadian ones, have tried to replicate this humour, but not as successfully as Southwest. Why? Because employees have to be happy in their work to be funny.

From a Southwest flight attendant who intervened when passengers were taking too long to get seated: “People, people we’re not picking out furniture here, find a seat and get in it!”

During a pre-takeoff safety explanation on the intercom from a flight attendant: “There may be 50 ways to leave your lover, but there are only four ways out of this airplane.”
So what’s the verdict, folks? There are success stories on both sides of the CEO-as-tough-ass versus servant leader issue.

For companies like Southwest Airlines and Herman Miller, they have stood the test of time and continue to remain profitable. It will be interesting to watch how Oracle proceeds into a rapidly changing world of technology. General Electric already has had its ups and downs and faces some big challenges. The recent departure of long-serving CEO Jeffrey Immelt for John Flanery caused some initial positive speculation about the company’s share price and future growth, but that has subsided.

In the end it’s our personal decision where we wish to work. Yes, even in a tough labour market there are times when some soul-searching is needed.

From your own perspective and experiences, where would you prefer to work when it comes to how executive leadership is practiced?

Take a moment and share a comment.

The workplace is an incubator for the human spirit. 
(The late Anita Roddick, Founder of the Body Shop)

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