Alert, we may be returning to an era where their CEOs no longer consider employee inputs. So, everyone must prepare for the beginning of a return to a “my way or the highway” CEO leadership style.
This is a think piece – its purpose is to make you examine a developing shift in CEO leadership style.
Yes, based on the recent seemingly harsh decisions by several prominent CEOs. You must realize that we may be witnessing the early stages of a quantum shift in our approach to corporate leadership. That shift is away from the currently dominant “inclusive approach” to decision-making. When executives give deliberate consideration to employee preferences and opinions before making a decision, the shift will be back toward the management practices of a bygone era. Every employee will have to meet their CEO’s precise expectations. Or they will be unceremoniously reminded that “it’s my way or the highway,” and then they will show them the door. Here are three recent examples of, what I call, a “cold-blooded leadership” approach:
- Example #1 – “Everyone is required to spend a minimum of 40 hours in the office per week.” “If you don’t show up, we will assume you have resigned.” Elon Musk, CEO, said in his message abruptly ending remote work that he sent to all Tesla and SpaceX employees. This mandated edict was sent when most corporations are still seeking employee input into their final remote work model. Elon Musk requires this 100% return to the office because data reveals that having everyone working alongside in the office environment maximizes collaboration and innovation.
- Example #2 – “Quit and find a company to work at that you believe in!” – said Brian Armstrong, Coinbase’s CEO, in his recent message to all employees. This last harsh expectation for employees to move on if they don’t like the company’s direction comes only 18 months after responding to a publicized employee petition. He first told all employees that he wouldn’t “stand for politics and championing social issues at the office.” And as a result of his edict, the company paid a healthy severance to 60 employees who weren’t comfortable with his new policy of “political neutrality” in the workplace. Employees also publicly objected to the company’s “dot collector” software requirement use which provides employees with instant candid feedback. Employees felt it was instituted without a sufficient amount of employee input.
- Example #3 – “We would fully expect that… all U.S.-based employees will be in the office on a consistent rotational schedule“. Jamie Dimon, CEO of J.P. Morgan, said in his memo requiring all employees to return to the office. Despite employee concerns, with what many would consider an arbitrary decision. He noted, “With remote work, there is an absence of “spontaneous learning and creativity” because you don’t run into people at the coffee machine, talk with clients in unplanned scenarios or travel to meet with customers and employees for feedback on your products and services.” He later changed his mind and partially withdrew the 100% come to the office requirement.
Similar top-down edicts that covered all employees have also been recently issued by the CEOs of Kaiser Permanente (requiring vaccines) and Apple (requiring a return to the office). Employees have vigorously objected to both.
Understanding The Factors That Are Causing A Shift Toward Cold-Blooded Leadership
For the last two decades, the wild success of high-tech Silicon Valley firms like Apple, Google, and Facebook has influenced many other CEOs to follow their lead. In systematically soliciting and considering employee sentiment, opinions, and preferences (click here for more details on employee sentiment). And that consideration of employee sentiment has resulted in a dramatic increase in electronic engagement surveys, happiness surveys, anonymous internal complaint websites, and stay interviews. However, at least in remote work areas, the desire is for more unionization and mandated covid vaccines and masks. It is beginning to appear that (despite the recent diversity push for inclusion) employee input on major decisions is now receiving a reduced level of leadership consideration. Six major factors are driving this shift towards cold-blooded leadership. They include:
- A VUCA world requires fast decision-making – “It’s not the big that eat the small. It’s the fast that eat the slow!” (Jason Jennings). So after senior leadership realizes that they are operating in a highly turbulent VUCA environment, where literally every business factor changes dramatically with little advanced notice. Most CEOs will soon realize that these dramatic changes now require a fast, decisive response. And because speed is so essential, there may be little time for consultation with employees.
- Consultation makes it difficult to keep business decisions secret – in our highly competitive environment. Corporations must keep even the proposal of any new approach secret. However, that essential secrecy is almost impossible with any consultation involving a large number of employees. So, unfortunately, continuing with significant employee consultation will dramatically increase the probability that the organization’s competitors will discover the options that its leaders are considering.
- Wunderkind unicorn CEOs are often given more leeway – some CEOs are judged to be “brilliant” because of their string of consecutive successes in business. And because of that mystique, they can often get away with harsh edicts. For example, Elon Musk, who is often assumed to be smarter than his own employees, his recent “work 40 hours in the office” edict went largely publicly unchallenged by his employees.
- Employee consultation on some talent issues can cause serious workforce problems – all smart executives are now, at the very least, planning for an upcoming recession. As part of that process, they must consider significant layoffs, pay, promotion, or hiring freezes. Even rumors of a change in these competitive talent issues among employees can have many negative impacts, including problems with business results, employee productivity, recruiting, and employee retention. It is extremely difficult to consult with employees in any of these sensitive talent areas.
- CEOs are experiencing added shareholder pressure – the recent significant drops in stock valuations are causing shareholder concerns. There is added pressure on most CEOs for immediate performance improvement. As a result, listening to shareholders may become more important than consulting with employees on major decisions.
- Employees want decision-making on social issues to be part of inclusion – historically, consultation with nonunion employees focused strictly on work-related issues. However, many current workers have grown to expect that employees will also be included in decisions related to broader social issues. Including climate change, corporate social responsibility, “Me too,” and “Black lives matter.” However, given the tough current economic conditions that many are facing. Some CEOs will be forced to follow the lead of Brian Armstrong at Coinbase and issue an edict not to discuss or spend time and resources on social issues that don’t directly impact the company’s bottom line.
Realize That The Cold-Blooded Leadership Style Isn’t New
For centuries most CEOs have ruled their corporations with an iron hand. At the beginning of the last century, Henry Ford became famous for emphasizing his “I know best” leadership approach. And among the most famous recent examples are Jack Welsh and Donald Trump. Jack Welsh’s employees called him “Neutron Jack” because of his willingness to lay off thousands of workers in mass without employee consultation. Also, to harshly drop the bottom 10% of his employees (who were underperforming) each year. And, of course, everyone knows about Donald Trump’s unyielding top-down management style as the CEO of his family’s real estate business.
Action Steps To Consider
While many in management and executive positions will welcome any reduction in employee consultation on decisions, most employees will likely resist any purposeful reduction in their inclusion in decision-making. So, if you want to minimize any damage from having less consultation, here are five action steps that you can take to help reduce the turmoil caused by less inclusive decision-making.
- Alert your executives about how consultation practices are shifting – ensure that your executives are fully aware that the leadership environment is beginning to change. The CEOs of some of your competitor firms are already dramatically reducing their level of consultation with their employees. And fully explain to your executives why certain business and environmental factors are forcing many executives to make these changes in employee consultation.
- Warn your employees to expect changes in consultation – it’s essential that you fully inform all employees (and any unions) about any upcoming changes in your company’s consultation practices. And, of course, fully explain why these changes must be made.
- Prioritize issues and consult only on the critical ones – if the decision is to maintain some employee consultation. Let your employees know that for the foreseeable future. You will only be able to consult with employees only on the highest priority issues.
- Speed up your consultation process – when employee consultation is possible. Speeded it up by including fewer employees and minimizing the steps in the consultation process.
- Provide an internal feedback mechanism for employees – even when they are not initially consulted. It still makes sense to gather employee feedback when the decision is announced and implemented. In some cases, the feedback mechanism should be semi-anonymous so that the team (not the individual employee) can identify where the message originated. So that management can target their response to any issues down to the team level.
For nearly two decades, major corporations have been moving away from the “command-and-control” executive leadership style and instead moved to increase employee inclusion in major decision-making. However, like most leadership cycles over time, it may now be appropriate to consider beginning a pivot toward another direction, even though this shift in style may lead to some difficulties in employee productivity, retention, recruiting, and maintaining a union-free environment. The benefits of faster decisions that are kept secret much longer will help offset the negatives of executive edicts.
|If you can only do one thing – when CEOs decide to reduce employee inclusion in their major decisions significantly. Before making that shift, you must fully educate your employees early on as to why this shift is necessary. And on how it might benefit the individual employee.|
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Dr. John Sullivan 6/13/22 for the DJS Aggressive Recruiting Newsletter