Running a company at maximum productivity and minimum cost is the holy grail of management – not least during an economic downturn. And in recent decades, there have been some clear articles of faith on how to get there.
In most cases, for instance, firms now seek to motivate their employees in ways that are non-coercive. The carrot has generally prevailed over the stick.
This is typically held to be the legacy of Robert Greenleaf, the former AT&T executive who codified the idea of ‘servant leadership’ back in 1970. Inspired by Hermann Hesse’s 1932 novel Journey to the East, in which a messiah-like figure acts as a servant and benevolent guide to a group of travellers, Greenleaf established the idea that modern CEOs should share their power, put the needs of their employees first, and help them perform better by supporting their personal growth and wellbeing.
Lessons from the front line
But as it happens, servant leaders predate Greenleaf, and they exist in some surprising places too. “The motto at Sandhurst is ‘Serve to lead’,” says Stuart Tootal, co-founder and partner at Matero Consulting and a former colonel in the British Army. “It’s something they’ve been teaching their leaders since 1947.”
The aim is to empower people to work creatively, and with autonomy
After all, an exclusively top-down management style might not necessarily be wise on the front line. “On a battlefield, junior officers are actually empowered to step up and change the plan to meet the overall strategic intent,” explains Tootal. “They have to be able to answer back and say: ‘Do you really mean this, colonel? What about achieving your intent this way?’”
The same applies in business, Tootal argues. “Business is like warfare, there’s nothing new in that,” he says. “The aim – and this is often missed in business – is to empower people to work creatively, and with autonomy, to meet the overall objectives of a mission.”
Why C-suite ‘kings’ get things done
Nevertheless, there are still many CEOs who admire an older, more authoritative style of management – the command-and-control model. For example, Jeremy Bullmore, the late management guru and advertiser who launched the Mr Kipling and After Eight brands, argued that in hard times leaders sometimes need to “rule like monarchs” in order to get things done. He may not have been advocating permanent command and control, but clear, top-down direction, he reasoned, can sometimes project “an easy idea” around which employees can cohere.
But that easy idea can often end up becoming command and control, particularly when firms are struggling. A recent example is how Elon Musk has managed Twitter since taking over at the end of last year. Musk has since laid off around 80% of staff, and social media has been buzzing with lurid tales of his peremptory orders. The New York Times reports that engineers have not been allowed to change the site’s code over the past few months because management are worried about sabotage by departing staff.
It certainly doesn’t sound ideal, but might Musk’s top-down approach have its virtues? “Most people in most businesses like to have a grumble about management. But when it comes down to it, the vast majority just want to get on with their day job and not be involved in running things,” says Robert Pickering, an experienced non-executive director and the former CEO of JPMorgan Cazenove.
“People say they want to have a voice and some discretion in how they go about their job, but that can often be performative,” he adds. “That even goes for partners in a large firm; they might vote on strategy but in practice, as individuals, they have minimal say.”
How to strike the right balance
For Tootal, though, that kind of thinking entails a risk. “Firms greatly reduce the chance of getting things wrong if they empower people to act with freedom within the bounds of strategic intent and speak up when they see a problem or need senior leadership support,” he says.
Equally, a lack of autonomy among the lower ranks can cause problems for the C-suite. “If those at the top are being distracted by people delegating everything upwards, they won’t be able to focus on the fundamental strategic decisions,” Tootal adds.
Perhaps there’s a balance to be struck here. “If you ask most business leaders what the most important characteristic of a CEO is, they would say ‘you have to be a good listener’,” Pickering continues. “But you don’t get to be a CEO by being humble. I’m sceptical that the most important quality is empathy. The basic job is to take three or four big decisions each year and, ideally, get them right. But that said, good decisions do come from surrounding yourself with good people and talking openly.”
Why you need to keep your network happy
And there’s another fly in the command-and-control ointment too. “Most businesses are not a zero-sum game like, say, trading in an investment bank, where it’s like going into mortal combat every day,” says Olivier Beroud, programme director at the Future Leaders Group, which offers training for future C-Suite execs. “Instead, you have ongoing relationships to develop and maintain with many networks, both internal and external.”
Beroud points out that command and control implies a power game where authority always wins. “But long-term success is based on collaboration,” he says. An effective leader, he argues, needs to understand each person’s unique contribution to the common goal and know how team members complement each other.
Indeed, it’s when a company comes under fire, Beroud says, that “the leader has to use the combined strengths of the team to get the results the firm needs. If they can do that, the leader and the team will come out of the crisis stronger.”
Running a company at maximum productivity and minimum cost is the holy grail of management – not least during an economic downturn. And in recent decades, there have been some clear articles of faith on how to get there.
In most cases, for instance, firms now seek to motivate their employees in ways that are non-coercive. The carrot has generally prevailed over the stick.
This is typically held to be the legacy of Robert Greenleaf, the former AT&T executive who codified the idea of ‘servant leadership’ back in 1970. Inspired by Hermann Hesse’s 1932 novel Journey to the East, in which a messiah-like figure acts as a servant and benevolent guide to a group of travellers, Greenleaf established the idea that modern CEOs should share their power, put the needs of their employees first, and help them perform better by supporting their personal growth and wellbeing.
