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Why decisive leadership matters

Leadership is crucial to success. And good leaders can fix a confused culture quickly

Rich Karlgaard
Published: Jan 9, 2015 07:49:48 AM IST
Updated: Jan 7, 2015 05:53:46 PM IST
Why decisive leadership matters

Steve Jobs was a jerk. No one disputes these facts: He cheated his friend and Apple co-founder Steve Wozniak over a fee from Atari; he denied father- ing his daughter Lisa for years and implied that her mother was loose; he parked his Mercedes in the handi- capped slot at Apple; he tried to “fix” the Silicon Valley labour market.

But he was our Steve Jobs, and we embraced him. We still do. His creations outweighed his flaws. His products were magnificent, and so is Apple, three years after his death. As a leader and a human being, Jobs found his way onto a good path. He was mourned by millions and, more importantly, by friends and family.

One of Steve Jobs’s legacies is the revival of an eternal question: Is being a jerk a feature or a flaw of being an entrepreneur, CEO and/or leader? Uber’s founder and CEO Travis Kalanick gets more press for being a jerk than he does for being a brilliant CEO. Silicon Valley mogul Peter Thiel calls Uber “ethically challenged”. But Uber customers in New York can now find a ride in the rain. Uber investors are thrilled, too. Uber recently completed a round of financing, which now puts its value at $40 billion. Its distant rival, Lyft, is valued at $700 million. Is it solace or sour grapes that no one calls Lyft ethically challenged?

Be your true self—and be consistent
To be or not to be a jerk: That is the question. Earlier this year, I sat in on a conversation between Jim Davis, the chief marketing officer at analytics company SAS, and a Silicon Valley startup CEO who had once worked for Jeff Bezos at Amazon. SAS, a private corporation, is regularly listed as one of the world’s best places to work. Employees enjoy its beautiful corporate campus, on-site child care, fabulous food, doctors on staff, salons, etc. Not surprisingly, its turnover is 3.6 percent per year. SAS CEO Jim Goodnight is brilliantly quirky and gleefully politically incorrect. But no one calls him a jerk.

Amazon, the ex-Amazon staffer said, is the opposite. It “works the crap” out of its people and suffers double-digit turnover per year. Bezos is a tough drill sergeant or a ferocious micromanager, depending on whom you talk to. No one calls him “fatherly,” as they call Goodnight. Yet, Amazon is a global success.

How is it possible that both SAS, with its nourishing culture, and Amazon, with its merciless one, are successful?

The answer is that both SAS and Amazon are clear about their cultures. SAS’s message is: We’re a family; spend a career with us. Amazon’s is: We’re the Marines; challenge yourself with us.

Lousy companies, however, don’t know what they are. They say one thing and do another. They blow around like the wind, destroying the authenticity and trust of their employees.

It comes down to leadership. Confused leaders can muddy up their culture and wreck things in a hurry. But good leaders can fix a confused culture quickly.

Dell did both. Michael Dell made a mistake common to successful tech entrepreneurs who find, after a run of great success, that their growth is flattening and their stock price is falling. Dell was slow to see that its turbocharged, get-rich-from-your-stock-options culture wouldn’t work once the stock price flattened or, worse, fell. During the 1990s, Dell was the fastest-growing stock in the US and its share price went up a thousandfold.

After the dot-com crash of 2000–01, Dell’s stock never rebounded to its all-time high. When Apple’s market value raced past Dell’s in 2006, Dell was seen as a loser. The effect on Dell employees (and on Michael) was devastating. Leadership at Dell was confused, neither consistent nor decisive.

Finally, in late 2013, Dell decided to do a leveraged buyout and took itself private. The day Dell did that, Michael did something brilliant. He dumped the toxic employee forced-ranking system within Dell. The system ranked every employee into one of five slots along a bell curve. This turned good employees into politicians, bad employees into backstabbers and colleagues into enemies. It hurt collaboration, which a larger Dell really needs.

By dumping this system, Michael has brought decisive leadership—and growth— back to his company.

Rich Karlgaard is the publisher at Forbes

(This story appears in the 23 January, 2015 issue of Forbes India. To visit our Archives, click here.)

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  • M G Warrier

    I agree with most of the views here. But, when I read again, start wondering whether the article is about entrepreneurial success or leadership! Leadership qualities help you to lead a team to success. Leave for the time being the individuals who appropriated team\'s success, or rather the monetary benefits of success to themselves. History, which is full of examples of sacrifices and self-denial by successful leaders, will show them their right place. We need Steve Jobes as much as we need Mahatma Gandhis or Martin Luther Kings.

    on Feb 5, 2015