Did the word ‘Authoritarian’ shock you? Well, political correctness aside, there is at least one unique quality of the madman Hitler that is followed by leaders of some of the most successful corporations across the globe – an authoritarian leadership style – a quality that has been a significant reason in ensuring that such corporations are viewed as being amongst the leading business units of this world! This is because while leadership styles which are more democratic are wonderful to read and be applied, such styles can be successful only when the people you are leading are most mature, responsible and ambitious. And despite what one may wish or imagine, finding such people to work with is near impossible!
If you believe that I have tumbled over the edge and am referring back to the days of Theory X management – which used to be ruthlessly applied in the early stages of industrialization when coal mining used to be the key industry – well, it almost is so. The only difference is that technology has made today’s autocratic leadership look very savvy! The best of corporations today have the same lack of trust in their employees’ sincerity levels as they used to have years back in the coal mines. But today, they never really exhibit it vocally. Instead, we have automated processes which leave no option for an employee to work as per his personal preferences.
Whether he likes it or not, phone calls are thrown at him by the automatic software, his restroom breaks are timed, his precise location during office hours is tracked through GPS, and more. Be it manufacturing or services, employees are not given a choice in any great organisation anymore. For the leaders have realized that given a choice, most employees are under productive. So technology is today used to force them to deliver. Autocratic leadership is done unhindered through the use of more and more ruthless technologies. And the most successful leaders use this style of leadership without guilt and to achieve the best of results with the majority of people (but intelligently spare the few mature colleagues they might have who work with passion and without the need for being ordered).
Late Steve Jobs, former CEO of Apple (still the face of Apple), was the exemplar of this style of leadership. Once out of Apple after a power struggle with the-then top management (the top brass considered him a “control freak”), he struck back, and is today the strongest example of how an insistence on total control over your company and employees (call it totalitarian leadership if you like) and a focus on innovation can keep the clock ticking, with the sound getting sweeter by the second. There was a time when during late 1997, only a year after Jobs had taken over as Apple’s Interim-CEO (he had returned to Apple in late 1996), someone had asked Michael Dell during a conference what he would have done had he been in Jobs’ shoes. Dell’s reply to this was, “I’d shut Apple down and give the money back to the shareholders.” Then, Apple was just worth $3.1 billion, while Dell was worth $28.1 billion. 14 years later, Dell has been almost stagnant with an m-cap of $28.9 billion (as on April 26, 2012), while Apple’s m-cap has grown by 18,248.39% to touch $568.8 billion (as on April 26, 2012) and it is today the most valuable company in the world! [The next most valuable is miles behind – Exxon Mobil with an m-cap of $409.34 billion.]
What Jobs did was to use a tyrannical leadership style – fire and force at will – to ensure that his employees delivered products that consumers lusted after, in an ever-evolving digital world. It has worked so far. Writes the American author Andrew Keen’s in his best-seller titled, The Cult of the Amateur, “There’s not an ounce of democracy at Apple. That’s what makes it a paragon of such traditional corporate values as top-down leadership, sharply hierarchical organisation and centralised control. It’s Steve’s company – pursuing his vision, at his pace, with his team, making his products. Without Steve Jobs’ authoritarian leadership, Apple would be just another Silicon Valley outfit...” In one of his conversations with one of Planman Media’s publications, Discover The Diamond In You, Colorado-based technology expert Rick Sturm, CEO of Enterprise Management Associates, says, “Steve Jobs is a special example of a leader who dominated his company employees and guided them rightly with his authoritarian leadership style and unmatchable vision. He believed that one man with one vision can make Apple an iconic brand and company. And we see that his belief has actually materialised.”
Apart from Jobs, there have been other legends too. After the recession, Ford Motors managed to become the first US auto giant to bounce back into the black sans a revival package, having made $2.72 billion in net profits during FY 2009 – the very year GM & Chrysler filed for Chapter 11! And the reason for this revival is the recruiting in 2006 of the most authoritarian CEO that Ford had ever seen after Henry Ford – Alan Mulally. Under Mulally’s reign of five-and-a-half years, Ford’s m-cap has increased by 213.06% to $44.58 billion (as on April 26, 2012) enough reasons for shareholders to love this 66 year-old imperious authoritative boss. Even today, ExxonMobil’s dictatorial CEO Rex Tillerson runs the oil major in the same way it has been run for years by the likes of John D. Rockfeller and Lee Raymond – with preeminent and absolutist control over decision-making. Under him, despite fluctuating oil prices, during just the past 4 years (FY 2007 to FY 2010), Exxon has reported total net profits of $142.61 billion. Today, Exxon is the second most valuable company in the world (after Apple) – with an m-cap of $409.34 billion (as on April 26, 2012).
Research does support the case for authoritarian leadership, even during crisis times. A 2006 Harvard Business School case, titled, ‘Harley’s Leadership U-Turn’, proves how under Rich Teerlink (ex-CEO of Harley-Davidson), the organisation took a U-turn from near extinction. It says, “When an organisation is under extreme pressure – so much so, that one wrong move can mean its collapse – authoritarian leadership may very well be necessary.” In another paper titled, ‘Is Servant Leadership Part of Your Worldview?’, by Dr. J. Howard Baker of University of Louisiana, he states, “An authoritarian, command and control model of leadership may be very effective for stopping something, destroying something, or conquering something...” He goes on to praise Jack Welch, the authoritarian former Chairman & CEO of GE, one of the most successful CEOs of all times, under whose 13 year-long tenure, GE’s market value appreciated by 2,828.5% to touch $410 billion. [This is something which Jeff Immelt, his democratic-participative leadership styled-successor has failed at; GE is valued at $205.80 billion today – down by about 50% in a matter of six years.].
My selection of autocratic CEOs mentioned here, like other leading CEOs, have two more corresponding qualities that are unmissable – an audacious vision objective and an unbelievable narcissistic need for complete control. Why all this despotism works is because experience has shown these iconic CEOs that humans, in general and most of them, will cheat and shirk work at the first possible chance. Of course, there will be exceptions of mature and passion driven employees – like you, obviously – who would not shirk work and who would not need to be threatened, to be productive. But these will remain exceptions. Once you truly start believing that the only way an organisation can be ruthlessly productive and profitable is to be as ruthless to its people, that’s the moment you’ve qualified as one of the world’s best leaders.
Take a look at the deplorable condition of Indian PSUs, and you’ll understand why the need for “one man on top” is felt as all the more urgent today. According to the report tabled in the Parliament in March this year, loss-making PSUs in our country bled 34% more year-on-year in FY2011. The loss to the government was a mammoth Rs.21,693 crore (shamefully, equivalent to 41.7% of the allocation for the education sector, and 81.1% of the allocation for the health sector in Union Budget 2010-11). After years of allowing “democratic” IAS officers to run loss-making PSUs in the country, why don’t we have authoritarian leaders in charge of each of these firms or at least one authoritarian leader in charge of the loss-making PSUs to ensure that government-run corporations like Air India (NACIL), MTNL, BSNL, Fertiliser Corporation of India, Hindustan Cables and many others turn a new leaf? Really, the Indian policymakers and leaders of Indian PSUs need to pick up a lesson or two from the playbook of successful “authoritarian” leaders in the world of business. Yes, I do wish every organisation at its top does have mature people with whom the CEO doesn’t need to apply an authoritarian style. But real life experiences of successful leaders show quite to the contrary!
- 26 April 2012 |
- Arindam On America