Examples of Tremendous Business Leadership
– reward your staff during tough times: During 9/11 SouthWest announced a $179.8 million profit sharing payment to employees.
– Be human, approachable, genuine and transparent: Toyota’s CEO Jim Lentz appeared on a Digg Dialogg (an often hositle forum to corporate companies). The questions were asked in order of votes made by digg members, and none were filtered.
– Be humble and challenge the “nasty” stuff about your industry even if it means retaliation by the established players. Consumers will appreciate the honesty and reward you
– Don’t pay yourself excessive salary. Jim Sinegal CEO of Costco figured he shouldn’t be paid more than 12 people working on the floor. See also my colleague Graeme’s post A Radical Proposal for Executive Pay
– Trust your staff – At a time when the idea of “business blogging” was brand new (and usually feared), IBM encouraged their 320,000 employees to start company blogs. IBM leadership drafted a corporate blogging policy that encouraged employees to be themselves, speak in first person, and respect their coworkers.
– Perhaps the simplest but most powerful… always listen first, and speak last.
You can also read at Open Forum
Feb 24, 2010 –
Great leadership can be hard to come by. With all the politics and blaming that can go on within an organization, many companies are lacking good, solid leadership from people who are willing to stick to their word.
That’s why it’s always refreshing to see examples of great leadership in our society. Here are 10 examples of top-notch leadership from leaders who ultimately led by example, letting their actions (and bottom lines) speak for themselves.
1. How Southwest Handled 9/11
Southwest is known for their customer service. In an industry fraught with awful customer service, Southwest distanced itself from other airlines by putting the customer first, no matter what the situation.
On September 11, 2001, airlines were forced to shut down for days while the rest of the nation recovered from the terrorist attacks. This meant that all airline passengers, flight attendants and pilots were stranded with the planes across the country. Instead of merely sitting and waiting, Southwest employees were encouraged to take passengers bowling or to the movies to pass the time.
Many airlines started cutting jobs in the months following 9/11. The airline industry had been badly damaged, and many airlines were forced to cut their workforce by up to 20%. Instead of following the trend, Southwest made an announcement only three days after 9/11 that Southwest would be keeping all of their employees and starting a $179.8 million profit sharing payment to employees.
Southwest CEO James Parker believed that because Southwest had built their company on sound business principles for the past 30 years, they were able to handle crisis better than other airlines.
2. Toyota’s Digg Transparency During The Recall
Toyota recently announced that they would have to recall 2.3 million vehicles for faulty brakes. Outrage ran rampant across the media and public. Complaints were filed and lawsuits were made. It appears as if the Toyota brand has been tarnished for many years to come.
Instead of letting a PR team handle the issue with only press statements and interviews, Toyota turned quickly and offered a live conversation on one of the most popular communities on the web: Digg.
The community behind the social news site Digg is generally quite hostile to corporations. So it came as a shock to many that the Toyota CEO Jim Lentz would appear on a Digg Dialogg to be asked all sorts of questions about the company and the recall. Over a thousand hard questions were submitted from consumers and even past employees, and Mr. Lentz answered as many as possible in the given time. The questions were asked in order of votes, and none were filtered. It was a totally transparent interview.
While the fallout of the recent recalls are massive, Toyota’s openness will greatly help with minimizing the damage to the company’s reputation.
3. The Redfin Blog Saved the Company
Glenn Kelman knows a thing or two about being humble. In fact, it’s a method he’s utilized to successfully bring his company into the online real estate industry.
Redfin is an online real estate brokerage firm that gives back two-thirds of the commission that traditional agents charge. Real estate agents hated it, and started blacklisting anyone who used the service.
So, instead of keeping the problem quiet, Kelman started a company blog that focused on many of the awful aspects of the real estate business. He also posted about internal struggles within the company, and even criticized himself on many occasions. The blog was raw and authentic.
Customers loved the transparency. They appreciated the fact that a CEO could make fun of himself and the dirty parts of his industry. Since starting the Redfin blog in 2006, business has grown dramatically. Kelman gave his reasoning to the openness in a Wired article.
“I honestly believe that if Redfin were stripped absolutely bare for all the world to see, naked and humiliated in the sunlight, more people would do business with us.”
And they have.
4. Costco’s CEO is the Normal Guy
Over the past five years Jim Sinegal has shepherded his company Costco to impressive returns. Costco’s stock has doubled, and revenues continue to grow at an impressive rate.
Yet Sinegal might be better known as a man of the people at Costco. His name tag plainly says “Jim,” he answers his own phone, and his plain office at the company headquarters doesn’t even have walls. While other CEO’s are spending tens of thousands of dollars just decorating their offices, Sinegal’s pays himself a yearly salary of $350,00. Most CEOs of large company are paid in the millions. His simple contract is only a page long, and even includes a section that outlines how he can be terminated for not doing his work.
So how did he come up with that number? He figured he shouldn’t be paid more than 12 people working on the floor.
His employee turnover rate is the lowest in the retail industry, over five times less than rival Wal-Mart. In an age where CEOs are paid in the millions and would never be seen in the “trenches,” Jim Sinegal is an anomaly. And his workers love him for it.
5. How Starbucks’ CEO Handled Company Tragedy
Starbucks is known for its exceptional treatment of employees, offering things like insurance to even part-time workers. When tragedy struck the company, it’s no surprise that their CEO was able to comfort a hurting store and community.
In 1997 three employees were killed in a bumbled robbery of one of their Washington D.C. stores. Instead of issuing a press release or calling legal counsel, CEO Howard Schultz flew straight to D.C. and spent the entire week with the employees and their families in the area. Schultz’s compassion and incredible leadership helped heal those closest to the tragedy.
6. IBM Encourages Blogging
At a time when the idea of “business blogging” was brand new (and usually feared), IBM encouraged their 320,000 employees to start company blogs. IBM leadership drafted a corporate blogging policy that encouraged employees to be themselves, speak in first person, and respect their coworkers.
The result? A marketing bonanza for IBM. Their company blogs are some of the most trusted technology blogs and generate tons of pageviews and links back to IBM. Instead of fearing the new technology, IBM embraced it, making their customers and employees very happy.
7. How Nelson Mandela’s Father Made Tribal Decisions
Nelson Mandela is easily the most recognizable name in the Mandela family. Few people know of Mandela’s adoptive father, Chief Jongintaba. Mandela credits Chief Jongintaba as a major source of leadership learning, and Mandela learned how to make important decisions based on how his father interacted with his tribe.
Chief Jongintaba was a tribal king, and would frequently hold meetings of the court. Men from all walks of life would gather in a circle and express their opinion. The Chief waited until every everyone had spoken before he would enter the conversation.
Mandela would later use his father’s technique, gathering leaders at his kitchen table or in his driveway and holding discussions. Mandela would always listen first, and speak last.
8. TDIndustries Avoids Bankruptcy by Trusting Employees
TDIndustries is employee-owned and consistently on Forbes’ Best Companies to Work For list. But the company almost didn’t make it through the late 1980’s without savvy leadership.
Many Texas banks were failing in the late 1980’s, and TDIndustries was hurting greatly by the lack of funds needed to do large construction jobs. The company leadership informed their employees that instead of filing for bankruptcy, they were going to pay out the Defined Retirement Plan to its employees, and asked employees to use that money to reinvest into the company.
Because of the company’s transparency and trust in their employees, the employees responded by giving back 30% more than what the company asked for. The money helped stabilize the company, and they weathered the rough financial spell.
9. Sun’s CEO Fights for Internet Transparency
Jonathan Schwartz recently resigned his post at Sun with a Haiku tweet. While he was at Sun though, he was a major proponent of more transparency from CEOs. Schwartz was one of the first Fortune 500 CEOs to start a blog and opened up large companies to an excellent example of corporate blogging.
One of Schwartz’s biggest moves as CEO was hosting a public debate on openness for companies on the Internet. Schwartz and SEC chairman Christopher Cox had an open debate on their blogs about the Regulation Fair Disclosure not including the Internet (or blogs like Schwartz’s). By fighting for more openness from the SEC, Schwartz gave other customers and companies reason to trust his leadership.
10. Toro Adds Empathy to a Lawsuit Policy
Toro was going through major financial troubles in the late 1980’s, and after a series of firings placed Ken Melrose as the CEO. Melrose was able to cut serious costs on lawsuits against the company by making a slight change: he added empathy.
Toro manufactures commercial lawn and golf course management equipment, and because of the machinery experiences many lawsuits. The company yearly sees around 100 serious injuries on average. Toro started sending a company representative to meet with the injured person and their family to see what went wrong, express the company’s sympathy and try to attend to any needs the injured family might have.
Before they instituted the change, around half of the injuries resulted in a lawsuit. After the change, that number dropped to only a single lawsuit since 1991.