If asked to describe the traits of an effective CEO, most people would probably use adjectives such as driven, competitive, and tough. While it’s clear that some hard-nosed CEOs, like Blackstone chief executive Stephen Schwarzman (see the chapter opener), are successful, recently some authors have suggested that being “nice” is really important in today’s workplace, even in the CEO suite. In a recent book titled The No A–hole Rule: Building a Civilized Workplace and Surviving One That Isn’t, Stanford management professor Robert Sutton argues that getting along well with others is important to the successful functioning of organizations.
Many companies, such as Google, have developed policies to weed out those who habitually behave in an uncivil manner. Lars Dalgaard, CEO of SuccessFactors, a business software company, identifies himself as a recovering Fortune 500 “a–hole. ” Now, Dalgaard has implemented a strict “no a–hole” rule in his company. Job interviews are lengthy and feature probing questions designed to uncover any browbeating tendencies. Last year, Dalgaard took candidates vying for a chief financial officer vacancy to lunch at a local restaurant to see how they treated the wait staff.
Some got a free lunch but nothing more. When managers and employees are hired, they get a welcome letter from Dalgaard that spells out 15 corporate values, the last of which is “I will not be an a–hole. ” Although it’s not clear whether they’ve read Sutton’s book, some CEOs of Fortune 500 companies do seem to project the image of a “kinder, gentler CEO. ” Let’s consider three examples, all of whom were proteges of Jack Welch when he was CEO of General Electric (GE) and of whom were candidates to be his successor: Bob Nardelli, James McNerney, and Jeff Immelt.
Bob Nardelli, former CEO, Home Depot. When Bob Nardelli wasn’t chosen to be CEO of GE, he demanded to know why. Didn’t he have the best numbers? His bitterness was palpable, say GE insiders. When Nardelli became CEO of Home Depot, in his first few months on the job, he became notorious for his imperious manner and explosive temper. At one meeting, he yelled, “You guys don’t know how to run a f—ing business. ” When Nardelli was fired as CEO in 2006, it was due to a combination of factors, including Home Depot’s lackluster stock price, but his abrasive personality played no small part.
BusinessWeek wrote: “With the stock price recently stuck at just over 40, roughly the same as when Nardelli arrived 6 years ago, he could no longer rely on other sterile metrics to assuage the quivering anger his arrogance provoked within every one of his key constituencies: employees, customers, and shareholders. ” James McNerney, CEO, Boeing. – These are heady days at Boeing, which commands record levels of new orders and dominates its European rival Airbus as never before. Most CEOs would take credit for this success.
Not James McNerney, who gives the credit to Boeing’s engineers and employees. “I view myself as a value-added facilitator here more than as someone who’s crashing through the waves on the bridge of a frigate,” he says. A former GE colleague compared Nardelli and McNerney, saying, “Jim’s problems have been as tough, or tougher, than the ones that Bob had to face. But he has tried to solve them in a much more pleasant way. The guy is loved over there at Boeing. ” Jeff Immelt, CEO, General Electric.
– Although Jeff Immelt is the first to point out that the nickname “Neutron Jack” for his predecessor Jack Welch was misleading, and that the differences between him and Welch are not as dramatic as some claim, Immelt is noted for his calm demeanor and trusting approach. In speaking of his approach, he said, “I want to believe the best in terms of what people can do. And if you want to make a growth culture, you’ve got to have a way to nurture people and not make them fight so goddamn hard to get any idea through the door. ”
Do you think Sutton is wrong and that the contrasting fortunes, and personalities, of Nardelli, McNerney, and Immelt are coincidental? Why or why not? Answer: No, Sutton is correct. Interpersonal skills and the ability to develop relationships with people is increasingly more important in today’s economy. The hard line, command and control style of management is no longer as effective as maybe it once was. Nardelli was fired undoubtedly because of the stock price but also because of his abrasive personality. 2. Do you think the importance of being “nice” varies by industry or type of job? How so?
Answer: No, the importance of being nice is based on personality and philosophy. Treating people with respect and trust is universal across industries and jobs. “Nice “ also does not mean that the person is a welcome mat, but rather the person has a belief in the golden rule of treating people appropriately and the results will follow. 3. How comfortable would you be working in a culture like that of SuccessFactors, where a certain level of “niceness” is part of the job description? Answer: This may vary by student, but companies should have core values by which all employees should abide.
Teamwork and building relationships are paramount in successful companies so proper treatment of others should be a given. 4. Do you think being “nice” is the same as the Big Five trait of agreeableness? If so, do you think companies should screen out those who score low on agreeableness? Answer: Agreeableness can be compliant and conforming. Companies also need free and innovative thinkers. This factor in terms of performance is important when applied to lower levels of deviant behavior. Nice may be defined as agreeable but you can be nice and still disagree in a polite and respectful way.
Companies should pay attention to this trait although it should not solely be used as a screening mechanism. 5. Earlier we discussed the fact that entrepreneurs score significantly lower than managers on agreeableness. How would you reconcile this finding with Sutton’s point? Answer: Entrepreneurs are often very driven, creative and innovative. They must be able to think outside of the box in order to succeed. Often those individuals with a different vision or idea will leave an established company to develop and market the product or service.
This fact does not conflict with the thought that these people can be defined as nice as it pertains to management style. Sources: D. Brady, “Being Mean Is So Last Millennium,” BusinessWeek, January 15, 2007, p. 61; G. Colvin, “How One CEO Learned to Fly,” Fortune, October 16, 2006; B. Grow, “Out at Home Depot,” BusinessWeek, January 9, 2007; J. Guynn, “Crusade Against the Jerk at Work,” San Francisco (California) Chronicle, February 24, 2007; and “The Fast Company Interview: Jeff Immelt,” Fast Company, July 2005, p. 60. Case Incident 2 A Diamond Personality.
Ask Oscar Rodriguez about the dot-com burst and he may grin at you as if to say, “What burst? ” Rodriguez, a 38-year old entrepreneur, owns an Internet business that sells loose diamonds to various buyers. Business is booming for Rodriguez. In 2004, he had sales of $2. 06 million—a 140 percent increase from 2003. Rodriguez’s database of almost 60,000 diamonds is one of the largest and is valued, according to Rodriguez, at over $350 million. Needless to say, Oscar Rodriguez is optimistic about his business venture. The future wasn’t always so bright for Rodriguez, however.
In 1985, Rodriguez moved from his native country, Puerto Rico, to Gainesville, Florida, with little ability to speak English. There, he attended community college and worked at the local mall to support himself. After graduation, his roommate’s girlfriend suggested that he work at a local jeweler. “I thought she was crazy. I didn’t know anything about jewelry,” says Rodriguez, who took her advice. Though he worked hard and received his Diamonds and Diamonds Grading certification from the Gemological Institute of America, he wasn’t satisfied with his progress.
“I quickly realized that working there, I was just going to get a salary with a raise here and there. I would never become anything. That drove me to explore other business ventures. I also came to really know diamonds—their pricing and their quality. ” In 1997, tired of working for someone else, Rodriguez decided to open his own jewelry store. However, business didn’t boom. “Some of my customers were telling me they could find diamonds for less on the Internet. It blew my mind. ” Rodriguez recognized an opportunity and began contacting well-known diamond dealers to see if they would be interested in selling their gems online.
Rodriguez recalls one conversation with a prominent dealer who told him, “You can not sell diamonds on the Internet. You will not survive. ” Discouraged, Rodriguez then says that he made a mistake. “I stopped working on it. If you have a dream, you have to keep working harder at it. ” A year later, Rodriguez did work harder at his dream and found a dealer who agreed to provide him with some diamonds. Says Rodriguez, “Once I had one, I could approach others. Business started to build. The first three months I sold $200,000 worth of diamonds right off the bat. And that was just me.
I started to add employees and eventually closed the jewelry store and got out of retail. ” Although Rodriquez does have some diamonds in inventory, he primarily acts as a connection point between buyers and suppliers, giving his customers an extraordinary selection from which to choose. Rodriguez is now a savvy entrepreneur, and his company, Abazias. com, went public in October 2003. Why is Rodriguez successful? Just ask two people who have known Rodriquez over the years. Gary Schneider, a realtor who helped build Rodriguez’s building, says, “Oscar is a very ambitious young man.
I am not surprised at all how successful he is. He is an entrepreneur in the truest sense of the word. ” One of Rodriguez’s former real-estate instructors, Howard Freeman, concurs. “I am not surprised at all at his success,” says Freeman. “Oscar has always been an extremely motivated individual with a lot of resources. He has a wonderful personality and pays close attention to detail. He also has an ability to stick to things. You could tell from the beginning that he was going to persevere, and I am proud of him.
” Rodriguez is keeping his success in perspective, but he also realizes his business’ potential: “I take a very small salary, and our overhead is $250,000 a year. I am not in debt, and the business is breaking even. I care about the company. I want to keep everything even until we take off, and then it may be another ball game. ” Questions 1. What factors do you think attributed to Rodriguez’s success? Was he merely “in the right place at the right time,” or are there characteristics about him that contribute to his success?
Answer: His personality seems to have played a role in his relentless pursuit. In spite of adversity, he pursued his dream. The environment was not favorable initially, and he had to overcome significant obstacles. 2. How do you believe Rodriguez would score on the Big Five dimensions of personality (extraversion, agreeableness, conscientiousness, emotional stability, openness to experience)? Which ones would he score high on? Which ones might he score low on? Answer: He would score high on extraversion, emotional stability and openness to experience.
It appears that he would score relatively high across all five factors. 3. Do you believe that Rodriguez is high or low on core self-evaluations? On what information did you base your decision? Answer: He is high on core self-evaluation. Have students suggest reasons why this may be. 4. What information about Rodriguez suggests that he has a proactive personality? Answer: This is a good opportunity for a class based discussion on culture factors as well as overcoming environmental obstacles. Source: Based on M. Blombert, “Cultivating a Career,” The Gainesville Sun, May 9, 2005, p. D. 1.